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.