Thailand's Largest Paper Producer Says It Won't Press for Anti-dumping Penalties

SCG Paper, Thailand's largest paper producer, on Aug. 31, 2011 reiterated it had no intention of erecting trade barriers against cheap foreign imports by asking the Commerce Ministry to impose anti-dumping duties on imports from five countries.

The unit of the Siam Cement Group, the nation's top industrial conglomerate, also signalled its readiness to meet with affected customers to find a solution to the contentious issue.

"What we want is fair competition. We've not thought of this in terms of barriers to trade," said marketing director Montree Mahaprukpong.

The Foreign Trade Department has begun an investigation into cheap coated paper from China, Indonesia, South Korea, Japan and Taiwan in response to a complaint by SCG Paper, which is also the leading paper producer in Southeast Asia.

However, the complaint prompted an unexpectedly robust reaction by local industrial paper consumers, who submitted a letter to the Commerce Ministry opposing the possibility of collecting anti-dumping duties.

The letter said such a move would affect all related industries and their exports.

"We have no intention of bullying our customers. If they cannot survive, then we will suffer the same fate," said Mr Montree.

"We are present internationally in markets such as Vietnam and the Philippines and are not afraid if they compete fairly."

Meanwhile, SCG Paper has introduced paper certified by the Forest Stewardship Council, starting with exports to Hong Kong and Australia.

The FSC, an independent organisation that promotes responsible management of the world's forests, has granted SCG Paper the first such certification in Thailand for its efforts to preserve forest land.

Mr Montree said FSC paper will make up 20% of the company's total annual production of 500,000 tonnes.

As well, 280,000 tonnes of FSC recycled paper will be rolled out or 23% of total annual capacity of 1.2 million tonnes.

Although petrol prices have decreased on lower contributions to the Oil Fund, Mr Montree predicted that paper prices are unlikely to fall, as raw materials, mainly pulp, and energy costs have surged.

Pulp prices have increased by US$100 a tonne this year to $900-950 for long-fibre and $650-700 for short-fibre pulp.

Energy costs have jumped due to higher coal prices.

The parent company is studying the possible effects from the government raising the daily minimum wage to 300 baht as promised.

Raw materials and energy account for most paper production costs, which now stands at 30,000 baht for a tonne of printing paper and 19,000 for kraft paper, said Mr Montree.

"The pump-price reductions may decrease our logistics costs, but I don't think they will push down paper prices," he added.