Pulp and paper development in Asia and the Far East
A Conference on Pulp and Paper Development in Asia and the Far East was held in Tokyo, Japan, from 17-31 October 1960, organized jointly by FAO and the United Nations Economic Commission for Asia and the Far East (ECAFE).
Official delegations attended from Australia, Burma, Cambodia, Federation of Malaya, France, India, Indonesia, Japan, Republic of Korea, Mainland China, New Zealand, Pakistan, Philippines, Thailand, Union of Soviet Socialist Republics, United Kingdom, United States of America, and the Republic of Viet-Nam. Representatives and experts from Argentina, Brazil, Canada, Czechoslovakia, Chile, Dominican Republic, Federal Republic of Germany, Finland, Italy, Mexico, Norway, Romania, Sweden, Switzerland also attended the meeting in a consultative capacity, together with a representative of the United Nations Educational, Scientific and Cultural Organization (UNESCO) and observers from the International Confederation of Free Trade Unions (ICFTU), a non-governmental organization.
Mr. Mitsujiro Ishii, Minister of International Trade and Industry, welcomed delegates on behalf of the Government of Japan. He pointed out that in the 90 years since machine paper making was introduced into Japan, the country had become the world's third largest paper producer. By 1970, Japan would be producing 9.6 million tons, nearly twice as much as in 1960. He felt that though, at present, Asian production and consumption of paper was low, the region was rich in forest resources, and that it should not be too difficult to develop the industry once ways had been found of using them. He firmly believed that countries of the region should pool economic and technical efforts to this end.
U. Nyun, Executive Secretary of ECAFE, underlined Japan's importance in the paper industry. He surveyed action in the field of forest resources and pulp and paper development planning by the UN Regional Economic Commissions and specialized agencies. He recalled the success of a similar conference in Buenos Aires in 1954, and was sure that the present conference would be equally successful. It would have a catalytic effect in accelerating the development of pulp and paper manufacturing capacity in the region. He reminded the conference that according to estimates the region's paper requirements by 1975 would be equal to the whole world's prewar consumption. Countries would have to produce more to meet this demand. The industry in the region must find ways and means of using the wide variety of fibrous raw materials available, and the problems involved were a challenge to those gathered at the meeting. The availability of traditional fibres from coniferous woods was limited; but attempts should be made to solve this problem by plantations. He felt that small-scale paper making industries should be encouraged, and that in the case of small countries which did not have sufficient demand or raw materials, joint venture projects might be conceived between neighboring countries.
Dr. Egon Glesinger, Director, Forestry and Forest Products Division, FAO, reminded the Conference that FAO regarded pulp and paper as one of its main responsibilities and that the present Conference was one of a series of actions undertaken by his division going back over the past twelve years. The Conference was important for two reasons: first, because although paper, like food and clothing, was a commodity universally consumed, production had so far been concentrated in a small number of countries; secondly, because paper industries were the largest single producers of value from the forests. Pulp and paper were fast becoming, to the foresters of the world, bigger in terms of value than any other forest product. Consumption of paper at present in the region was 6.5 million tons. By 1965 requirements would exceed 11 million tons, and by 1975 they would have reached nearly 25 million tons. This increase could not be covered by imports. To add, in the next 15 years, around 18 million tons of paper imports was inconceivable, not only in terms of availability and transport, but because it would add roughly 4,000 million dollars to foreign exchange expenditure. If the increased needs were to be met, the expansion would have to come from within the region. There were three problems connected with the expansion of the industry in the region. The first concerned the quantity and quality of raw materials available. The second was that of trained personnel, a problem which could be partly solved if the development of new capacity were to come about as a result of a partnership between those countries which had paper industries and those intending to set up new mills. The third problem was that of capital. It was his hope that this Conference would help toward finding solutions to these three problems.
DISCUSSIONS AT THE CONFERENCE
Mr. T. Shimoda (Japan) was unanimously elected Chairman of the Conference with Mr. Anondo (Indonesia) First Vice-Chairman and Mr. M. P. Ramiro (Philippines) Second Vice-Chairman.
A committee consisting of representatives of Australia, Canada, Mainland China, Federation of Malaya, France, India, Indonesia, Japan, Pakistan, Philippines, the Union of Soviet Socialist Republics, and the United States of America was appointed to draft the report of the Conference.
Discussing trends in pulp and paper production, consumption and trade, the Conference endorsed the methodology adopted by the Secretariat to arrive at estimates of future requirements - a methodology already approved by the World Consultation convened in Rome in September 1959 - and stressed the value to countries in the region of requirement estimates of this type.
Most Asian countries are in the early stages of industrialization, and the need to mobilize. and allocate resources compels them to engage in development planning and to employ a variety of devices for influencing the course and pattern of economic growth. Since the measures they take influence in many different ways the future level of both production and consumption of paper, it is necessary to fix targets, however tentative, as an aid to decision-making. The Secretariat estimates of future requirements offered a valuable starting point.
