NTPM expanding tissue paper plants

Raising output: NTPM’s plant in Nibong Tebal. The group’s key focus for 2018 will be to increase the production of tissue paper in order to fulfil the rising demand in South-East Asia and other export markets.

NIBONG TEBAL: Tissue and personal care products manufacturer NTPM Holdings Bhd is allocating US$25mil (RM104.9mil) for the expansion of its tissue paper plants in Penang and Vietnam over the next two to three years.

Group managing director Lee See Jin said the expansion would increase the group’s production capacity to 170,000 tonnes per year by end-2018 from 110,000 tonnes currently.

NTPM has three tissue manufacturing plants in Penang, Pahang and Ho Chi Minh as well as subsidiaries in Malaysia, Singapore, Vietnam and Thailand to distribute its products.

“The bulk of the expenditure will be to increase the production capacity of our plant in Ho Chi Minh to 50,000 tonnes a year from 10,000 tonnes presently,” Lee told StarBiz.

The Vietnam plant is currently 30% utilised.

“We will also use US$10mil to add another production line in Penang, which will raise our output to 120,000 tonnes per year from 100,000 tonnes,” he added.

According to Lee, Vietnam holds a lot of potential, given its increasing consumption of tissue paper per capita. Over the next three to five years, consumption is expected to grow to 3kg per capita a year from 1.4kg per capita currently.

On its Vietnam plant, Lee said the maximum production capacity is 800 tonnes per month while the actual output is about 400 tonnes per month presently.

The group, which started operations in Vietnam in May 2015, has managed to generate total revenue of RM13.6mil for the financial year 2017.

“Due to the increase in pulp prices, we have to raise the selling price for our tissue products by 3% to 5%,” added Lee.

He noted that the key focus for 2018 would be to increase the production of tissue paper in order to fulfil the rising demand in South-East Asia and other export markets.

Pulp prices have increased to around US$700 per tonne this year from US$500 year ago.

Lee expects the group to achieve a strong single-digit percentage growth in sales and bottom line for the fiscal year ending April 30, 2018.

NTPM’s core business in manufacturing tissue paper and personal care products generated 69% and 31% of the group’s revenue, respectively.

“The growth of the personal care segment for the financial year ended April 30, 2017 was driven by the lowering of overall manufacturing cost and the increase in sales of baby diapers,” Lee said.

He added that the group is optimistic on its outlook for fiscal year 2018. “With well-established product offerings, supported by comprehensive distribution and marketing channels, the group foresees that it will continue to grow organically in its existing markets,” he added.