Monday, August 18, 2008 Costly power blamed for RP paper industry’s problems
HIGH power costs are blamed for the “sad state” of the country’s paper milling industry.
This was revealed by Henry Lim, chairman and chief executive of the Sterling Paper Group of Companies, during a visit to Cebu last Thursday.
He said high power rates have raised the cost of production of paper, which is why more people use plastic bags or receptacles instead. He added that 25 to 35 percent of paper production cost go to power consumption.
But Lim stressed that although paper products are more expensive than plastic, use of paper is less harmful to the environment.
He said China has already banned plastic as the cost of disposing of plastic wastes is three times higher than the production of the material.
Despite present challenges facing the industry, Lim said the Sterling Group is doing “okay” as it has found a niche market.
But some companies have already sacrificed quality over affordability of their products, he added.
This is evident when the standard number of pages of a notebook was decreased to 90 from 100, to allow paper manufacturers to recover production cost, make enough profit and still ensure the affordability of the product.
Lim said that a group of manufacturers is thinking of further decreasing the standard number of pages of notebooks from 90 to 80.
The Sterling Group, however, will maintain the quality of its products since one of the values of the company is product leadership, he said.
But he admitted that with the emergence of smaller and affordable laptops, the use of paper might soon decrease.
Due to the growing popularity of the Internet where electronic cards are available, he said the greeting card industry has become a sunset industry.
The Sterling Group was the first company in the country to introduce Filipino greeting cards.
At present, Lim said the Sterling Group is diversifying its products and has entered into joint ventures with other companies.
But he did not disclose who Sterling’s partners are, saying that he looks at the brand of a company as “very important.”
The Sterling Group has also started to venture into the publishing of activity and children’s books as part of its diversification efforts.
“We always face the crisis head on,” Lim said. (DME)