Many delegates pointed out, however, that the Secretariat estimates were decidedly conservative, since they indicated future levels of consumption which, on the basis of historical and geographical comparisons, are likely to be associated with the achievement of certain income levels, taking into account the close relationship which exists between income and consumption. Requirements so estimated, however, do not correspond to - in fact, fall far short of - basic needs. Many Asian governments therefore, particularly those engaged on illiteracy liquidation programs, are planning or will wish to plan for higher targets. Planning for lower targets, i.e., according a higher priority to development in other sectors, involves deliberate restriction of paper consumption, with its consequential effects on educational, cultural and industrial programs.
The Conference recommended that pulp and paper demand and capacity trends in the region be kept under continuous review and urged FAO, in close collaboration with ECAFE and UNESCO, to continue the collection, analysis and dissemination of available data for the benefit of Member Governments of the region. The Conference also recommended that Member Governments in the region give greater attention to improving the basic statistics needed for such studies and encourage the prosecution of national studies of consumption trends.
In deciding what priority to accord to the pulp and paper sector in development planning many factors have to be borne in mind. Capital requirements are high in this sector, and special skills are needed. On the other hand, pulp and paper ranks high as an import saver; it generates high value products from indigenous raw material; and development in this sector has an important multiplier effect in generating secondary industries based on paper and in promoting associated industries such as chemicals. While mill operations are rarely labor-intensive, associated operations, whether in the forest or in assuring supplies of nonwood fibre, can provide needed employment opportunities, thereby absorbing surplus rural labor or, in some cases, replacing public works. Moreover, pulp and paper development normally makes possible a needed decentralization of industry and can often help to valorize basic investment in water, power and communications. Most important of all, however, is the fact that inadequate paper supplies will invariably retard development in other sectors.
The Conference noted that national markets for paper in many countries of the region, while small at present, are rapidly growing. From this three things follow. First, in planning new mills the possibility of future expansion should always be kept in mind. Secondly, because it may take five to seven years to establish a new mill, especially if the raw material resource has to be inventoried, it is desirable to initiate development planning now, even though markets today are small, if a critical situation is to be averted later on. Thirdly, the small size of national markets, the economies of scale in pulp and paper production, and in some cases the complementarity of resources between countries, all point to the need for a regional approach and some co-ordination of development programs. The Conference in this connection drew attention to the fact that self-sufficiency might not in all cases be desirable. The achievement of self-sufficiency through high-cost ventures could, for example, lead to the satisfaction of effective demand at a high price level while leaving basic needs unsatisfied. All these points should engage the earnest attention of governments in the region.
While in general the region possesses sufficient fibrous resources to sustain a substantial expansion of the region's paper industry, the Conference drew attention to the fact that in the later decades of this century paper needs will have multiplied many times. Governments of the region have a responsibility for conserving, and where necessary creating, resources of fibre for the future. Since the measures required are essentially long-term, needing decades to take effect, the Conference urged all governments of the region to review their forest policies in the light of these facts and to initiate without delay the measures needed to ensure that raw material shortages shall not lead to restricted paper consumption in the longer term.
The region has made great progress since the war in reducing its dependence on imports of many categories of paper, though a number of technical and economic factors have limited the progress made on newsprint. In spite of the increase in regional paper production, however, net imports into the region have increased. Even if all new projects under consideration should materialize, imports from other regions will certainly be required to supplement domestic production through most of the coming decade. The data available on capacity and demand trends in the traditional exporting regions indicate that the quantities required will be available. Beyond that, however, there is no certainty that there will be export surpluses available elsewhere of a magnitude to satisfy the rapidly rising needs of the Asian region. What is certain is that the region will not be able to satisfy its paper needs if it has to rely heavily, and increasingly, on imports. For these reasons the Conference recommended that Member Governments in the region which have not already done so, undertake a careful review of their future needs of paper and take such steps as are open to them to encourage the development of pulp and paper industries in the region wherever the availabilities of fibre and other production factors give promise of the successful establishment of sound ventures in this sector. It was the considered view of the Conference that, unless positive action of this kind is undertaken, there is a serious danger that current educational programs will be jeopardized, the creation of an informed citizenry retarded, antiquated distribution systems retained, and industrial progress hampered.
Recent technical advances and technology of the future in pulp and paper manufacture
The Conference discussed recent technical advances and the technology of the future in pulp and paper manufacture on the basis of four background papers. These documents all served to underline the rapid technical development which has taken place in the last ten years. This extends to all phases of pulp and paper operations from the harvesting and transport of fibre raw materials to product development. In the discussion, various nonconventional methods of pulp and paper manufacture were described. It was believed that the pace of development will increase still more and will have to be followed closely by those responsible for planning in all sectors related to pulp and paper production.
The discussion centered on the two basic problems: the fuller use of the region's resources of short-fibred raw materials; and the impact of modem techniques on the planning of new pulp and paper mills in the region.
There were many examples of the successful use of short-fibred pulps at high percentages in a wide range of papers. Nevertheless there was an urgent need to increase research in this field within the region. The Conference recommended that governments of the region avail themselves of international (including bilateral) technical assistance to develop and strengthen their research institutions, and drew attention of governments to the possibility of invoking the aid of the United Nations Special Fund for this purpose.
