[ Last Event ]

 

Minutes of the ACCA 13th General Meeting
held onNovember 2005, Hotel Nikko, Kuala Lumpur , MALAYSIA

Mr Wang Shanchuan as Chairman of the Meeting welcomed all participants, and thanked the valued host Mr Soh Man Tong of MACCMA for his excellent reception accorded to all the Meeting participants. Mr Soh Man Tong, as Chairman of MACCMA extended his warm welcome to all present and expressed MACCMA's honour to host the ACCA 13 th General Meeting in KL.

 

Corrugated Industry Activities and Services

  1. Though the official Singapore GDP growth is 3.5 to 4.5%. Though the manufacturing sector reported optimistic growth but this is largely of the medical sub-sector. The remaining manufacturing sub-sector growth is only about 1.5%. Nevertheless the general demand for boxes increases 2 to 2.5% with optimism expressed for the next 6 months.

  2. MACCMA stated that the Malaysian GDP revised slightly downward to 5.1 to 5.2%. The total corrugated market remains about 800,000 mtpa. Even in the previous quarter, the industry has good demand growth largely due to the prevailing festive season, at present the corrugated industry still faced cost pressure which was difficult to pass on to customers owing to over supply situation. The latest news is the merger of the Thai Container Group and the Sime Rengo.

  3. Sri Lanka total corrugated market is only about 8000 mtpa with 30 to 35 industry players, all using single phase and hand pasting. Production is about 20 to 25% excess in capacity making it extremely difficult to pass on any increase in production cost.

  4. Philippines — it was reported there are about 40 corrugators with total capacity of 680,000 mtpa for a total market demand of about 500,000 mtpa. The country expected GDP growth this year is 5.5% largely in the food manufacturing and the beverage segments. Energy and sport drinks in the beverage segment were highlighted. The electronic segment remained stable. Overall, the corrugated industry is mature and stable with maintaining operating cost an industry challenge.

  5. Indonesia — reported that the country original GDP growth target of 8% has now been revised to 5.8%. Diesel as used in industrial boilers had increased by more than 300%. Wage is expected to increase by about 20%. Though box demand had increased by about 4% recently, but the capacity has increased 264,000 mtpa by 4 new factories and 2 extention of existing factories, while total increase in demand is only 100,000 mtpa. With the increase in diesel cost, it is expected many industry boilers would be converted to burning coal instead.

  6. HKCPMA reiterated that many of Hong Kong corrugated corporations had extended their operation to the various southern China provinces. Lately with the uncertainty of oil prices, many customers refused to accept orders. In addition, the current trade war between China and Europe had also adversely affected industry like the toy manufacturing. There is the anti-dumping duty targeting countries like USA , Taiwan and Thailand with talk of imposing 15 to 16% duty on paper import. Also, it would be difficult to pass on such increased paper cost to customers, thereby further narrowing the corrugated industry thin profit margin.

  7. Saudi Arabia — reported Saudi Arabia corrugated market faced a different challenge. Here, the industry is generally growing quickly as the country increased revenue from oil price increase resulted in 9% GDP growth. Consequently, the corrugated supply grew by 20% where the industry is already facing a 40% over-capacity. Private investors apparently are not concern about their return on investment. In general, the corrugated players are big and sophisticated. There are three very large corrugators, with the biggest having production capacity of 12,000 mtpa. Recently they reduced their box prices by 15% below the normal parice to capture market share.

  8. China — Since the popularised use of corrugated case in 1954, the industry had developed rapidly with volume of 16.5 billion sq m worthed 58 billion yuan in year 2004 to 18 billion sq m worthed 63 billion yuan in 2005. Advance manufacturing equipment were imported in the 1980s and 1990s from countries like Japan , Italy , USA , Germany and France . Today China has about 20,000 cardboard case factories located mainly in Guangdong Province , Yangtze River Delta, Beijing and Tianjin municipality.

 

There are four major development trends identified as follows:

  • large-scale paper mills are going down-stream to integrate with corrugated factories

  • large-scale corrugated factories are forming groups with each group having factories spread over various provinces

  • icorrugated machine increase speed (more than 250m per min.) and width (more than 2.5m)

  • lower grammage tendency made possible by advance manufacturing technology

 

There are two major challenges faced by the corrugated industry in China :

  • price of corrugated case had been dropping and is still continuing to drop

  • customers are demanding higher corrugated case quality particularly that of the printing aspect

 

Work Plan for Years 2005/2006

  • March/April 2006 ACCA 14 th General Meeting --- either at Dubai/Bahrain, Saudi Arabia or at Shenzhen , China

  • July/August 2006 ACCA 10 th AGM --- at Philippines by San Miguel Rengo

  • November 2006 ACCA 15 th General Meeting --- at Sri Lanka by Nisol

 

Any Other Matters 

it was proposed that Mr Gilbert Heydraud of Bobst HK Ltd as the Chairman of the Technical Sub-Committee for the same 2-year term duration as the ACCA Committee . The scope of the Technical sub-Committee should cover not just the coordination of technical seminars but also benchmarking survey such as sales technique, etc…

( back )