APP TO BE NO 5 GLOBAL TISSUE SUPPLIER (NEWS BY RISI)
By Brad Kalil, Director of Tissue,

Asia Pulp and Paper, a subsidiary of the Indonesian Sinar Mas Group, is on a very aggressive expansion course with its tissue business plan. The company is, however, very quiet about details or the exact timing of startups of its new machines. Nevertheless, in this short article we will make our best effort to provide some insight into its whole expansion scheme.

After the astonishing order of 10 tissue paper machines with ACelli in early 2006 for APP's Hainan mill in China and the Lontar Jambi mill in Indonesia, the next surprise was the order for as many as 30 tissue machine headboxes with Polish supplier, PMP Group, in autumn 2006. Around the same time, it also became evident that APP had established a mechanical workshop, Jin Shun, in Dagang, Jiangsu province, close to its large fine paper mill, to assemble paper machines based on both Chinese and imported components.



Also in 2006, APP decided to gain experience with Chinese-made tissue machines by ordering four machines from Henan Jiauzuo Chongyi Light Industry Machinery, and somewhat later, two machines from another Chinese supplier, Jiangsu Huadong Paper- Making Machinery. These six machines were installed at APP China's Jiangsu Gold Hongye Paper mill and are already in operation.

It appears that APP was gathering experience and knowhow of tissue paper machine technology from both foreign and Chinese suppliers, and it is now making efforts to combine this knowledge into a package which should enable it to manufacture tissuemachines at a lower investment cost without suffering too much in terms of speed and capacity.

So let's look into the tissue machine developments at the three largest APP tissue facilities.

Hainan expands

APP decided to integrate the Hainan hardwood pulp mill with papermaking and build both fine paper capacity and tissue machines at the site. For tissue, APP is operating two legally separate companies: Hainan Gold Hongye Paper, which runs the six A Celli paper machines, and Hainan Gold Shengpu Paper, which will run the self-made paper machines assembled by the subsidiary, Jin Shun.

Hainan Gold Hongye Paper has already started up four of the six A Celli paper machines, and the two remaining paper machines for the Hainan mill were expected to be operational by the end of June 2008. Each of the six paper machines has a capacity of 28,000 tons/yr.

Hainan Gold Shengpu Paper is erecting six 18,000-20,000 ton/yr tissue machines at the plant.These machines are manufactured/ assembled by the APP China subsidiary, Jin Shun. They include some critical components which are manufactured abroad, such as PMPoland headboxes and Andritz Yankee hoods. All six units were expected to come on line by the end of June 2008. The aim is to let Jin Shun supply another 12 tissue machines to the plant by the end of 2009, if the first six run smoothly.

Suzhou start-ups

APP China's subsidiary, Jiangsu Gold Hongye Paper, started trial runs on two 12,000 ton/yr tissue machines at its mill in Suzhou City, Jiangsu province, in late February 2008. We understand that these paper machines are now running, although we have yet to receive official confirmation.

Both machines provided by Chinese supplier, Jiangsu Huadong Paper-Making Machinery will focus on making lower quality tissue rolls for products such as hand towels and napkins.

The Suzhou plant already houses two larger 60,000 ton/yr Andritz units, which make higherquality, lighter-weight paper for facial tissue, as well as four Henan Jiaozuo Chongyi Light Industry 10,000 ton/yr paper machines, which manufacture low quality grades. The start-up of the two machines will take the facility's total capacity from 160,000 to 184,000 tons/yr.

The 10-machine order with A.Celli also included four paper machines with slightly narrower trim and smaller capacity (26,000 tons/yr each instead of the 28,000 tons of the Hainan paper machines) for APP's 80%-owned subsidiary, PT Lontar Papyrus Pulp and Paper Industry, in Jambi, Sumatra. The suppliers for the yankee cylinders and hoods were the same as for the Hainan machines, PMT Industries and Novimpianti, respectively.

The Jambi mill already operates an Andritz paper machine with a capacity of 60,000 tons/yr, which started up in 1998. The first two of the new A.Celli machines started up in the third quarter of 2007. The second pair of machines was delivered in late 2007 and the start-ups followed in March and April 2008.

Million tons

APP plans to add 12 additional 18,000 ton/yr machines at the Hainan mill, resulting in 216,000 tons/yr of additional capacity by the end of 2009, if the plan is realised. In addition, there are rumours that the company's Indonesian mill, Pindo Deli, could also receive some of the self-assembled tissue paper machines. Even after the completion of the planned Hainan expansion, APP would still have 12 headboxes left from the PMP Group order for additional expansion. In March 2008, PMPoland had reportedly shipped 14 of the 30 ordered headboxes to APP. It is very likely that some paper machines will also be built in Indonesia. However, at the time of writing, we did not have any confirmation of this assumption.

