proposed roadmap for the paper industry in philippines

ROADMAP FOR THE PAPER INDUSTRY IN
PHILIPPINES (2014-2020)
_________________________________________
Ray N. Geganto
Exec. Director
Philippine Paper Manufacturers Association Inc. (PPMAI)
formerly Pulp &Paper Manufacturers Assoc. of the Phils. (PULPAPEL)
The Phil. Paper Manufacturers Assoc. Inc. (PPMAI):
(formerly Pulp and Paper Assoc. of the Phils.(PULPAPEL)
MEMBERS
MILLSITE
1. Trust International Paper Corp. (TIPCO)
Mabalacat, Pampanga
2. United Pulp and Paper Co. (UPPC)
Calumpit, Bulacan
3. Bataan 2020 Inc.
Samal, Bataan; Baesa, Q.C.
4. Container Corp. of the Phils. (CCP)
Balintawak, Q.C.
5. Noahs Paper Mill, Inc.
Marikina
6. Liberty Paper Inc.
Valenzuela City
7. Paperland, Inc.
Balintawak, Q.C.
8. Fiber Sorting Inc.
Pampanga
9. Asia Paper Ind. Corp.
10.St. Thomas Paper Corp.
11. Hansson Paper Phils. Corp.
12. Vanson Paper Ind. Corp.
Trece Martires, Cavite
Sto. Tomas, Batangas
Pasig, NCR
Valenzuela, NCR
What is Paper and Paperboard?
Paper Industry in Phils. -Current State and Background
2001
2010
Historical
Trend
% p.a.
2012
Est.
43
27
24
Industry Capacity, ‘000 Tons
1,580
1,297
1,200
-2.2%
Production
1,056
1,038
825
-2%
Imports
533
961
1,100
+9.5%
Exports
139
165
110
-2%
1,450
1,834
1,810
+2.2%
16
20
19
+2%
No. of Paper Mills
CONSUMPTION
Paper &Board per Capita
Consumption
Paper Mills remaining in Operation (2012)
1. Trust International Paper
Pampanga
Newsprint, Printing &Writing
2. United Pulp and Paper
Bulacan
Containerboards
3. Bataan 2020
Bataan, Q.C.
Pr &Wr, Containerboards,Bag paper
4. Container Corp. of Phils.
Quezon City
Containerboards, Cartonboard
5. Noahs Paper Mill
Marikina
Pr &Wr, Bag paper
6. Liberty Paper
Valenzuela City
Containerboards
7. Fiber Sorting
Pampanga
Cartonboard, Containerboard
8. Asia Paper Ind.
Cavite
Printing &Writing
9. Paperland / Valley
Quezon City
Cartonbd, Containerbd, Bagpaper
10. St. Thomas Paper
Batangas
Containerboard
11. Cascades / Malinta
Cavite
Containerboards
12. Multipack/Certified Mills
Laguna
Containerboards, Brown wrapping
Paper Mills remaining in Operation (2012)
13. Danao Paper
Cebu
Containerboards
14. Hansson
Pasig
Pr &Wr, Brown packaging paper
15. Hansson (Menzi)
Bukidnon
Packaging
16. Quanta
Pampanga
Tissue
17. Vanson
Valenzuela
Pr &Wr, Cartonboard
18. Fedco
Laguna
Pr &Wr, Cartonboard
19. Alliance
Valenzuela City
Pr &Wr, Cartonboard, Wrappings
20. Golden Swan
Cavite
Containerboard
21. Rosario
Valenzuela
Brown wrapping/packaging paper
22. Globe Paper
Malabon
Pr &Wr, Brown wrapping/packaging
23. Rural Paper
24. World Class Paper
Bulacan
Pampanga
Pr &Wr, Brown packaging
Packaging, Printing &Writing
Paper mills Closed /Shutdown –
from early 90’s-2011
1. PICOP Resources *
Surigao
Kraftlinerbd, NP, G’wood printing
2. SCA Hygiene
Cavite
Tissue and sanitaries
3. Kimberly-Clark
Laguna
Tissue and sanitaries
4. Paper City
Valenzuela
Pr &Wr, Cartonboard
5. Aclem
Laguna
Pri &Wr, Tissue, Brown wrapping
6. Manila Paper Mills
Quezon City
Pr &Wr, Containerboard, Wrapping
7. Sunrise
Bataan
Cartonboards, Containerboards
8. Dasmarinas Paper
Cavite
Cartonboards, Containerboard
9. East Asia Paper
Cavite
Tissue and Sanitaries
10. Arco
Las Pinas
Containerboard, Brown wrapping
11. Isopack
Laguna
Containerboards
12. Worldwide
Paranaque,Q.C.
