Paper producer's loss set to turn around
Paper producer's loss set to turn around
SINGAPORE (AFP): Pulp and paper producer Asia Pacific
Resources International Holdings Ltd. (APRIL) yesterday forecast
improving market conditions after reporting a third-quarter loss.
APRIL, with its corporate offices in Singapore, said it had
taken a net loss of US$8.84 million in the three months to
September, compared with a profit of $15.2 million in the same
period of 1995.
The Indonesian-owned group blamed the loss on a slump in world
prices of pulp and rayon fibre besides higher interest charges.
Net sales in the third quarter fell to $92.8 million, a 32-
percent year-on-year drop.
A company spokeswoman said the loss was due to rising pulp
inventories in the paper market that was not specific to the
firm.
Last year, the company benefited from strong pulp and paper
prices which have retreated this year with leading mills stepping
up production.
APRIL's losses for January-September mounted to $55.9 million,
compared to a net profit of $36.4 million in the first nine
months of 1995.
"Notwithstanding the above, the downward trend of the pulp
cycle seems to have bottomed," the New-York listed company said
in a statement.
Berry Kwock, APRIL's group finance director, said:
"Benefiting from the inventory corrections seen during the end of
the second quarter, the third quarter showed a marked improvement
in realized pulp prices over the previous quarter.
"We believe this price trend improvement will continue into
next year, except that in the short interim period, price
fluctuations related to inventory corrections are anticipated."
The average realized blended pulp price was $446 a ton during
the third quarter, down from $835 in the same period of 1995. The
average realized price of rayon fibre declined to $1,701 from
$2,191.
Pulp prices
Pulp prices, however, improved from $359 a ton in the second
quarter while rayon fibre prices have now stabilized.
APRIL, which exports its products mainly to Asia Pacific
markets, controls two major companies in Indonesia, with a 61.3-
percent ownership of P.T. Inti Indorayon Utama and a 98.9-percent
stake in P.T. Riau Andalan Pulp and Paper.
Its major markets include South Korea, Japan, China, Taiwan,
Vietnam, Hong Kong, Thailand, Malaysia and Singapore. It also
exports to Europe and America.
The company is studying the feasibility of increasing the
production capacity of its Riau pulp mill, expanding its Riau
paper mill and is engaged in the construction of paper and
paperboard mills in China at a cost of 500 million dollars.