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31 Jan 2011


Thai Paper Industry, 2011: Bright Future Ahead (Business Brief No.3033)

In 2011, the paper industry at home should continue growth. KResearch views that domestic demand for paper in 2011 will likely be around 3.65-3.75 million tons, rising around 5-7 percent YoY. Kraft and printing paper will likely play a large role in driving overall sales at home, thanks to an improving economic situation and growing demand in related businesses that use paper as a raw material, particularly for packaging and printed media. In addition, there are some key boosts likely coming from environmental concerns that will help increase the popularity of paper-based packaging, general elections scheduled to take place in 2011, government initiatives involving campaigns to promote reading, tax incentives to encourage reading habit and measures to promote Thailand as a ‘printing hub' of Asia, which would increase domestic demand for paper.
One interesting paper-based product category that will likely have a bright future would be sanitary paper. Its sales will likely grow further because it is used by the household and service sectors, such as at restaurants, hotels and hospitals.
However, the paper industry may face some risks from higher production costs as well as an emerging trend of e-documents and e-books that may affect domestic demand for paper, particularly for printing paper. Manufacturers should adjust to minimize production costs through improved production efficiency to reduce the energy and footprints for lower costs of environmental management, better environmental ratings and reduced pollution arising from manufacturing.

It is expected that paper in the international market will likely grow. Thailand should have opportunities to expand into export markets for printing, kraft and sanitary papers, and we will be likely expand imports as well, such as for printing and kraft papers. Mostly, we will import high-quality paper to serve specific needs as well as low-cost paper from China and Indonesia. Our imports from those two countries will benefit from FTA tax reductions. In addition, imports of sanitary products and hardboard will likely be significant in 2011.