The Conference attached particular importance to improving the exchange of information about research programs and findings in the region, and recommended the holding of regular technical Meetings in the region of research workers in pulp and paper together with mill technicians as an efficient means of disseminating information and avoiding duplication of research and technical development work.
The need for a fuller consideration of the basic properties of short fibres and for using these properties to advantage in paper manufacture was stressed. Quality standards and specifications should not in all cases be patterned on those which have been developed on the basis of long fibred pulps and should not be set up until considerable experience has been accumulated within a country.
The Conference stressed that modem techniques should he employed in new mills to be built in the region. This does not necessarily imply that mechanization and automation should be used to the same extent in industrially advanced and less advanced countries. But full advantage should be taken of recent technical advances which have improved the efficiency of the operations. It was further noted that pulp and paper mills, being capital intensive, cannot of themselves play a major role in solving unemployment problems. In this respect forest operations afford greater possibilities, but even here steps should be taken to raise labor productivity by the provision of improved tools.
It was noted that continuous pulping offers advantages in many cases. Attractive features are low investment cost and ease. of operation and control.
Further rapid developments toward smaller, efficient pulp and paper units can be expected. This will tend to increase the difficulty of selecting equipment. The Conference stressed the importance of making thorough preliminary studies, using qualified specialists, especially when embarking upon a project involving the use of new techniques. It was further noted that there was real need in the region for continuous objective evaluation of new processes.
Fibrous raw materials supply and economic availability
The Conference discussed the region's fibrous raw materials supply and economic availability, based on Secretariat papers and the case studies carried out in India, Burma and Thailand by the Stanford Research Institute and the ECAFE/FAO Secretariat.
The Conference had already decided that the rapidly rising needs for paper and boards - a four-fold increase over the next 15 years in consumption in the Far East (excluding Mainland China) and a doubling in Oceania - would have to be largely satisfied by indigenous production the basic prerequisite of which is the availability at reasonable cost of suitable fibrous raw materials. The Conference therefore discussed the availability of wood, bamboo, bagasse, straw, grasses and other possible fibrous raw materials, with particular reference to the following questions:
1. What amounts are needed?
2. What raw materials are available in each subregion?
3. Can they be made available in sufficient quantities at economic prices to meet minimum requirements of long-fibred chemical pulp and groundwood type pulp?
The Conference endorsed the Secretariat estimate of potential fibrous raw material requirements: these implied a need by 1975 of over 32 million cubic meters of wood, 1.9 million tons each of bagasse and bamboo, and over a million tons of straw and grasses in the Far East (excluding Mainland China), and 3.8 million cubic meters of wood in Oceania.
The following were the conclusions on the availability of the various raw materials:
(a) Wood. The prospects of supplies of short-fibred wood pulp were generally better than long-fibred pulp from conifers, but pulpwood from existing mixed tropical forests would in many cases be more expensive than such alternative raw materials as bagasse or rice straw. It was also likely to cost more than pulpwood from existing or potential plantations of indigenous or exotic fast growing species. However, tropical forests should he studied with a view to increasing their productivity of pulpable species. The utilization of wood residues should also be kept in view.(b) Bamboo. Bamboo pulp was likely still to be the main substitute for coniferous chemical pulp, because in countries where both were available bamboo would often be cheaper than pines from natural stands. Resources for large-scale expansion of pulp production were available in South Asia and continental Southeast Asia; the largest untapped source, capable of yielding several million tons a year, is the bamboo in Burma. Bamboo from artificial plantations might prove even cheaper than from natural stands.
(c) Grasses. This region contains many grasses and reeds which are suitable as pulping material, The economics of their utilization should be investigated.
(d) Bagasse. Over most of the region, bagasse was likely to be the cheapest short-fibred material available in large quantities. A considerable expansion of bagasse pulping was foreseen.
(e) Straw. Straw was not likely to become an important raw material in the over-all supply, but was capable of supporting a limited expansion in small and medium-sized mills in continental and insular Southeast Asia and in East Asia.
A Secretariat paper was also tabled providing an example of a study of economic availability of various raw materials in different countries for different potential mill sites. The Conference invited the attention of member countries to the methodology used, which, by comparing the cost of each raw material in terms of a ton of bleached pulp at each potential mill site, helped in the choice of mill Bite; in the determination of the best combination of raw materials; and of mill capacity, by indicating the effect of increase of capacity on the average cost of raw materials delivered at mill site.
The following main conclusions were agreed:
1. Over-all potential supplies of raw material are more than sufficient to cover estimated needs up to 1975 and even beyond.2. Each subregion seems capable of satisfying its own needs, with the possible exception of East Asia.
3. Except in East Asia, raw materials could be made available at prices comparing favorably with those in western countries.
4. Three outstanding sources of supply exist; the untapped bamboo reserves in Burma; the industrial bagasse in South and East Asia, and existing and possible future plantations of broadleaved and coniferous species in continental and insular South. east Asia and East Asia.
