After buying Pan Asia Paper Co Ltd, Norway-based Norske Skog, a newsprint producer, will spend up to US$10 million (Bt375 million) to improve its paper mill facility in Thailand, including upgrading the IT system.

Anders Nordin, managing director of Norske Skog (Thailand) Ltd, said that the acquisition was a significant step not only for Norske Skog but for the global paper industry. There will be no layoffs following the acquisition.

He said that Norske Skog late last year acquired the remaining 50 per cent of Pan Asia Paper Group from its Canadian partner Abitibi, changing its name to Norske Skog (Thailand). The acquisition will strengthen Norske Skog's business in Asia, with the continent's share of the company's worldwide revenues set to increase from 10 per cent today to up to 30 per cent.

"Under the Norske Skog umbrella, Thailand remains a major market. We will continue developing to be the best we can be. My job is to help my working team to do that," said Nordin.

Nordin moved to Bangkok in December 2005 after spending almost six years at Pan Asia Paper's operation in Singapore.

"Under the acquisition, the Bangkok office is able to access Norske Skog's research and development facilities around the world. We can get more know-how and any expert's help to solve problems," said Nordin.

He said that the Thai operation would also adopt Norske Skog's global business practices, which can be adapted to all regions, as well as a new IT system.

Nordin said that Norske Skog would invest $10 million to improve its IT system. The company last year spent $300 million to set up a major newsprint facility in Beijing with a production capacity of 330,000 tonnes per year.

Nordin said that Norske Skog has overhauled its IT system throughout the region, mainly at its five major newsprint mill factories in China, South Korea and Thailand.

The company will allocate $10 million to improve its paper mill in Sing Buri province including energy management, quality control, productivity improvements, and the computer system. The Sing Buri factory produces 136,000 tonnes of paper a year and has a 50-per-cent share of the Bt6-billion domestic newsprint market.

"My mission as managing director at Norske Skog (Thailand) is also to improve the safety environment at our newsprint factory which employs about 330 workers. We would like to promote a healthy environment in our workplace," he said. He added that Norske Skog currently serves eight major newspapers in Thailand including Thai Rath, The Nation and Bangkok Post as well as other publications.

 "The working structure in Thailand is quite good, competent, with experienced working people," said Nordin. "I'm very impressed with the Thai workers and management, who have good judgement and work ethics."

Nordin said that the raw material and production costs at its newsprint factory had doubled over the past three years as a result of rising energy costs.

Meanwhile, the price of paper will fluctuate along with the supply and demand, but it also tends to rise along with energy and transportation costs.

Kwanchai Rungfapaisarn

The Nation