Thailand

Adul Udol
Siamkraft Industry Co., Ltd., Bangkok

Economic growth

The GDP growth rate in Thailand continually expanded from that of 1993, 1994 and 1995 which were 8.3 percent, 8.7 percent and 8.6 percent, respectively. Until the end of 1995, the government policy intended to slow down the GDP growth rate at the suitable situation and also reduce the pressure of both inflation and loss in current account, particularly, the strictness in financial policy from 1995 running to 1996.

In 1996, the GDP growth rate of Thailand was approximately 6.8 percent, slowing down from 1995 as a result of the sluggishness in domestic consumption and private investment. The growth of the manufacturing sector grew by 7.8 percent in 1996, reduced from 11.0 percent in 1995 while the growth of an export sector decreased from 23.6 percent in 1995 to only 0.2 percent in 1996.

Growth rate (%)	Average 1987-1991a	Actualb
		1992	1993	1994	1995	Est. 1996
GDP	10.8	8.1	8.3	8.7	8.6	6.8
Agriculture	3.4	6.0	-1.9	5.5	3.0	3.6
Manufacturing	13.9	11.3	11.1	9.3	11.0	7.8
Export	24-6	13.2	13.0	21.3	23.6	0.2
Pulp and paper industry	15.5	12.4	16.3	16.1	7.2	9.0

^a6th National Economic Plan.
^b7th National Economic Plan.

The growth rate of pulp and paper industry increased from 7.2 percent in 1995 to 9.0 percent in 1996. The growth rate of pulp and paper industry in Thailand is usually two digits except for 1995 and 1996 as a result of the change in world pulp and paper prices as well as the economic slow down in Thailand in 1996 so that the growth rate of pulp and paper industry was only 1.3 times the GDP growth rate.

Pulp and paper industry's performance

Domestic capacity

Pulp

In 1996, total annual production capacity for short fibre pulp increased by 86 percent from 331 000 to 615 000 air dry tons per year. The additional capacities were from two new pulp producers, namely, Advance Agro Public Company Limited with 175 000 air dry tons per year and Panjapol Paper Industry Public Company Limited with 99 000 air dry tons per year. While Phoenix Pulp and Paper Public Company Limited has increased to its full production capacity of 210 000 air dry tons. The existing three pulp mills, namely, the Siam Pulp and Paper Public Company Limited, Siam Cellulose Co. Ltd., and Bang Pa-in Pulp and Paper Mill still maintained their capacities of 68 000, 60 000 and 3 000 air dry tons per year, respectively.

Company	Pulp production capacity (thousand tons)
	1995	1996
Phoenix Pulp and Paper	200	210
Advance Agro	-	175
Panjapol Pulp Industry	-	99
Siam Pulp and Paper	68	68
Siam Cellulose	60	60
Bang Pa-in Pulp and Paper Mill	3	3
Total	331	615

Paper

In 1996 there were 47 paper mills with a combined annual capacity of 2 842 000 tons, 16.3 percent increase as compared to 2 444 500 tons in 1995 including the new pulp and paper mill, namely, Advance Agro Public Company Limited with 217 200 tons per year.

The total paper capacities in 1996 can be categorized into 1 625 000 tons for kraft paper, 631 000 tons for printing and writing paper, 264 000 tons for paperboard, 110 000 tons for newsprint paper, 132 000 tons for household and sanitary paper and 80 000 tons for gypsum plaster board liner (other papers).

	Paper capacity (thousand tons)
	1995	1996
Kraft paper	1 416	1 625	57%
Printing and writing paper	465	631	22%
Paperboard	264	264	9%
Household and sanitary paper	110	132	5%
Newsprint paper	110	110	4%
Other papers	80	80	3%
Total	2 445	2 842	100%

Consumption, import and export

Pulp and Wastepaper

In 1996, total demand of fibre raw materials in Thailand were 2 253 000 tons, 11.3 percent increased from 1995. Of this amount, 11 percent or 249 500 tons were long fibre pulp, 19 percent or 444 000 tons were short fibre pulp and the rest of 1 559 600 tons were wastepaper.

The prices of world pulp market, both short and long fibres, have decreased since the end of 1995. In mid-1996, pulp prices have slightly increased and continued until the end of 1996.

From the first quarter to the third quarter of 1996, Thailand imported 282 000 tons of short fibre and long fibre pulp, mainly from USA, Canada, Chile, Brazil, New Zealand, Sweden, Indonesia and Swaziland. The major import were coniferous bleached chemical wood pulp, non-coniferous bleached chemical wood pulp and coniferous unbleached chemical wood pulp which account for 29 percent, 28 percent and 27 percent of total imported pulp, respectively. Thailand also imported 464 000 tons of wastepaper during the same period from USA, Singapore, Germany, the Netherlands, New Zealand and Kuwait. The major kinds of imported wastepaper were old corrugated containers (OCC), representing 65 percent of the total imported amount.

In the same period, 88 000 tons of pulp were exported. The main destinations were mostly in Asia, in particular, India, China, South Korea, Indonesia, Taiwan and Japan, and also Italy.

		1995 (thousand tons)	1996 (thousand tons)
Short fibre pulp	- Demand	356	444
	- Import	139	95a
	- Export	98	88
Long fibre pulp	- Demand	211	250
	- Import	211	187a
	- Export	-	-
Wastepaper	- Demand	1 458	1 560
	- Import	607	464
	- Export	-	-

^aQ1-Q3/1996.

