Paper manufacturer's report shows marked sales increase

Published: February 01, 1996, By Wolpert, Vladimir

During the first half of 1995, AssiDoman, Forestry and Paper Group, had a turnover of SKr 11.3 billion, an increase of 39% over the SKr 8.1 billion during the same period in 1994.

Their half-year report for January through June of 1995 refers to the following acquisitions:

"In April 1995 AssiDoman Packaging and the Dutch company KNP BT agreed to split up the Dutch corrugated board company Empee, in which Packaging owned a 40% interest, the consequence of which is that Packaging acquired full ownership of Empee Eindhoven BV with effect from May 1, 1995.

"As of January 1, 1995, AssiDoman Kraft Products includes the packaging papers business acquired from MoDo. This unit owns paper mills in Skarblacka and sack factories in Germany and Great Britain. Kraft Products' pulp mill in Vallvik was sold to Rottneros Bruk AB with effect from January 1, 1995.

"As of January 1, AssiDoman Kraft Products has acquired one sack manufacturing company in Great Britain and another in Sweden from STORA. The division also took over sales of STORA's unbleached sack paper, production of which will be discontinued in 1996."

In addition, the report states that since June 30, 1995, AssiDoman has acquired 12% of the shares in a listed Czech paper and pulp company, Sepap AS, and approximately 22% of the shares in its associate company, Sepap Steti AS. It also shows an industrial alliance via AssiDoman Kraft Products. According to the report, AssiDoman's goal is to increase its interest in these companies. Sepap produces mainly sack paper (about 90,000 tons) and paper sacks (about 140 million) as well as bleached market pulp, newsprint, kraft liner, test liner, MG paper, and cartonboard. Annual sales amount to approximately SKr 2.2 billion.

The acquisition will enable AssiDoman to strengthen its market position within western Europe, primarily in sack paper and sacks but also in corrugated board materials. The group will also gain access to new growth markets in eastern Europe, while Sepap will gain access to AssiDoman's marketing organization and its technical expertise. Jointly, the companies can coordinate, and thus improve, efficiency at their respective mills and sack companies.

Since the end of the period, AssiDoman has acquired Cartiera dell'Ania, an Italian company that owns a recycled fiber-based fluting and liner mill. With annual sales of SKr 500 million, Cartiera's production capacity is about 135,000 tons. The acquisition will strengthen AssiDoman's market position and marks the first step in the process of integration toward recycled fiber-based paper production in Europe. This is a strategically important complement to AssiDoman's principal focus on products based on virgin fiber.

Asian markets - M&Y Air Systems Limited, England, reports "continued rapid growth in demand for all grades of paper and board in Thailand, creating the conditions for a surge in investment and a boom in prices. In the last five years, capacity has almost tripled to nearly 2.5 million tons. A further 1-million-ton project boost is expected in the next few years."

M&Y has reportedly had substantial orders from the Far East in the last 12 months for trim-handling equipment. David Wilson, the company's sales and marketing director, singled out Indonesia for special mention, saying that an order among the largest in 1995 had come from Indonesia.

Recent developments indicate that although Thailand is a relatively small producer compared to Indonesia, the country is investing heavily in the pulp and paper industry. With that in mind, M&Y is working with C.L. International Co. Ltd., Bangkok, Thailand, for their mutual benefit.

An indication of improved market conditions in Thailand is demonstrated by the fact that, while in 1994 only one major project was announced, in 1995 at least six new paper machines are being ordered. The Thai paper and board industries remain confident that the high quality of new machinery now being installed will put them in a more competitive position in other Far Eastern markets, should the home market prove too small.

M&Y officials say their order book for trim-handling systems, material discharge units, and other waste-handling equipment showed an increase of 50% in the last six months of the company's financial year, compared with the corresponding period last year.