The Thai Pulp and Paper Industries Association

Thailand’s Pulp & Paper Industry

The 34th Federation of ASEAN Pulp and Paper Industry Conference

November 1, 2019

by Mr. Pornchai Vittayakoonsakulchai

President of TPPIA

Topic

- Economic Outlook

- Pulp and Paper Industry Outlook

- Challenges for Thai Pulp and Paper

Industry

Economic Growth - Tourism, Investment and Spending from both Government & Private Sectors

are key drivers of Thai economic growth in 2019.

Source: NESDB, EIC analysis based on data from CEIC, NESDB, BOT and MOC

4.0 3.0

0.1

2.9

-1.2

9.5

13.2

0.7

4.1 4.6

1.8 3.9 3.3

7.5

13.7

1.1 3.2 4.2

2.2 3.7 4.0

-1.2 -1.6

1.2

-5

0

5

10

15

20

GDP Private

Con.

Government

Con.

Private

Invest.

Government

Invest.

Export Import Inflation

%

2017 2018 2019F

Thailand GDP growth by components

Supporting Factors Risk Factors

Population in 2018 66.41 million

The Eastern Economic Corridor (EEC) - Government approved 5 large infrastructure projects in EEC area, worth

THB 695 billion in total, thus help boost both public and private investment.

Source: The Eastern Economic Corridor Office of Thailand

10 keys industries identified as new-growth engines and promoted in EEC area

The Next-Generation Automotive

Industry

The Intelligent Electronics

Industry

The Advance Agriculture and Biotechnology

The Food Processing

Industry

High Wealth and Medical Tourism

Industries

Digital Industry The Robotics Industry

Aviation and Logistics Industry

Comprehensive Healthcare

Industry

Biofuel and Biochemical

Industries

Topic

- Economic Outlook

- Pulp and Paper Industry Outlook

- Challenges for Thai Pulp and Paper

Industry

1,329 1,426 1,425

1,343 1,330

1,529 1,580 1,688 1,665 1,672

0

500

1,000

1,500

2,000

2015 2016 2017 2018 2019F

Capacity Consumption

Utilization 85% 82% 86% 95% 99%

Pulp Capacity & Consumption - Pulp in Thailand mainly derives from Eucalyptus

- Slow growth in pulp demand; less than +2% per annum

(‘000 Tons)

Source: The Thai Pulp and Paper Industries Association (TPPIA)

11,863 12,249 12,523 12,090 12,600

7,680 8,100 8,400 8,590 8,800

0

5,000

10,000

15,000

2015 2016 2017 2018 2019F

Supply Consumption

Export (million tons) 4.18 4.15 4.12 3.50 3.80

(‘000 Green Tons)

Eucalyptus Wood Supply & Consumption - Eucalyptus Wood Supply 12 million tons per year

- Consumption 9 million tons, with growth +2% per annum

Source: The Thai Pulp and Paper Industries Association (TPPIA)

5,749 5,783 5,903 5,784 5,816

4,296 4,286 4,676

4,447 4,524

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2015 2016 2017 2018 2019F

Capacity Consumption

Utilization 84% 86% 88% 88% 89%

Paper Capacity & Consumption - Capacity 5.8 million tons; Consumption 4.5 million tons

- Growth +3% per annum for packaging paper

(‘000 Tons)

Source: The Thai Pulp and Paper Industries Association (TPPIA)

Containerboard 62% Printing & Writing

Paper 20%

Paperboard 12%

Newsprint 3% Sanitary 3%

Paper Consumption by Category - Paper for industrial use accounted for 74% of total demand

- Trend of application for food container e.g. street food, food delivery

Paper consumption per capita in 2018 = 67 kg. Total consumption in 2018 = 4.4 million tons

Source: The Thai Pulp and Paper Industries Association (TPPIA)

3,415 3,500 3,641 3,557 3,583

2,589 2,662 2,747 2,761 2,844

0

1,000

2,000

3,000

4,000

2015 2016 2017 2018 2019F

Capacity ConsumptionContainerboard (‘000 ton)

1,551 1,468 1,437 1,410 1,411

924 875

1,156 914 896

0

500

1,000

1,500

2,000

2015 2016 2017 2018 2019F

Capacity ConsumptionPrinting & Writing (‘000 ton)

508 539 539 539 542 505 492 513 526 542

0

200

400

600

800

2015 2016 2017 2018 2019F

Capacity ConsumptionPaperboard (‘000 ton)

2,673 2,678 2,758 2,841 2,926

3,763 3,715

4,168 4,045 4,167

0

1,000

2,000

3,000

4,000

5,000

2015 2016 2017 2018 2019F

Domestic Collection Consumption

Recovery Rate 62% 62% 59% 64% 65%

Recovered Paper Consumption - Imported RCP represents 33% of the consumption (1.4 million tons)

- Consumption growth rate +3% per annum

(‘000 Tons)

Source: The Thai Pulp and Paper Industries Association (TPPIA)

Topic

- Economic Outlook

- Pulp and Paper Industry Outlook

- Challenges for Thai Pulp and Paper

Industry

Global Challenge - All industries move towards Sustainable Development Goals.

- Climate issue appears to be the most impactful SDG.

Source: WBCSD, Responsible Business Trends Report 2019

National Policies and Plans - Climate change mitigation has been incorporated into National

Development Plans.

(Industrial Process & Product Use)

Source: Office of Natural Resources and Environment Policy and Planning, Thailand

“THAILAND INTENDS TO REDUCE GREENHOUSE GAS EMISSIONS BY 20% FROM BAU (business-as-usual) LEVEL BY 2030”

Thailand's Nationally Determined Contribution Roadmap on Mitigation

Challenges to Industry - The industry will encounter more stringent regulations and measures

against global warming.

Development and certification of environmental products; environmental friendly labeling

Stringent supervision and law enforcement; more supervision on imports of recycled materials, increase efficiency of waste disposal and waste treatment

Economic mechanisms and social measures for pollution management system

CHALLENGES TO INDUSTRIES

Energy & Transport • Increase power generation

efficiency • Energy efficiency in

buildings/ households • Energy efficiency in

transport • Renewable energy

generation • Promote biofuels etc.

Waste • Waste reduction • Municipal wastewater

management • Industrial wastewater

management etc.

Industrial Process & Product Use

Action Plan for Roadmap on Mitigation

In Conclusion

• To stay competitive, Industry has to foresee the impacts from changes, be resilient and adaptive.

• Embracing circular economy concept into action across the industry’s value chain will contribute to a long term growth and sustainable development.

• Cooperation will be key to making the circular economy a reality.

Thank You