the economic and financial analysis study for the jute / kenaf pulp

The Economic and Financial Analysis Study for the Jute / Kenaf Pulp Manufacturing

Biotechnological Application of Enzymes

for making Paper Pulp from Green Jute / Kenaf

UNIDO POST : FC/RAS/00/153/11-51

May 2004

Techno Forest Co., Ltd.

The Economic and Financial Analysis Study

for the Jute / Kenaf Pulp Manufacturing

Biotechnological Application of Enzymes for making Paper Pulp from Green Jute / Kenaf

The Content 1. Background and Purpose 2. Summary and Conclusion 2-1 Evaluation of Bio-pulping and of Bio-bleaching in Jute Chemical pulp 2-2 Opportunity of Jute Chemical Pulp production in Bangladesh 2-3 Opportunity of Jute Mechanical Pulp production in Bangladesh 2-4 Summary and Conclusion 3. Market for Wood Pulp and Jute/Kenaf Pulp 3-1 Trend in the Pulp market 3-2 Demand and Market Price of Pulp 3-3 Demand of Jute / Kenaf Pulp in Japan 3-4 Paper Demand in Bangladesh 4. Jute/Kenaf as a material for Pulp and Paper 4-1 The characteristic of the Jute / Kenaf fiber and core 4-2 Quality of Jute pulp and Kenaf pulp 4-3 Jute cultivation and Volume of Cultivation Necessary of Jute 4-4 Jute Harvesting, Transportation and Storage Method 4-5 Price Level of Jute 5 Summary of the results in the bio- pulping and bio-bleaching research

for manufacturing standard 5.1 Description of Project components 5-2 Bio-pulping in chemical process with the strain 5-3 Optimization of Soda-AQ pulping 5-4 Pilot Scale / Commercial chemical Pulping 5-5 Bleaching of Chemical Pulping with and without Enzyme 5-6 Cost Reduction by bio-leaching 5-7 Jute Mechanical pulping process 5-8 Bleaching process of Jute Mechanical pulp 5-9 Design standard in Jute Mechanical pulping and bleaching condition

6. JUTE CHEMICAL PULP 6-1 Manufacturing Process of Chemical Pulp 6-1-1 Manufacturing Process 6-1-2 Auxiliary Equipment 6-1-3 Electrical Equipment 6-1-4 Instrumentation and Process Control 6-1-5 Water and Effluent 6-1-6 Buildings 6-1-7 Employment Plan 6-2 Facility Investment of Chemical Pulp 6-2-1 Basis for Calculating Facility Investment 6-2-2 Summary of the Facility 6-2-3 Facility Cost Calculation for Each Process 6-3 Profitability of Chemical Pulp 6-3-1 Basis for Profit and Loss Calculation 6-3-2 Variable Costs 6-3-3 Fixed Costs 6-3-4 Transportation Cost 6-3-5 Sales Price and Turn-over 6-3-6 Taxation 6-3-7 Manufacturing Costs 6-3-8 Profit and Loss / Cash Flow 6-4. Design Standards ( Unit Consumption ) of Chemical Pulp 6-4-1 Pulp 6-4-2 Cooking 6-4-3 Pulp Bleaching Process 6-4-4 Dry Pulp Process 6-4-5 Chemical Recovery Process 6-4-6 Boiler Facilities 6-4-7 Steam, Electricity, Water 6-4-8 Effluent 6-4-9 Work Forces 6-4-10 Production Cost 6-5 Supplement of Chemical Pulp 6-5-1 Flow Sheet for Proposed Pulp mill 6-5-2 Cash flow and Profitability Calculation