In many countries the basic data required for analysis do not exist. The Conference therefore recommended the initiation of the following studies without delay:
(a) reconnaissance inventories of forests;(b) detailed inventories, capable of providing data on stocking, species and growth of selected forest areas shown by reconnaissance to have industrial potential;
(c) economic appraisal and feasibility surveys of data in relation to potential mill sites.
The possibility of obtaining financial assistance from the United Nations Special Fund for the prosecution of such preinvestment studies should be kept in mind.
With a view to creating new resources which will undoubtedly be needed in many areas in the longer term, the Conference reaffirmed that a careful reappraisal and revision of forest policies was necessary. It endorsed the recommendation made by the recent Fifth Session of the Asia Pacific Forestry Commission in regard to the Timber Trends Study recently undertaken by FAO and ECAFE. Creation of plantations of fast-growing species and conversion of natural mixed forests into stands of more suitable species was urged. New Zealand was cited as an example of the growing of man-made forests of exotic species (Pinus radiata) geared to industry needs.
Other prerequisites for pulp and paper production
The short statement made by delegates from countries of the region indicated that most countries are fairly well situated with regard to the supplies of various chemicals required for the manufacture of pulp, paper and paperboard to meet their present and future requirements. Countries at present deficient in certain chemicals could obtain these by intraregional trade or by imports from Europe and America or by exploitation of their own potential resources.
The Conference approved the procedure adopted by the Secretariat for estimating the total requirements of various chemicals for each subregion. It was suggested that the tables be amplified and revised if pulping processes other than those indicated in the Secretariat paper were adopted in mills in the region.
As regards recovery of chemicals from spent liquors of digestion the opinion of the Conference was that recovery plants for units smaller than 50 to 60 tons per day were uneconomical due to the proportionately high cost of the plants. It was pointed out, however, that research was currently in progress for the development of processes and plants for the recovery of chemicals and heat from spent liquors from small units (10 to 15 tons per day) and that installation of such small recovery plants is likely to be an economically feasible proposition in the near future.
Suggestions on the production and availability of the required quantities of chemicals in individual countries and the estimated requirements of water, steam power, fuel and transportation facilities given in Secretariat Paper IV were generally approved.
One obstacle to the expansion of pulp and paper production in the region is the dearth of qualified and trained technicians, engineers and technologists. The Conference stressed the need to expand technical training facilities in the region at all levels. The Conference heard reports of work already done in this field by UNESCO and ILO and noted the contributions which these agencies could make toward extending technical training programs in the region.
The Conference recommended that the United Nations agencies concerned should collaborate in the preparation of a directory of training facilities available. Delegates from countries both within and outside the region outlined the facilities available in their countries, and indicated their willingness to accept students and trainees from other countries at their national institutions and also to accord mill training facilities. FAO and ECAFE would continue to assist countries desirous of obtaining facilities for testing fibrous and auxiliary raw materials respectively for paper-making.
Technical and economic aspects of pulp and paper production
The Conference discussed on the basis of twenty-nine background papers and a Secretariat paper, many aspects of the technical and economic problems involved in pulp and paper manufacture. These papers presented the results of experience gained not only in the Far East but also in other areas of the world, both in highly developed industrial countries and in developing countries. They covered the various processes and equipment available for manufacture of pulp from wood, bamboo, bagasse, straw and other fibrous materials available in the area.
The discussion placed emphasis on the possibility of producing both groundwood-type pulps and high strength pulps from the raw materials available, having regard to the limited availability in the region' of coniferous woods from which these typos of pulps have been traditionally produced. It was pointed out that methods already exist for producing mechanical type pulps economically from certain short-fibred hardwoods and bagasse. Pure mechanical pulp and chemi-groundwood pulp, as well as cold soda mechanical type pulp, are already being produced in the area from certain hardwoods, and one mill is planned to use bagasse mechanical pulp. However, improvements in the methods of utilizing these raw materials are needed and more attention should be given to development work in this field.
As regards the production of high strength pulps, improvements in present processing methods are vital if a sufficient amount of this quality pulp is to be produced in the area. It was brought out that even in the case of bamboo, which is the predominant long-fibred raw material in the area, truly high strength pulps were not yet being produced. It was agreed that the preparation of the raw materials before digestion had an appreciable effect on the quality of the pulp and that better methods of removing extraneous components of the raw material both before and after digestion were desirable.
It was noted that in determining the utilization of these various short-fibred raw materials, consideration must be given to other properties of the fibre besides length. Cell wall thickness and presence of nonfibrous elements, for example, are factors in determining the usefulness of the material and the strength to be obtained. Research was needed on the possibility of separating out the fibres of superior length or strength by either mechanical means or by fractional digestion.
The matter of continuous versus batch digestion methods was discussed; the prevalent trend was toward continuous cooking methods of ever shorter duration, with emphasis upon proper impregnation of the raw material before digestion. Research to bring about faster and more thorough penetration of raw materials was urgently required.