Paper

In 1996, the demand for paper in Thailand increased by 5.6 percent from 2 248 200 tons in 1995 to 2 374 500 tons. The domestic consumption of paper could be categorized as follows: 47 percent for kraft paper, 18 percent for printing and writing paper, 16 percent for newsprint paper, 11 percent for paperboard, 3 percent for household and sanitary paper and the rest for other papers.

Paper consumption in Thailand in 1996 was approximately US$ 2 087 million (US$ 1 = Baht 25.5), a decrease of 5 percent from those in 1995 due mainly to price decrease since the end of 1995.

From the first quarter to the third quarter of 1996, Thailand imported 344 700 tons of paper and paperboard. The major import was newsprint paper which accounted for 45 percent, followed by 15 percent for paperboard, 14 percent for printing and writing paper, 6 percent for kraft paper, 2 percent for household and sanitary paper and the rest 18 percent for others.

In the same period, Thailand also exported 155 800 tons of paper, of which 38 percent was kraft paper, 21 percent was printing and writing paper, 18 percent was paperboard, 8 percent was household and sanitary paper, 7 percent was newsprint paper and the rest 8 percent for others.

	Demand		Import		Export
	(thousand tons)		(thousand tons)		(thousand tons)
	1995	1996	1995	1996a	1995	1996a
Kraft paper	1 064	1 118	20	22	123	60
Printing and writing paper	402	425	58	50	37	33
Paperboard	264	269	87	51	27	27
Newsprint paper	345	372	252	153	23	11
Household and sanitary paper	69	76	11	8	17	13
Other papers	104	115	91	61	13	12
Total	2 248	2 375	519	345	240	156

^aQ1-Q3/1996.

Outlook for the future

Trend in the pulp industry during 1997-2001

Domestic pulp consumption is expected to increase from 694 000 tons in 1996 to 1 151 000 tons in 2001, an average growth rate of 11 percent per year. The consumption of short fibre pulp will rise from 444 000 tons in 1996 to 737 000 tons in 2001 while production capacity is expected to expand from 606 000 tons in 1996 to 656 000 tons in 1997, and remain constant onwards, given no confirmation news about capacity expansion during that period for now. The additional capacities in 1997 will be from the Siam Pulp and Paper Public Company Limited with the capacity expansion of 50 000 tons per year. Moreover, we expected another new-comer, Asia Tech Pulp and Paper Public Company Limited, with the annual production capacity of 150 000 tons. As a result, Thailand will have surplus of short fibre pulp for exporting.

		1996	1997	1998	1999	2000	2001
		(thousand tons/year)
Demand	- Short fibre pulp	444	490	543	602	666	737
	- Long fibre pulp	250	275	305	339	375	414
Capacity	- Short fibre pulp	615	656	656	656	656	656
	- Long fibre pulp	-	-	-	-	-	-
Surplus (shortage)	- Short fibre pulp	171	166	113	54	(10)	(81)
	- Long fibre pulp	-	-	-	-	-	-

Trend in the paper industry during 1997-2001

Total annual demand for paper and paperboard in Thailand is expected to increase from 2.4 million tons in 1996 to 3.9 million tons in 2001, an average growth rate of 9-11 percent per year. Thailand will also have surplus of paper from 1996 to 2001. During the next five years, kraft paper will be account for 48 percent, 19 percent for printing and writing paper, 14 percent for newsprint paper, 11 percent for paperboard, 3 percent for household and sanitary paper and the rest for miscellaneous minority of total paper consumption.

Project demand and supply of paper in Thailand during 1996-2001 is shown in the following table:

		1996	1997	1998	1999	2000	2001
		(thousand tons/year)
Kraft paper
	-Demand	1 118	1 268	1 399	1 543	1 688	1 847
	-Capacity	1 625	1 804	1 906	2 177	2 497	2 646
Surplus (shortage)		507	536	507	634	809	799
Printing and writing paper
	-Demand	425	467	523	586	656	735
	-Capacity	631	883	1 061	1 061	1 061	1 061
Surplus (shortage)		206	416	538	475	405	326
Paperboard
	-Demand	269	304	335	368	405	445
	-Capacity	264	264	264	264	264	264
Surplus (shortage)		(5)	(40)	(71)	(104)	(141)	(181)
Household and sanitary paper
	-Demand	76	83	91	101	110	120
	-Capacity	132	132	155	155	170	170
Surplus (shortage)		56	49	64	54	60	50
Newsprint paper
	-Demand	372	402	434	469	506	547
	-Capacity	110	120	273	281	289	297
Surplus (shortage)		(262)	(282)	(161)	(188)	(217)	(250)
Others
	-Demand	115	127	139	153	168	185
	-Capacity	80	80	80	80	80	80
Surplus (shortage)		(35)	(47)	(59)	(73)	(88)	(105)
Total
	-Demand	2 375	2 651	2 921	3 220	3 533	3 879
	-Capacity	2 842	3 283	3 739	4 018	4 361	4 518
Surplus (shortage)		467	632	818	798	828	639
Population (million)		60.0	60.6	61.5	62.4	63.4	64.3
Per caput consumption (kg./head)		39.6	43.7	47.5	51.6	55.7	60.3