Siam Pulp and Paper Plc is keen to invest in a packaging-paper and corrugated-container plant in Vietnam to serve rising demand in both countries.

Company president Chaovalit Ekabut said a feasibility study had determined that Vietnam could support such a plant with a production capacity of 100,000 tonnes a year. At that size, the investment cost would be Bt2 billion-Bt3 billion.

If proceeded with, the facility will be the first overseas plant by Siam Pulp and Paper.

Chaovalit said demand for packaging paper in Vietnam had been increasing at the same rate as general economic growth, at 7 per cent to 8 per cent annually. Economic growth in Ho Chi Minh City alone is thought to be as high as 20 per cent per annum.

Siam Pulp and Paper Plc, a holding firm for the paper and packaging operations of the country's largest conglomerate, Siam Cement Group, makes pulp, printing and writing paper, and packaging paper and corrugated containers.

The company says it is the industry leader in Thailand and Asean.

Chaovalit said the company would have to study Vietnam's laws and regulations on investments in greater detail before making any decision. "This is because the company has to hold a majority control of not less than 51 per cent following its investment policy in the region," he said.

He added that the expansion of the company's packaging-paper plant in Kanchanaburi and the construction of a craft-paper plant in Khon Kaen were still proceeding. The plant in Khon Kaen is costing Bt6 billion with a production capacity of Bt160,000 tonnes a year. The two facilities will be completed next year.

Apart from manufacturing expansion, the company has implemented the "SCG: Power of Innovation" concept, focusing on growth with innovation.

Siam Pulp and Paper is developing new products, such as green reading paper, which is easy on the eyes, seven-layered triple wall-sheet board, and full-service package design.

In the first quarter SCG's paper business posted Bt10.77 billion in sales, up 9 per cent from last year, due to higher demand, but net profit was down 12 per cent on year as a result of the higher costs of fuel and materials.

Chaovalit said the Ministry of Finance's reduction of import tariffs on machines in the printing industry had helped upstream manufacturers stay competitive.

He added that while import tariffs on machinery had fallen to between zero and 5 per cent, the tariff on machine parts remained 20 per cent.

"The Finance Ministry should consider that too," he said.

Siam Pulp and Paper's parent Siam Cement, handles petrochemicals, cement, building products, logistics, and other businesses.

Watcharapong Thongrung

The Nation