7. JUTE MECHANICAL PULP 7-1 Manufacturing Process of Mechanical Pulp 7-1-1 Manufacturing Process 7-1-2 Auxiliary Equipment 7-1-3 Electrical Equipment 7-1-4 Instrumentation and Process Control 7-1-5 Water and Effluent 7-1-6 Buildings 7-1-7 Employment Plan 7-2 Facility Investment of Mechanical Pulp 7-2-1 Basis for Calculating Facility Investment 7-2-2 Summary of the Facility 7-2-3 Facility Cost Calculation for Each Process 7-3 Profitability of Mechanical Pulp 7-3-1 Basis for Profit and Loss Calculation 7-3-2 Variable Costs 7-3-3 Fixed Costs 7-3-4 Transportation Cost 7-3-5 Sales Price and Turn-over 7-3-6 Taxation 7-3-7 Manufacturing Costs 7-3-8 Profit and Loss / Cash flow 7-4 Design Standards ( Unit Consumption ) of Mechanical Pulp 7-4-1 Pulp 7-4-2 Cooking 7-4-3 Pulp Bleaching Process 7-4-4 Dry Pulp Process 7-4-5 Boiler Facilities 7-4-6 Steam, Electricity, Water 7-4-7 Effluent 7-4-8 Work Forces 7-4-9 Production Cost 7-5 Supplement of Mechanical Pulp 7-5-1 Flow Sheet for Proposed Pulp mill 7-5-2 Cash flow and Profitability Calculation

Executive Summary

The study report was prepared for the purpose of getting a overall economic analysis on the Project of Biotechnological Application of Enzymes for making Paper Pulp from Green Jute / Kenaf, financed by the Common Fund for Commodities and co-financed by the government of France and Bangladesh, and the Project was conducted by United Nation Industrial Development Organization (UNIDO) as implementing agency from January 2001 till May 2004 with a group of the five (5) partners, International Jute Study Group (IJSG) of Bangladesh, Bangladesh Chemical Industries Corporation (BCIC) of Bangladesh, Institute of Blast Fibre Crops (IBFC) of China, Centre Technique du Papier (CTP) of France and Agrotechnology & Food Innovations (A&FI) of the Netherlands. The following is the executive summary for the reference ; With the background that Jute Industry has been suffering for years due to lowering the demand of the products from Jute, there was a necessity in finding new products by the use of Jute. Several studies had been conducted and there is a possibility of applying specific Enzymes to Pulping and Bleaching Process of Pulp manufacturing. Then the basic study was initiated as indicated above. And economic analysis become necessary for the feasibility of Bio-Pulping and Bio-Bleaching. 1) The basis of the Cost Calculation Analysis was initiated on the collection of Data obtained from the Project and applied for the calculation of the Manufacturing Cost of both Chemical Pulp and Mechanical Pulp from Green Jute / Kenaf with the assumptions of Production Flow Chart for both types of the Pulp and the green field Pulp Manufacturing Facility is expected to be constructed, though the location of Mill Site is not specifically defined. Analysis was made on Green Jute as well as Kenaf as a raw material for the Pulp. As a raw material, the Cost of Green Jute was assumed at the level of Tk 1,000/Green Metric Ton at the Mill Site, Green Jute has a moisture content of about 75% and be dried to about 15% of the moisture for the processing. And for fair comparison, the cost of Kenaf (whole plant) was also assumed at Tk 800/Green Metric Ton on the same condition as Green Jute. To process the Green Jute of 2.38 Adt is necessary for produce 1.00 Adt of the Pulp and the assumption was made that Manufacturing Capacity of 100 Adt/day is suitable for Green Jute Pulp, considering the scale of economy. And 343 days of the Mill Operation was assumed as standard working day. In the Bio-Pulping, the pretreatment of the microorganism results in cost reduction of the cooking chemicals, the shorter cooking time and the improvement of physical properties of the fiber. The experimental works on Bio-Pulping in Chemical and Mechanical process is quite encouraging. The results from such works are quite suitable for smaller scale Paper Mills. But several Pilot scale trails are necessary for larger scale Pulp and paper Production,

