Minutes of the ACCA 10 th Annual General Meeting held at Orchard Hotel, SINGAPORE

Mr Stanley Koo as President of CBMA welcomed all participants to Singapore for this Meeting and the CBMA 22 nd Anniversary cum Seventh Moon Festival Dinner, and wished everyone an enjoyable stay here.

Mr Wang Shanchuan as Chairman of the Meeting per se welcomed all participants, and thanked Mr Stanley Koo and CBMA for hosting the Meeting and inviting all participants to the CBMA 22 nd Anniversary Dinner.

Country of Corrugated Industry Activities and Services

China - Mr Wang Shanchuan stated there are 2 parts to his update:-

1. China general market situation: In first half of 2006, China GDP growth was 10.9%, while the local packaging industry growth was 7% in recent years. However, the corrugated industry growth reached 15% leading to supply exceeding demand. Hence, it is now identified that one of the major tasks facing the corrugated industry is to re-adjust the market structure so as to balance supply and demand.
   
2. CPF participation in ICCA: Though joined ICCA in 2002, CPF had not been active in ICCA activities until the recent change in CPF leadership who emphasises on cooperation with foreign and international packaging associations. In May 2006 with the message received from ICCA Chairman, Mr Kiyoshi Otsubo (Rengo Co Ltd), CPF was on the verge of sending representatives to the June 2006 ICCA meeting in Dublin when it was discovered the name of the Taiwan member association does not meet the Chinese Government requirement. The issue was eventually resolved at the recent ICCA board meeting when it was agreed to change it to Chinese Taipei. Consequently, Mr Shi Wanpeng, President of CPF on his coming October business trip to US will be meeting with Ms Heather Marshall, ICCA newly elected President to emphasis on the cooperation of CPF and ICCA.

Chinese Taipei - Mr Lin Kuo-Hung (CTCCA) referred to the report at the recently held CTCCA General Meeting for his update. The first half 2006 statistics showed Taiwan corrugated board production marginally declined by 0.36% to 941 million sq metres compared to the same period last year. Despite attempt made to stabilise end-product price, the overall market status is not satisfactory with dwindling market volume. Mr Lin proceeded to summaries his perceptions of the Japan and Europe markets following his recent visits to these countries. For the Japan corrugated industry market, he reckoned:

• Plants and facilities are constantly being renewed particularly in the area of environment protection with dust prevention, insect proofing, air conditioning, thereby making plants neat and less wastage
• Accelerated automation of plant equipment such as trolley, printing mold hanger and customer information and data retrieval system
• Strong stabilised selling price
• Thorough on-the-job-training system

As for the European market, he observed:

• Though efforts were made on plant renewal and automation, the results were not as sophisticated and evenly spread as in Japan
• Constant innovation in packaging design with improved value-add and higher selling price achieved
• Replace cardboard market with enhanced technologies as in the use of N flute followed after F flute generation

Overall conclusion is while Taiwan domestic corrugated market has stagnant, the overseas markets are improving especially in the packaging design aspect.

Hong Kong - Mr Lai Yau Fai reported there had not been any significant change since he last updated the market except a slight growth in business activity recently as is expected in this time of the year. Operating cost continued to increase at 15 to 20% pa resulted from energy and paper cost increases. Hence to meet this challenge, HKCPMA at a recent special meeting agreed to adjust higher by 8% the product price, and hopefully it will help to defray the higher operating cost to some degree. On paper supply, the two largest China suppliers continue to expand in capacity. Lee & Man Paper will increase production from 1.6 to 2.3 mtpa, while that of Nine Dragon will increase from 3.3 to 5.3 mtpa. There are much industry activities with many box plants moving into the cheaper production areas of inner China . The very competitive environment is made more difficult with the removal of duty for imported paper pulp into China , and also, the pressure from Europe anti-dumping regulation.

India - Mr Deepak Killawala reported that the country GDP is growing at 7 to 8% pa. Last month paper price went up by about 5%, while the box market remained generally stable and growing.

Indonesia - Mr Kinardo Ang stated that it was only in May that market demand had generally increased slightly since the country's 20% fuel subsidy removal last year. Besides the 2 new major corrugated plants, there are 3 more in the pipeline with perhaps a combined capacity of greater than 200,000 mtpa. Paper price had gone up by about 5 to 6%, and there are 2 new giant paper mills under construction with one already in trial operation. For the present, paper supply and demand is balanced until these 2 new plants start production.

Malaysia - Mr Ling Eng Kheat (MACCMA) reported that although the country GDP growth remained stable at 5.3% in the first quarter this year, but the manufacturing sector growth was limited. Thus, the corrugated industry continued to experience stagnant demand and low growth. The forecast growth for whole of this year is 0.9 million tpa, while ICCA forecast growth for the next three years was about 1%. Electricity tariff went up by 12% in June '06, and central bank OPR was up by 50 basis points since beginning this year. Corrugated players are being squeezed between suppliers and buyers. Petition for anti-dumping tariff by the local paper mills had been submitted to the Ministry of Trade, who is currently collecting feedback with expectation of an early September decision made for initial tariff from 8 to 70% to be implemented. MACCMA had just held a press conference to announce a 10% carton price increase.

Saudi Arab - Mr Atul Kaul reported that the country is in the midst of an aggressive economic growth of about 9% pa. Paper price had been in the up trend for about a year. Recycled paper price is not softening either. The net import of paper has now reached greater than 600,000 mtpa.

Singapore - Mr Stanley Koo stated that the local corrugated market remained largely flat with peak reached in June/July. The country first half '06 GDP growth was about 8.1% with manufacturing sector growing at 12%, and so he expressed hope that the corrugated industry will grow by about 3% for the full year.

Thailand - Mr Nat Pinitpongskul of TCG reported that the latest GDP growth forecast is 5 to 5.5% pa now that the political situation had settled down with new election planned for October 2006. In general, the economy had slowed down partly due to increase in industry operating cost as a result of cost increase in energy and bank interest rate. Also, the corrugated industry is facing fierce competition with increase in new production capacity. Since July, paper price increased by 5 to 7%. Hopefully, the corrugated carton market could muster a 4 to 5% growth for the year.

After the meeting we all joint the 22 nd Anniversary cum Seventh Moon Festival Dinner

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