Long Chen Paper Co (榮成紙業), which makes industrial paper, paper boards and corrugated container boxes, on Thursday said that it plans to add new facilities to its factories in Taiwan and China’s Hubei Province to ease the impact of Beijing’s ban on waste paper imports.
“The new facilities will increase the output at our Hubei unit by 300,000 tonnes next month,” Long Chen chief finance officer Danny Chou (鄒永芳) told an investors’ conference in Taipei.
The output of Long Chen’s low-carbon paper mill in Hubei reached 850,000 tonnes last year, he said.
The company also plans to buy a new paper-making machine with an annual output of 200,000 tonnes for its factory in Erlin, Changhua County, he said, adding that it would start operations in the fourth quarter of next year.
“We plan to maintain the output of the low-carbon paper mill in Taiwan at 850,000 tonnes per year by purchasing new equipment and upgrading a machine that has an annual output of 300,000 tonnes,” Chou said.
The company would retire a machine with an output of 100,000 tonnes that has been in service for more than 40 years, he said.
China generated 80 percent of the company’s sales last year, while Taiwan contributed the remaining 20 percent, Bloomberg data showed.
The company has three Chinese paper mills in Hubei, Jiansu and Zhejiang provinces that collected waste paper from 24 collection centers across China to make industrial paper, Chou said.
Another six centers are to be added, he said.
The company also has six eco-packaging plants in China for making container boxes, with two more plants under construction, he added.
Increasing the output of the Hubei factory is the company’s strategy to cut its dependence on foreign waste paper, which Beijing banned early last year along with more than 30 categories of solid waste due to environmental concerns.
Foreign waste papers remains favorable due to lower costs and better quality, Chou said.
As costs increased, Long Chen’s net income plunge 41.24 percent year-on-year to NT$156.94 million (US$4.96 million) last quarter following a loss of NT$21 million the previous quarter.
Earnings per share were NT$0.13.
“We tried to reduce the Hubei unit’s operating costs by collecting waste paper in eastern China, where the price was lower,” Chou said.
Gross last quarter margin improved modestly to 13.18 percent.
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