while there remain problems on the issue of 14 days of the pretreatment by microorganism in case of Production Faciloity of 100Adt/day of Pulp. According to the experimental result of biological bleaching, the consumption of Chlorine dioxide has been reduced by 10-18% when Xylanase is used for the first stage of multiple bleaching stages. And also Brightness has been improved. The results of Cost Saving from the reduction effect of Chlorine dioxide were US$3.66/Pulp Adt. The purchase cost of Xylanase is US$5.00/Pulp Adt, so that the reduction effect of Chlorine dioxide is almost off-set with such cost of Xylanase. But there is a possibility that Xylanase can be produced locally from the microorganism at the cost of US$1.50/Pulp Adt. Then local production of Xylanase is possible, there will be a cost saving of US$2/Pulp Adt. Xylanase Bleaching in the Mechanical process was not sufficiently efficient to improve the brightness. Enzymes pretreatment was not interesting because Alkali removes the Xylans in the Pulp during impregnation, The Variable Cost included Raw Material, Energy Cost and Chemical Cost and Other Cost as per Data available from the research. Wage of Work Forces was calculated according to the necessity of Pulp Manufacturing Operation and the Maintenance Cost was calculated at the total amount of US$23.00/Adt for general maintenance of the facility. Further, depreciation was calculated on the basis of 20 years for the machineries and 30 years for the Buildings, maintaining book value of 10%. The Financial interest of 0.9% was applied on the basis of Loan for LDC, subject to the approval of Japan Bank for International Cooperation (JBIC), which may be subjected for 30 years repayment term with 10 years grace. The Head Office Cost is calculated with a consideration of the interest by the finance, the inland freight cost to local market and the administrations Corporate Tax was calculated at the rate of 37.5% Also based on the research, Manufacturing facility was assumed and estimated the investment amount for both Chemical and Mechanical Pulp as follows ; Chemical Pulp Facility US$77,382,000.00 Mechanical Pulp Facility US$59,604,800.00 The Pulp Mill construction schedule was assumed to commence 2 years prior to the commencement of the Pulp Mill Operation. 2) Manufacturing Cost Since there are different price levels of the Chemicals in Bangladesh and India, the Manufacturing Cost was calculated for both Chemical and Mechanical Pulp with the following conditions 1. Case 1 Jute with the use of Chemical Cost in Bangladesh

2. Case 2 Jute with the use of chemical Cost in India 3. Case 3 Kenaf with the use of Chemical Cost in Bangladesh 4. Case 4 Kenaf with the use of Chemical Cost in India

In both Chemical and Mechanical Pulp, Manufacturing Cost of Kenaf Pulp with the use of Chemical Cost in India ( as Case 4 ) indicated most feasible and competitive among the options. Additional economic data is attached herewith for the reference. 3) Economic Analysis And Economic analysis for these cases was checked and got the economic indicators as on 2-4 Summary and Conclusion of the report. Through the analysis, Sale of Fine Paper from Chemical Pulp and Newsprint Paper from Mechanical Pulp in Domestic market of Bangladesh will be best option in case of possible reduction or exemption of the import taxes for Chemicals and several financial assistances by the government on VAT, Corporate Tax, or others. The construction of Pulp Mill in the EPZ may also benefit the Project. This report was prepared with some assumption such as Price of Raw materials, Inland freight, Interest Rate, Local Tax and sales Price of the pulp and paper.

Estimation of the Jute Chemical Pulp Production Cost in Bangladesh (US$/ Adt)

Case 1 C ase 2 Case 3 C ase 4

Variable Costs Raw materials 147 147 118 118Energy 37 37 37 37Chemicals 80 57 80 57

Others 18 18 18 18Total Variable Cost 282 259 253 230Fixed Costs Labor 10 10 10 10

Maintenance 23 23 23 23Administration 5 5 5 5Depreciation 82 82 82 82

Total Fixed Cost 120 120 120 120402 379 373 350Factory Manufacturing Cost

Whole Jute Whole Kenaf

Mechanical Pulp Manufacturing Cost Unit : US$/ AdtWhole Jute Whole Kenaf





Total Fixed Cost 94 94 94 94Factory Manufacturing Cost 306 293 291 278

It is recommended for the Project Management to conduct more realistic and detailed feasibility study with clear project assumptions, including cost of cultivation, logistics of the raw materials as well as the market.