Brown wrapping, Cartonboard
*Integrated Pulp-Paper Mill
PICOP Millsite in Surigao del Sur
_____________________________________________
Paper mills Closed /Shutdown –
from late 80’s-2011
13. Rustan Packaging *
Iligan
Cartonboards,Containerboard
14. Phil. Paper Mills
Tondo, Manila
Cartonboard, Containerboard
15. 3rd Wind Paper
Pampanga
Tissue and Sanitaries
16. Chanmeco
Valenzuela
Containerboard, Cartonboard
17. Asgard
Novaliches
Containerboard, Cartonboard
18. Paramount
Valenzuela
Printing & Writing, Brown wrapping
19. Fortuna
Valenzuela
Containerboard, Wrapping, Tissue
19. Prince / Sn Fernando
Pampanga
Printing &Writing
20. Oxford Paper
Laguna
Pr &Wr, Containerboard,Wrapping
21. PDM
Laguna
Specialty Paper
*Integrated Pulp-Paper mill
Pulp Mills in Philippines
In operation as of 2010:
Site
Capacity
Product
1. Canlubang Pulp
Laguna
3,600 Tons/yr
Abaca Market pulp
2. Alindeco
Albay
12,500
Abaca Market pulp
3. Specialty Pulp Manuf
Leyte
12,000
Abaca Marketpulp
4. Pulp Specialists Inc.
Leyte
5,000
Abaca Market pulp
5. Newtech Pulp
Lanao
8,500
Abaca Market pulp
6. PICOP Resources *
Surigao
110,500 T/yr
Kraft,Mech’l pulp
7. Cellophil Resources
Abra
65,000
Kraft Market pulp
8. Isarog
Albay
9,000
Abaca market pulp
CLOSED / Shutdown from 90’s -2010
*Integrated to Paper mill.
THE PAPER INDUSTRY ALSO HAS CLOSE LINKAGES TO:
• Technical Association of the Pulp and Paper
Industry (Tappi-Phils.)
• DOST – Forest Products Research and
Development Institute
• DTI – Bureau of Product Standards
• DENR – Environmental Management Bureau
• Printing Industries Development Foundation
• UPLB College of Forestry and Natural Resources
Problems of the Pulp and Paper Industry in Phils.
________________________________________
• RAW MATERIAL
–
–
–
–
Local wastepaper quality low (poor yield, inefficient operation)
Local wastepaper supply is inadequate (high price)
Imported wastepaper supply getting tight
No local source of pulp.
• HIGH COSTS OF ENERGY
– Electricity (requires investment for lower-cost power and
energy-efficient technologies)
– Fuel (requires investment to convert to coal, biomass and fuelefficient technologies)
Paper Industry Fiber Raw Material Demand
Wastepaper, Local-sourced
2010
970,000
- White/Deinking grades
250,000e
- Brown/Packaging grades
Wastepaper, Imported
604,500
120,400
- White/Deinking grades
248,000
200,000e
- Brown/Packaging grades
Wastepaper Totals
Pulp (all imported since 2010)
2011
854,500
48,000
1,090,400
67,250
1,102,500
49,820
Problems of the Pulp and Paper Industry in Phils. –2
________________________________________
• MANY PAPERMACHINES OLD AND SMALL
–
–
–
–
Small mills costlier to operate than bigger mills
Difficult to rehab, maintain, upgrade (frequent breakdown)
Some mills not originally intended to run on 100% wastepaper
Lack equipment to handle low-grade wastepapers.
• FLOODING OF DOMESTIC MARKET WITH IMPORTED PAPER
– Tariff duties removed/minimized
– Misclassification in imports
– Low valuation of certain grades paper.
