(News from RISI) – Asia Pulp & Paper (APP) has put the brakes on its aggressive tissue paper expansion plans after revisiting them in the wake of the economic slowdown in China.
An APP senior executive said: “We have decided to put the installation of all the machines that were previously planned to be carried out after 2015 in our original plan on ice for one year.”
Other planned PMs have been cancelled altogether due to poor demand or a lack of in-house pulp production, he added.
In the original blueprint laid out last year, the company intended to build a total of 52 new tissue machines at its mills in China and Indonesia, with a whopping combined capacity of 2.784 million tpy.
Some 12 out of the 52 PMs were smaller units to be supplied by APP’s subsidiary Jinshun Paper Machinery, each having a capacity of 27,000tpy.
The remaining 40 machines were large 5.6m wide units, which APP signed up for with A Celli.
APP has made down payments to the Italian supplier for a portion of those 60,000tpy machines.
The rest were to be delivered under what both sides called a handshake contract, which means the orders were not confirmed yet.
The plan has now been revised down significantly to 25 PMs with a total capacity of 1.236 million tpy.
Eight Jinshun machines initially planned for APP China’s Hainan mill will be kept on track and erected, with the first unit slated to come on stream in July, said the APP contact.
The remained four A Celli machines planned for the facility will be scrapped.
“We made an error believing there was a surplus of in-house pulp manufactured at the Hainan complex. It was a miscalculation. Its pulp and paper production will hit a balance after the eight tissue machines are commissioned,” he explained.
The number of PMs planned for APP China’s Suzhou facility has been slashed by half to six, all of them the larger units.
Two out of four large machines for the firm’s Xiaogan plant and all the rest of the units planned for other mills in China have been put on the backburner.
In Indonesia, where all the planned machines would be supplied by A Celli, APP has scaled back the expansion of its Perawang facility from 14 units to 8.
It will go ahead with the erection of a large PM at the Jambi site.
There is an A Celli PM in the original scheme for the Perawang plant coming online at the moment.
The machine, which features an 18-foot Steel Yankee dryer, is the first tissue production line of its kind commissioned in Asia.
“The PM has been operating smoothly since its trial runs early this year. It is running at speeds of 1,800-1,900m/min, while it has a design speed of 2,000m/min,” the contact said.
The successful startup of the machine was supposed to be a major event worth celebrating.
“We are not in the mood to celebrate it. But we are happy that the machine has performed well, with impressive energy efficiency,” he added.