It was noted that equipment for screening, washing, stock preparation as well as paper machines, are available which can be used to produce paper using a high proportion of short-fibred pulps. However, certain modifications might with advantage be made to handle new raw materials and efforts should be made to improve the design of equipment with these particular raw materials in mind.
The use of longer machine wires, high vacuum, transfer rolls between the wire and first press, improved press roll covers to reduce picking were mentioned as being helpful in handling short-fibred pulps.
The Conference agreed that the ratios of short-fibred to long-fibred material for over-all future pulp requirements assumed in the Secretariat paper were realistic as a basis for future planning to 1965 and 1975.
As regards longer-term fibre needs, steps should be taken to plant tree species which have the proper fibre characteristics to produce the best types of mechanical pulp and high strength pulp. Certain morphological characteristics can be used to suggest the probable pulping qualities of particular trees or species and close attention to these characteristics can serve to eliminate many species from consideration without extensive pulping tests.
Investigations for the selection of the most suitable species from mixed tropical forests with particular regard to their propagation, together with genetic studies, were needed to ensure a future supply of pulpwood with appropriate fibre characteristics.
Discussion next centered on the capital cost of new pulp and paper mills of various sizes. Figures furnished by different sources conflicted. Representatives of different countries in the region gave capital cost data based on mills already built or under construction which showed considerable divergence.
It was impossible to give estimates to cover all circumstances; accurate estimates must be made for each location after a thorough technical and economic investigation. For estimates of equipment costs from different sources to be comparable they must relate to the same specifications. The Conference recommended that the Secretariat collect and disseminate additional capital cost information including specifications for mills of various types and sizes, so that estimates furnished by suppliers in the various machinery supplying countries might be comparable. The Conference also invited FAO to bring up to date and re-issue the publication Raw materials for more paper (FAO Forestry and Forest Products Study No. 6).
Before embarking on any project, competent advice is needed. Such assistance and specialized knowledge can be obtained from a variety of sources: from existing mills, consulting engineering firms, individual consultants, machinery manufacturers or over-all contractors.
Questions of mechanization and labor productivity were discussed. It was pointed out that, in spite of comparatively low labor costs in the region, there are still important incentives toward mechanization and the highest possible productivity. It was noted that, where the question of employment opportunities was important, some sacrifice of labor productivity might be entailed. In any event, new industries should be given the opportunity to start with the most modem installations.
Newsprint
Discussing the special problems of newsprint supply and demand in the region, the Conference noted that in many countries present consumption is lower than it should be in relation to their levels of economic and cultural development. On the basis of material presented in a Secretariat paper and four background papers, the possibilities of satisfying the rapidly growing needs for this commodity, using indigenous and nonconventional fibrous raw materials were discussed.
The Conference considered that the demand estimates presented in the Secretariat were probably on the low side for many of the countries of the region. The aim of every country in the region should be to facilitate the spread of information at the lowest possible cost to the public. The Conference noted that in the developed countries this was to a large extent made possible by advertising revenues. In the less developed countries, however, such revenues were usually small, and the price of newsprint therefore had more effect on the final cost of the newspaper. In this context, the Conference observed that in many of the countries, current distribution methods tended unnecessarily to increase the cost of newsprint, especially to small publishers.
The question of characteristics desirable in newsprint was discussed, and the Conference agreed that these cannot be defined by minimum standards of specific properties. Acceptable standards may vary considerably, depending on the specific conditions under which the publisher is working and the printing equipment used, but quality should be uniform.
The Conference endorsed the view expressed in the Secretariat paper that pulping processes are today available which allow the economic production of groundwood-type pulps from a wide variety of broadleaved woods. These processes are now in commercial use for newsprint manufacture, both in the main paper producing regions of North America and Europe, as well as in some of the countries of the Far East. It was pointed out, however, that in most areas mixed tropical forests will not be an economic source of wood supply for such production, since in these forests the proportion of suitable species is usually low. The mangrove forests, which frequently contain a high percentage of light-colored, low-density species, are exceptions to this rule. The Conference concluded that - using wood as raw material the best economic results are likely to be obtained by establishing plantations of fast-growing species - coniferous and broadleaved - with suitable characteristics.
Discussing the possibilities of manufacturing newsprint from bagasse the Conference considered that such production is not economically and technically feasible if based primarily on the use of full chemical pulp. Views were expressed that to achieve acceptable economics of production and desirable paper characteristics, at least half of the fibre furnish must consist of mechanically produced pulp. There was considerable interest in the announcement that a newsprint mill using mechanical pulp from bagasse was under construction in India.
Discussing the economics of production, it was agreed that the economies of Scale were particularly pronounced in the case of newsprint manufacture. Newsprint mills established in these countries with daily capacities of less than 150 to 200 tons would be able to compete in price with imported newsprint only if operating under favorable conditions. The Conference therefore concluded that, in those countries where- the newsprint market is small, self-sufficiency in the supply of newsprint is not always a desirable aim. It was observed, however, that the economics of production may often be improved by integrating production with the manufacture of other paper grades; for instance, mechanical printings. The Conference recommended that the possibilities of establishing regional production centers, as recommended by the UNESCO meeting on the development of information media in Southeast Asia held in Bangkok in January 1960, should be fully explored.