Problems of the Pulp and Paper Industry in Phils. –3
________________________________________
• ENVIRONMENTAL REGULATIONS GETTING MORE STRINGENT
– Mills suffering cash flow lack low-ROI funds to install more antipollution devices
– Mills must invest in cleaner production technologies (expensive)
– To improve environmental performance – need highly-technical
professionals or training for its personnel.
• SKILLED AND PROFESSIONAL MANPOWER DIMINISHING
–
–
–
–
Overseas jobs pull workers from paper industry
Other industries offering more attractive compensation
Fast turnover / high cost of training
Declining # of engineering graduates going to pulp and paper
industry.
PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES
_____________________________________________
• RAW MATERIAL
– Limit export of OCC due to supply is inadequate
– Invest on technologies that improve wastepaper
utilization
– Establish local production of woodpulp (enable
existing paper mills to make higher-grade paper
&board)
– Develop agri-wastes and annual crops as sources of
non-wood fibers (supplemental virgin pulp for existing
paper mills).
Recovery Rate of Selected Countries
Selected Countries
Recovery Rate
as of 2011
USA
66.8%
Japan
76.9%
World
57.2%
Malaysia
54.1%
Indonesia
53.5%
Philippines
49.9%
China
45.0%
Source : RISI World Pulp and Recovered Paper Forecast
PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -2
_____________________________________________
• HIGH ENERGY COSTS
– Upgrade existing mills to energy-efficient
technologies
– Encourage investments in co-gen plants
– JV with new power projects
– Encourage investments in bio-mass and wasteburning power plants or boilers
– Support projects based on clean and renewable
energy.
PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -3
_____________________________________________
• OLD AND LOW-CAPACITY PAPERMILLS
– Projects and programs to improve tonnage and
productivity
– Retool or replace small machines to shift to
higher-value paper products
– Make available local virgin pulp to reinforce lowgrade recycled fiber and enable production of
better-quality paper and board.
PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -4
_____________________________________________
• IMPORTED PAPER FLOODING DOMESTIC
MARKET
– Set up better controls vs. misdeclaration of
imports
– Defer further reduction of remaining tariff duties
on paper and paperboard
– Help existing mills establish capability to make
higher-grade paper products.
Paper products we should make
PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -5
_____________________________________________
• ENVIRONMENTAL ASPECTS
– Incentives for investment in clean technologies
– Support for upgrading wastewater treatment plants
and new pollution control devices.
• MANPOWER ASPECTS
– Support for training and manpower development
programs, esp. intended at improving process
efficiencies and environmental performance.
Market Growth by Grades of Paper/Paperboard
Segment
Share of
Market %
(2011-2016)
456,400
26%
+1%
42,000
212,000
12%
-2%
466,200
403,300
869,500
49%
+3.5%
Tissue/Sanitaries
30,000
65,000e
95,000
5%
+4%
Other Paper &Board
24,000
115,800
139,800
8%
+2%
2011
Local
Productione
Imports
Printing &Writing
260,000
196,400
Newsprint
170,000
Packaging P & B
TOTALS
950,200
Total
Market
822,500 1,772,700*
*with exports
Projected
Growth
+2.3%
MARKET DRIVERS OF GROWTH -PULP &PAPER INDUSTRY
_____________________________________________
• Growth in Exports (Electronics, Fruits, Handicrafts, Garments,
Furniture)
• Growing Local Consumption (Processed Food, Appliances,
Consumer goods) due to population growth and rising
purchasing power (OFW,Tourism,BPO and service sectors)
• Rise of Small &Med. enterprises, incl. provincial, agri- areas
• Growth in Education, literacy, cultural levels
• Growth in Entertainment, Sports, Fashion industries
• Expansion in domestic retail trade and inter-island commerce
(Packaging &documentation of goods moving frm provincial
producers to consuming cities,towns)
SPECIFIC PROJECTS AND PROGRAMS RECOMMENDED
_____________________________________________
• RAW MATERIAL (5-8 years)
– Estab. Mechanized wastepaper sorting plants in urban areas
– Develop industrial tree plantations of fast-growing species (5years gestation) in logged-over and denuded areas
– Agro-Forestry/Tree farmer cooperatives for privately-owned lands
– Social Forestry for informal settlers and indigenous peoples
– Encourage contract-tree growing for wood-based industries
(timber, biomass energy, paper pulp, chip exports).
