<B>Newsprint Producer Sees Price Peaks Next Year</B>

Pan Asia Paper Co., the largest newsprint supplier in Asia, expects newsprint prices to peak next year, according to Reuters. "At the current cost structure that we have, and if we can contain our costs. we would say prices may very well peak by the middle of next year," said Omind Revhaug, chairman and CEO.

Pan Asia is jointly owned by Abitibi-Consolidated, Hansol Paper, and Norske Skogindustrier.

The company has four plants in South Korea, Thailand and China with an annual capacity of about 1.5 million metric tons of newsprint and groundwood paper.

Revhaug said he did not know at what level prices would peak but said newsprint would reach $700 per metric ton by the end of this year, a jump from $450 per metric ton in early 1999.

He said the increase was partly due to rises in oil and waste paper prices. Andre Van Hattum, president and COO, expects tight supply in the newsprint market to continue in the region.

He said demand in Asia was estimated at around six million metric tons per year, compared with supplies of about four to 4.5 million metric tons.

Pan Asia Paper was looking to install a second newsprint line at its 53 percent-owned Shanghai Pan Asia Potential Paper Company with a capacity of about 200,000 metric tons per year, he said. The line now has a capacity of about 140,000 metric tons.

The project, awaiting approval from the Chinese government, would be worth about $200 million and the company could seek more than $100 million from banks to finance the second newsprint line.

China, with demand of some 1.5 million metric tons per year, was growing at a rate of about eight percent annually, he added.

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November 2000
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