APP has recently passed several companies in the global tissue capacity ranking, the latest ones being Kruger, Metsä Tissue and the Sofidel Group. It currently ranks fifth in worldwide tissue capacity. APP's North American subsidiary, Solaris Paper Inc, may also plan either an acquisition or mill construction to feed the converting plants in the USA.

The next company in the global ranking is Procter & Gamble with some 1.4 million tons/yr of tissue capacity, which is attainable for APP in the next few years. But the three largest companies, Georgia-Pacific, Kimberly-Clark and SCA, are clearly ahead, and vying for their positions would necessitate enormous investments and superior marketing skills from APP.


CHINA
VINDA UNVEILS TISSUE EXPANSION
(NEWS BY RISI)

Chinese tissue producer Vinda International Holdings has revealed plans to add four machines with a combined capacity of 80,000 tons/yr at its mills in China.

The Hong Kong-listed firm, in which Swedish group SCA owns 19%, has ordered two 20,000 ton/yr BF-12-type tissue machines from Japan's Kawanoe Zoki for a greenfield plant in Longyou, Quzhou city, Zhejiang province.

Installation work for the first unit is expected to start early next month, with startup scheduled for October. The second PM will be erected in October and come on stream in December.

The company also plans to expand its mill in Jiangmen City, Guangdong, by installing two 20,000 ton/yr tissue machines there. A spokesman said these two PMs are likely to be supplied by Kawanoe Zoki as well. The firm is in negotiations with the supplier and a deal is expected by the end of this month. Startup of these two units is expected in November and May, respectively.

SUCCESS FOR KAWANOE ZOKI IN CHINA
(NEWS BY RISI)

Chinese tissue producers Shanghai Dongguan Paper and Guangdong Zhongshan Paper have both ordered new tissue machines from Japanese supplier Kawanoe Zoki.

Shanghai Dongguan has ordered a 20,000 ton/yr tissue machine for its mill in Pudong, Shanghai. Start-up is scheduled for early next year. The BF-12EX-type machine will have a width of 3.4 m and a design speed of 1000 m/min. The PM is due to be delivered to the site in November.

Shanghai Dongguan already has four Kawanoe Zoki BF-10 tissue machines at the facility. Each of the units has a capacity of 10,000 tons/yr.

Guangdong Zhongshun Paper has placed orders with the Japanese supplier for two 10,000 ton/yr BF-10EX tissue machines. The units will each have a width of 2.76 m and a design speed of 770 m/min. One PM will be erected at the Chinese firm's mill in Xiaogan City, Hubei province, with start-up scheduled for the end of this year.

Another unit is planned for a potential greenfield mill in Tangshan city, Hebei province, or another site the company is evaluating in the area.

Last year, Zhejiang Zhongshun Paper, a subsidiary of Guangdong Zhangshan, started up the first tissue machine at its greenfield mill in Jiaxing city, in China's Zhejiang province. The unit, a 10,000 ton/yr BF-10 type PM supplied by Kawanoe Zoki, has a width of 2.66 m and a design speed of 800 m/min.

NANNING PHOENIX TO START TISSUE PM
(NEWS BY RISI)

China's Nanning Phoenix Pulp & Paper is poised to bring a 20,000 ton/yr tissue paper machine online at its mill in Nanning city, Guangxi province.

The BF-12-type PM has been supplied by Japan's Kawanoe Zoki. The unit has a width of 3.4 m and a design speed of 1,000 m/min. The plant already houses a BF-10 tissue paper machine with a capacity of 10,000 tons/yr, provided by the same Japanese manufacturer, and 11 small tissue PMs with a combined capacity of 15,000 tons/yr.

Nanning Phoenix also operates a 100,000 tonne/yr bleached softwood kraft pulp line at the facility. Some of its output is channeled to the mill's tissue machines, while the balance is sold on the domestic market.

Woodchips to feed the pulp line are harvested from the company's own masson pine plantations nearby and purchased from the market.

INDIA
CENTURY SET TO TEST NEW TISSUE PM
(NEWS BY RISI)

Century Pulp & Paper is gearing up to bring a new tissue machine online at a greenfield facility next to its Lalkua plant in Uttaranchal, India.

The firm aims to start trial runs on the machine in late September or early October, with commercial production to follow within a month. The Metso Paper-supplied PM will have a trim width of 2.85 m and an operating speed of 2000 m/min. It will produce up to 120 tons/day of paper from baled pulp. The total cost of the project is Rupee 1750 million ($40 million).