The largest paper manufacturer in Japan aims to more than double production of corrugated-cardboard materials in Malaysia by installing new equipment at the plant
Oji aims to start work next year and put the equipment into service in 2021, according to a report in the Nikkei Asian Review (NAR).
NAR reported that with the new investment, Oji would lift annual output capacity for cardboard materials in Malaysia from about 300,000 tons today to more than 750,000 tons. It now buys most of these materials from local companies.
Oji acquired GS Paper & Packaging, Malaysia’s largest corrugated cardboard processing company, in 2010. It now has 21 related bases in Southeast Asia and India.
With Japanese demand for printing and other paper steadily declining, Oji seeks to tap the growth of the Southeast Asian market. Overseas markets are expected to account for about 30% of Oji’s sales in fiscal 2017, a share it aims to eventually lift to 50%.
Prices are surging for used corrugated cardboard, which is often recycled into fresh corrugated cardboard.
In April, NAR reported that Japanese papermakers were boosting investment in Southeast Asia, betting big on the growth of the region’s corrugated cardboard market.
The industry, it said, was seeing a significant boom in Malaysia’s northern state of Penang, where aircraft equipment makers such as Honeywell International of the US operate. Local papermaker Ire-Tex produces 500 to 600 large corrugated cardboard boxes a day, which are used to transport aircraft parts and other heavy goods, according to NAR.
Corrugated cardboard is easier to handle than wood, which require pest control and takes time to break down.
NAR said Asia’s demand for corrugated cardboard was expected to jump 14% from 2016 to 87.04 million tons by 2021, according to US research company RISI.