The Conference stressed the importance of preinvestment studies in the case of newsprint projects. The heavy investments involved and the need to keep the price of the product at the lowest possible level require careful planning of the mills, including laboratory tests, mill trial runs of nonconventional raw materials, and economic feasibility studies to ensure that the most advantageous solution technically and economically is reached. It was also emphasized that the expansion of existing mills is generally a cheaper way to meet the growing demand than the establishment of new production facilities. This, again, underlines the desirability of a regional or subregional approach in planning.
Although the Conference concluded that fibrous raw materials for the production of newsprint could be made available at a reasonable cost to cover the estimated needs in the next 15 years, it stressed the importance of immediate planning for long-term future needs. The Conference recommended that governments of the region should investigate the possibilities of establishing plantations of fast-growing wood species suitable for the manufacture of newsprint in appropriate locations.
Collection and utilization of wastepaper
The recovery of waste paper could meet more than one quarter of the fibre furnish in the region and in fact nearly one third of this need in some countries.
The direct re-use of waste paper without processing for wrapping purposes, should not be encouraged because it was considered unhygienic, but it seems difficult for many countries to prevent this practice.
The development of local manufacture of cardboard might present suitable opportunities in these countries where there existed an adequate supply of waste paper.
The development of the production of special kinds of wrapping paper, specially coated with plastic, wax, etc., or faced with plastic and metal foils did not appear to be a great factor for lowering the recovery rate of waste paper, but it would be desirable to indicate clearly to the people engaged in the business of waste paper recovery that this kind of paper would have to be carefully sorted out during their collection, in order to avoid difficulties in pulping the waste paper recovered.
In the countries in which the paper and paperboard industry is at an early stage of development, a very simple classification of waste paper such as the following should be useful:
(a) trimmings from printing presses;
(b) trimmings from book binders;
(c) waste paper from government offices;
(d) old newspapers.
In the context of the conditions prevailing in the region the promotion of the hand-made paper industry merits consideration, particularly to provide part-time or full-time employment.
Such speciality grades as command good prices, possess artistic value and do not involve competition may receive particular attention. However no restriction should be imposed on the hand-made paper industry to limit its field.
In favorable situations and with improved technology it should also be free to make varieties corresponding to mill-made varieties. In suitable cases, governments may consider reserving certain varieties of production for the hand-made paper industry.
Governments should also assist by way of research, and by advancing funds. Direct subsidies were not considered essential, if technical advances were made on proper lines.
The tools and the techniques of operation should be rapidly improved. For this, free exchange of information was considered desirable, and the ECAFE Secretariat was requested to collect and disseminate information. The need for market research was also emphasized but no particular opinion was expressed about central pulping units.
Small-scale industrial pulp and paper production
There can be no hard and fast rule about the economic size of a small-scale mill. This will depend on local circumstances and the nature of the project, i.e., whether it is a pulp or paper or integrated mill.
Even in the industrialized countries, a large number of small pulp and paper mills exist. In most cases, these mills, which often comprise 80 percent of the total number, account only for some 10 to 25 percent of the production volume. Some small mills are still operating profitably without substantially changing their equipment or mode of operation, while other mills, when exposed to competition from larger units, have had to modernize or to switch to other products. On the other hand, a number have closed down. Against this historical background, the plans in several countries of the region for encouraging small-scale pulp and paper manufacture were discussed.
The following were favorable aspects of small-scale operations: utilization of local fibrous raw materials and reduction in transport charges; sale of final products locally with lower distribution costs, ready adjustment to local market requirements; adaptation to limited water supply; requirements for a smaller number of highly trained technical personnel and skilled labor; relatively small capital requirements; use of locally made machinery; geographical disposal of employment opportunities. In areas where there is no existing pulp or paper mill, a small-scale plant can often be the means of initiating such an industry. The quality need not necessarily suffer in a small-scale plant.
Market pulp production does not generally lend itself to small-scale operation. Speciality paper mills may or may not be integrated, whereas small wrapping paper and strawboard mills should normally be integrated units. In some instances considerable economic advantages may accrue from integration of a small paper unit with a larger pulp mill and even vice versa.
There were many technological developments which tend to make feasible and economic manufacture on a smaller scale than is at present considered desirable. Among these are a marked improvement in the avail. ability of suitable equipment, and the development of suitable processes. Research findings reported to the Conference indicated that further progress was in sight.
Small pulp and paper mills were particularly suited where raw materials were only available in limited quantities, especially such raw materials as straw, wastepaper, rags and grasses.
Of the several processes which can be used for pulping these raw materials, in principle, processes requiring only simple equipment and with low chemical consumption are to be preferred. Among methods with a low consumption of chemicals which need not be recovered was the bisulphite process. A reduction in the consumption of chemicals in rapid cycle Kraft processes might become feasible.
