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Hansol shuts down CFP Jinju facility in South Korea permanently
Write 한솔제지 Date 2018-07-09

SINGAPORE, 25 May 2011 (RISI) - Hansol Paper has decided to close a coated fine paper (CFP) mill in Jinju city, Gyeongsangnam province, South Korea, permanently.

Production on the plant's 49,000 tonne/yr CFP machine and an off-machine coater was already halted on April 12.

In the ensuing negotiations with Hansol's management, most of the facility's employees accepted the voluntary redundancy program with an early retirement package offered by the company. Some who opted to stay will be assigned to other divisions of Artone Paper, the Hansol subsidiary that operates the Jinju mill, according to the Korea Paper Manufacturers' Association.

The equipment at the facility will be retired and sold as scrap.

The closure has been ascribed to the plant's high operating costs and to stagnant CFP pricing in the domestic market.

Hansol had been operating the mill at a loss since pulp prices started heading up late last year, while CFP prices have been kept low in the domestic market.

The firm's major competitor in the country, Moorim Paper, launched commercial production on a 450,000 tonne/yr CFP machine at its Ulsan mill on May 1.

The PM is integrated with the facility's two bleached hardwood kraft pulp lines, which have a combined capacity of 450,000 tonnes/yr.

The in-house pulp supply has given Moorim a cost advantage over Hansol, which relies on market pulp imports for furnish.

Benefitting from the cost edge, Moorim has kept its CFP prices intact over the past several months in the domestic market, despite soaring pulp levels, to establish the market share for its new PM there.

The move has forced Hansol and other Korean CFP producers to hold back any attempt to raise domestic CFP prices, which worsened conditions at the Jinju mill.

To stop the cost hemorrhages, Hansol eventually opted to take the Jinju plant offline for good.

Despite the shut of Jinju facility, Hansol remains the largest papermaker in South Korea, operating five paper and board plants producing printing/writing paper and cartonboard, with a total capacity of 1.2 million tonnes/yr.

Moorim comes the second. It owns three paper mills making mainly CFP, uncoated fine paper and some specialty grades, with a total capacity of around 1.05 million tonnes/yr.

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