– Invest in wood-based market pulp mill
• Proposed site : Northeastern Mindanao (Caraga, Reg.11)
FOREST-BASED PULPMILL PROJECT FOR PHILS.
_____________________________________________
• Proposed Capacity : 330,000 Tons/Year (1,000 Tons/day)
• Product Grades
: Market Pulp (Hardwoods)
• Target Market
:
– 150,000 Tons/year Local demand (Bleached and Unbleached Pulps)
– 180,000 Tons/year Exports (Bleached Hardwood Pulp)
• Recommended Site : Eastern Mindanao
• Requires foreign equity investments to
– help fund the Capital for the Project
– gain access to Export market
– acquire modern technologies in paper pulp manufacturing
•
- Cont’d
FOREST-BASED PULPMILL PROJECT FOR PHILS. –p.2
_____________________________________________
• Fast-growing species :
– Mostly Acacia Mangium, Eucalyptus hybrid spp, Gmelina, etc.
• Reforestation / re-planting cycle : 5 – 7 years
• Areas to be developed into sustainable forests:
– Industrial Tree Plantation : 20,000 hectares
– Agro- and Social Forestry : 30,000 hectares
SPECIFIC PROJECTS AND PROGRAMS RECOMMENDED
_____________________________________________
• PRODUCT UPGRADES / IMPORTS REPLACEMENT (3-5 years)
– Invest in agri waste-based pulp mills (using rice straw, bagasse, corn stalk, palm
oil /pineapple/tobacco wastes) – 50-100 Tons/day
• Proposed site : Northern/Central Luzon, Negros, Mindanao
– Invest in non-wood pulpmills utilizing annual plants (abaca, banana, kenaf,
bamboo) – 30-50 Tons/Day
• Proposed site : Bicol, Southern Luzon, Leyte, or Mindanao.
– Invest in non-integrated kraftliner paper mill to serve the needs of fruit
exporters and high-quality packaging requirements (300-500 Tons/day)
• Proposed site : General Santos, Davao or Cagayan de Oro
UPGRADE FPRDI-DOST R&D CAPABILITIES TO SUPPORT:
• Program to acquire new testing facilities for FPRDI Lab
(Est. Budget P10 Million)
• Project to reactivate/replace the Pilot paper machine
at Los Banos, as Center for research and training of
industry personnel and engineering students.
• Program to strengthen the cooperation in Research
and Lab. services at DOST-FPRDI with the pressing
technical requirements of the Paper industry.
• Establish formal Training programs for Paper industry
personnel and new Engineering graduates with both
FPRDI-DOST and TESDA.
Jobs generation aspects of Pulp &Paper Mills
Employment/Livelihood generation =
Direct
Indirect
Integrated Pulp-Paper Mill, 500-TPD
Recycle-based Paper Mill, 300-TPD
1,300
250
30,000
87,500
Market Pulp Mill, 1,000 TPD
500
140,000
8+20, 2.7+6
PAPER INDUSTRY ROADMAP – Goals and Programs
_____________________________________________
• Short-Term (2014-2016):
–
–
–
–
–
–
–
–
Raise local paper recovery rates to 60%
Discourage exports of local wastepaper
Launch large-scale tree plantations for pulp,timber,biomass
Plan and begin the engineering for a modern pulpmill project
Upgrade technologies at existing mills
Build local capabilities to produce higher grades of paper
Establish smaller pulpmills for agri-wastes and annual crops
Upgrade the research and training facilities of FPRDI.
•
- Cont’d
PAPER INDUSTRY ROADMAP – Goals and Programs
_____________________________________________
• Medium-Term (2017-2022):
–
–
–
–
–
Further raise paper recovery rates to 70%
Construction and startup of wood pulpmill
Upgrade/expand existing mills to produce Hi-grade paper
Expand forest plantations to support pulpmill project
Continue upgrading the production technologies of old mills
• Long-Term (2023-2030):
– Expand production of non-wood pulp and paper
– Retire old machines and consolidate operations of small mills
– Expand Exports of pulp
•
- Cont’d