In most countries there is a need for both large and small units. Speciality papers, such as cigarette, electrical and currency papers are almost universally produced in relatively small units, as often are strawboards, tissues and a few other grades of paper and board for local consumption. On the other hand, commodities such as newsprint and certain Kraft papers produced from major raw material resources such as wood, bamboo and bagasse do not lend themselves economically to small-scale production. Some countries within the region are planning to produce a larger share of the total production in small units. While fully recognizing the several advantages offered by small-scale production, the Conference endorsed the principle that this should be regarded as a phase in the development of the industry. Consequently, some of the new small mills should be planned around raw material resources which were likely to remain limited, with the ultimate goal of producing, in these mills, speciality papers and certain boards. Other small mills should be designed from the outset to allow expansion at least to medium size as demand grows, and the development of a permanent supply of primary raw materials for a number of these mills should be planned.
The Conference concluded that among the prerequisites for successful small-scale operation were:
1. capital costs kept to a minimum by depending on purchased power and water and by simple disposal of spent liquors; public facilities for transport available as well as community facilities, such as housing for personnel;2. low raw material costs;
3. the availability of a local market to reduce transport and distribution costs.
Pulp and paper equipment manufacture
The Conference discussed the equipment needs of the region in different sectors of the paper industry large, medium and small-scale mills. It noted the program of procurement from outside sources initially and of manufacture within the region of the equipment needs for the development of this industry during the next 15 years. The design of equipment requires further studies from the point of view of the raw materials available and of the sizes of equipment desired for the region.
The Conference emphasized the possibility of manufacturing small units within some of the countries of the region, the possibility of improvements in design to suit the typical requirements of unconventional raw materials, and noted the supply potential of the equipment manufacturers within the region.
In certain industrially advanced countries, consulting and engineering concerns have formed groups to undertake special studies of equipment needs of the region.
The Conference was pleased to note the promise of co-operation extended by certain advanced countries outside the region in meeting these requirements and of assisting countries of the region in machinery manufacture.
The cost of equipment was likely to be above world prices to some extent in the early period of indigenous manufacture, but in due course the cost may even come down below that level. The Conference considered that the necessity of engineering services should not be underestimated. If necessary, the countries of the region could obtain these from advanced countries.
Because of lack of machinery manufacturing facilities in the region, paper mills faced delays in the procurement of spare parts and consumable mill supplies.
The Conference took note of ECAFE Resolution No. 31 (XVI) on regional economic co-operation for development of trade and industries, which urges countries in the region to co-operate with each other and jointly set up machinery manufacturing factories, and also urges countries outside the region to assist the countries in the region with know-how and capital for such factories. The Conference recommended that countries of the region, where circumstances warrant, should plan to manufacture pulp and paper machinery and mill stores, starting with simple items, in accordance with that resolution.
Development prospects and investment needs
The Conference reviewed the investments that would be needed up to 1975 to achieve an expansion in capacity sufficient to meet rising paper needs. The following figures were considered (over and above projects presently being implemented): for the region as a whole (excluding Mainland China): $4,500 million over the next 15 years, or roughly $200 million annually to 1965, and $350 million annually in the ensuing decade.
If the industrially developed areas (Oceania and Japan, where much of the expansion could be achieved through self-financing by existing industry) were to be excluded, the figures were: $75 million annually to 1965, and $95 million annually in the ensuing decade, making a total of $1,300 million to 1975. Foreign exchange requirements would account for about half the latter figures and thus correspond roughly to the value of one year's production from the total capacity expansion required.
The size of this expansion both warranted and required the early development of a pulp and paper equipment manufacturing industry in the region;- this is specially important in view of the fact that considerable amounts of foreign exchange will be required to import not only capital equipment but also recurring requirements of spare parts and consumable stores.
Statements by delegations made it clear that the limited availability of private domestic capital constituted an obstacle to achieving the required expansion in some, though not all, countries of the region. Most governments were taking steps to encourage private enterprise to enter this field, but it was evident that, given the key importance of adequate paper supplies to industrial and cultural progress, public enterprise would assume the initiative if private capital proved reluctant.
Nevertheless, the Conference believed that substantial participation by foreign capital would be required. International lending institutions and government-to-government loans could help greatly, but private equity capital from overseas had a special role to play. As a growing industry, pulp and paper offered a steady and expanding market; foreign capital could bring needed know-how and managerial skills, while helping to overcome any difficulties involved in a development that depended heavily on nonconventional. raw materials and new processes. Capital arising in this industry overseas and seeking new outlets could find remunerative avenues in supporting the development of pulp and paper industries in Asia and the Far East.
However, certain safeguards were necessary, on both sides, if a freer flow of capital was to occur; on the one hand, provision for transfer of dividends and repatriation of capital, etc., and on the other, patience, moderation, and genuine understanding of the problems which confront countries in the early stages of development. The Conference noted with great satisfaction the statements made on behalf of all the participating countries with established pulp and paper industries. These statements in all cases showed that the reasons compelling a rapid development of the industry inside the region were fully understood, and contained offers of help, including technical advice and training and research facilities. While the hope was expressed that foreign capital would be forthcoming on an increasing scale to supplement the region's own resources, and the desirable features of joint ventures were stressed, the Conference recognized that the major part of the expansion must rely on domestic capital.
