Malaysia issues moratorium preventing new paper manufacturing capacity for two years

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Lee Man PM23 Malaysia
Celebrations for the commissioning of the Lee & Man PM23 machine in Malaysia

Malaysia’s Ministry of International Trade and Industry (MITI) has issued a moratorium that will mean no new paper manufacturing licences will be issued for two years.

Although issued today, the moratorium applies from 15 March 2022 and means there can be no new mills constructed, or expansion or diversification of paper manufacturing until March 2024.

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In a statement, MITI said: “The Government is cognisant that the paper industry is facing substantial overcapacity situation for all types of paper products and the country has seen an increasing amount of waste paper imports since 2018.

“The moratorium will allow the Government to manage and monitor the importation of waste paper by existing ML [Manufacturing Licence] holders under the Guidelines for Importation and Inspection of Waste Paper and to ensure sustainable development for the domestic industry.

“MITI assures the industry that the Government is committed to working with all segments of the domestic paper industry to ensure it remains relevant and sustainable in the long run.”

Malaysia has seen investment in recent years from companies including Nine Dragons Paper and Lee & Man Paper.  

It is unclear what this will mean for the existing plans of these companies to expand capacity at their Malaysian mills as it will dependant on whether they have already received the Manufacturing Licences for their plans.

In addition, XSD has made plans to develop a mill to send pulp to China, and again, its plans may be on hold for two years if it doesn’t have the correct licence.

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