sawlogs, pulplogs, pulp, wood, panels, plywood, mdf, osb, chipboard, veneer, bulk, pallets, wood, timber South Korea's Donghae Pulp liquidation to strike a blow on domestic paper producers

   Moscow. Feb 26, 2006. /Lesprom.ru/. The likely liquidation of South Korea's sole pulp mill Donghae Pulp Co. is raising concerns about the impact it would have on domestic paper producers, industry sources said Friday, February 24, according to Yonhap. Donghae Pulp supplies about 400 000 tonnes of pulp annually, equal to 20% of the local market, providing the local industry with some leverage in price negotiations with foreign suppliers, the sources said.

Donghae Pulp went bankrupt in 1998 in the wake of the late 1997 economic crisis. A district court ruling scheduled for Monday will decide whether the company will be liquidated, the sources said.

The nation's paper producers have conflicting views on the effect of the possible liquidation.

"Most paper producers won't be affected by the liquidation since they have plenty of pulp in stock and have diversified their supply sources," one industry source said on condition of anonymity.

However, another source said, "In the long-term, the industry will lose ground in negotiations with foreign suppliers and the price of paper will eventually go up."

Donghae Pulp, established in 1974 by the government to ensure a secure stable supply of paper in the nation, was privatized in 1988.