The Conference noted that a mill promoter may either (a) develop the project himself, hiring his own personnel and purchasing his own equipment, making use of the services of a consulting engineer, or (b) collaborate with an experienced pulp and paper manufacturer, relying on the latter for technical advice and guidance, or (c) place a contract for the complete mill, or for the equipment only, with or without erection and supervision, frequently on a "package deal" basis. Arrangements (b) and (c) may provide for financial participation by the collaborator or contractor. In all cases the promoter must ensure that competent technical advice and arrangements for training local staff are included in the arrangement or are otherwise provided for.
Before capital could be attracted to specific projects, long and costly investigations were necessary, ranging from reconnaissance surveys followed by detailed inventories of the fibre resource, laboratory and pilot tests, studies of availability of power, water, chemicals, etc., to market surveys and feasibility studies for suitable mills in appropriate locations. While in some cases the entrepreneur might carry out these studies (to verify and extend existing information) the Conference recommended that governments should acquire their own basic data. This would help them to attract capital, to weigh the advantages of alternative projects, and to negotiate eventual projects on more equitable terms. This was particularly important in respect of fibre resources, since every government in the region had a responsibility for the conservation and proper management of these resources. The hope was expressed that the United Nations Special Fund would be able to assist governments in conducting these preinvestment surveys.
The Conference noted the importance of integrating development planning for pulp and paper with over-all development plans. Having regard to the considerable influence of infrastructural investment on the economics of pulp and paper manufacture, the Conference recommended that governments, when planning their basic investments in roads, railways, power, water, etc., should keep in mind the desirability of so orienting these investments as to ensure that fibre resources suitable for the establishment of pulp and paper mills could be brought within economic reach.
The various multilateral and bilateral technical assistance programs represented a significant inflow of capital - in the form of know-how, equipment, fellowship and training facilities - into the region. Many delegates suggested improvements that might enable these programs to contribute more effectively to the development of the pulp and paper industry in the region. A familiarity with and understanding of the problems of developing countries were the first essentials. and an appropriate representation of countries of the region on international staffs would be one means of achieving this.
Reviewing its earlier findings, the Conference confirmed that a general striving for national self-sufficiency in pulp and paper in the region would not represent an optimum utilization of the region's resources, and drew the attention of member governments in the region to the desirability of adopting a regional approach to this problem, notably in respect of newsprint production. The offer of ECAFE to assist in such joint projects, if the governments concerned so desired, was noted.
The Conference heard reports of national development plans for pulp and paper expansion, and noted that FAO had been charged with the task of studying capacity and demand trends on a world basis. Believing that development prospects in the Far East region should be kept under close and continuous review, the Conference invited ECAFE and UNESCO to collaborate with FAO in collecting, analyzing and disseminating this information, and in affording opportunities for periodic intercountry consultations.
Finally, the Conference expressed concern at the inadequate attention so far given to the conservation and creation of adequate fibre resources for longer-term needs, and invited governments of the region to give due weight to this aspect in developing their over-all land use plans and programs.
Customs and tariff policies
The Conference took note of the tariff levels affecting various categories of paper and board in certain countries of the region. While recognizing that the broad questions of tariff policy could not be considered within its sphere of competence, and that government policies in this matter could only be decided by the governments themselves in the light of national requirements and international obligations, the Conference drew attention to certain factors which should be home in mind if the desired increase in paper consumption and production and general industrial expansion were to be achieved.
(a) So long as countries are largely dependent on imports of paper to meet their domestic requirements, liberal tariff and trade policies should be adopted for those categories of paper considered most essential to national educational, cultural and industrial programs. Newsprint, book-paper and certain speciality industrial papers and boards were cited as examples.(b) The expansion of local manufacture would be facilitated by low tariffs on equipment.
(c) The viability of newly established operations depended on the low-tariff entry of the imported key production items, namely, chemicals, mill stores, and in some cases fibrous materials including pulp. A reasonable level of protection for the finished product might be necessary, but the interest of the consumer should not be overlooked.
(d) Any form of assistance to new industry, whether in the form of tariff policies, subsidies, tax exemptions, or in other ways, should always be accompanied by vigorous and continuous government scrutiny of operating and marketing costs.
The Conference stressed the importance of adequate and cheap supplies of paper for educational and economic development programs, and expressed the hope that governments would pay attention to this matter in formulating and revising their tariff policies.
J. C. W.
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The University "Francisco José de Caldas," Bogotá, Colombia, has awarded the title of Doctor Honoris Causa in Forestry Sciences to Egon Glesinger, Director of FAO's Forestry and Forest Products Division. This distinction comes from a country that occupies a leading position in South American forestry, due not only to the extent of its forest resources but also to its progress in the field of forestry education. The achievements cited in the University's official resolution indicates the extent to which the distinction conferred on Dr. Glesinger is a proof of Colombia's recognition of the role that FAO has played in furthering the progress of Latin-American forestry. |
