Cheng Loong Corp (正隆紙業), the nation’s biggest industrial papermaker, yesterday said it plans to increase product prices for next year’s shipments by between 12 percent and 15 percent, or NT$1,500 (US$46.43) per tonne, to reflect rising material and transportation costs.
The price hikes would be the company’s first price increases since 2010.
“We feel mounting pressure to make profits this year, primarily due to soaring prices of wastepaper in global markets and related transportation fees,” an investor relations official said by telephone yesterday, citing wastepaper as the most crucial material for papermakers to generate paper pulp.
Nearly 30 percent of the company’s wastepaper is sourced from Taiwan, while the remainder comes areas such as the US, Japan and Europe.
Wastepaper prices have this year soared 30 percent annually to US$225 per tonne in the US, Cheng Loong said in a statement.
“Our Chinese rivals have raised their prices for industrial paper products by 33 percent annually to reflect material and labor costs,” the official said.
The company said it would consider further raising prices next year, depending on global price trends for wastepaper.
Regarding the company’s plans for next year, the official said that Cheng Loong would focus on capacity expansion in Vietnam.
Earlier this month, the company took out a NT$6 billion syndicated loan led by Hua Nan Commercial Bank (華南銀行) to finance capacity expansion, which includes building a new paper plant in Vietnam.
The New Taipei City-based papermaker operates three carton-making plants in Vietnam.
A new plant in Vietnam is scheduled to begin operations in 2018, in a bid to develop a complete supply chain in Southeast Asia, Cheng Loong said, adding that the facility would have an installed capacity of 300,000 tonnes per year.
The new plant would remove the company’s need to transport paper from Taiwan to manufacture cartons, which would save on costs, the official said.
Cheng Loong also plans to establish two more carton factories in the next two years to meet robust demand in the Vietnamese market.
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