Attachment

Feasibility Analysis in Each Case

Intrest Rate VATCase A 0.9% 0.0 % Case1 Chemical Price BangladeshJuteCase B 4.9% 0.0 % Case2 Chemical Price India JuteCase C 0.9% 15.0 % Case3 Chemical Price BangladeshKeanfCase D 4.9% 15.0 % Case4 Chemical Price India Kenaf

Interest Rate of 0.9% represents the rate applicable for Project under Yen-Credit from JapanInterest Rate of 4.9% represents the rate appplicable for commercial reference in US$

Chemical Pulp Mechnaical Pulp Fine News-Case1 Case2 Case3 Case4 Case1 Case2 Case3 Case4 Paper print

Case AFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 18 18 18 18 13 13 13 13 12 12VAT 0 0 0 0 0 0 0 0 0 0

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 435 412 405 383 332 319 317 304 670 550Case BFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 96 96 96 96 71 71 71 71 66 66VAT 0 0 0 0 0 0 0 0 0 0

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 513 491 484 461 390 377 375 361 724 604Case CFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 18 18 18 18 13 13 13 13 12 12VAT 60 57 56 53 46 44 44 42 96 78

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 495 469 461 435 378 363 360 345 766 628Case DFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 96 96 96 96 71 71 71 71 66 66VAT 60 57 56 53 46 44 44 42 96 78

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 573 548 539 514 436 421 418 403 820 682

Sale Price(Domestic Market) 600 600 600 600 425 425 425 425 870 720

Profit After Tax (TAX 37.5%)Case A 103 117 122 136 58 66 68 76 125 106Case B 54 68 73 87 22 30 32 40 91 72Case C 66 82 87 103 29 39 40 50 65 57Case D 17 33 38 54 -7 3 4 14 31 24

Red Letter indicates not feasible

Minimum Profit ( after Tax ) Level, Feasible for the Project10%of the Annual return on Equity and repayment of the Loan during 20years

Chemical Pulp 56 US$/ADTMechanical Pulp 50 US$/ADTFine Paper 50 US$/ADTNewsprint Paper 50 US$/ADT

1. Background and Purpose The research of Biological Application of Enzymes for Making Paper pulp from Green Whole Jute / Whole Kenaf have been done from following Objective and Scope. The project aims at developing technology for use of green jute as raw material for the production of pulp for paper. In developing such a technology, it is intended to reduce the consumption of chemical though the introduction of eco-friendly production processes, reduce energy cost and cost of production. This new technology is expected to achieve a breakthrough in opening up a sector for the jute industry, which would generate sustained demand for jute with a consequent result of stabilizing structural conditions in markets and markets for jute fiber and hence stable source of farmers’ income.

This report has been prepared by Techno Forest Co. Ltd for the purpose of Economic and Financial analysis in pulp and paper technology according to the reports of Biological Application of Enzymes for Making Paper pulp from Green Whole Jute / Whole Kenaf which have been done by each institute. The duties of this report are: 1. Evaluate the consumption parameters of raw materials and energy for pulp production of

the utilized technology. Compare with traditionally used technologies starting from other pulpable materials. Quantify comparative economic data. Related activity : Study consumption of raw materials, chemical & energy and compare

with traditional technology and quantification of comparative economic data.

2. Evaluate the economic and environmental benefits of using bio-pulping technology in the

conventional chemical (Soda-AQ and Kraft) and mechanical processes. Assess the industrial and market advantages. Assess the investment requirements for industrial bio pulping. Related activity 1) Assess investment requirement for incorporating bio-pulping

technology in the existing chemical and mechanical pulping. 2) Saving costs in various processes.

3. Evaluate the economic and environmental benefits of using enzyme, Xylanase, in the

conventional (CEH), elemental chlorine free (ECF) and total chlorine free bleaching (TCF) sequences. Evaluate economic and environmental benefits of Oxygen in the above mentioned sequences. Assess the investment requirement of Enzymatic Bleaching production lines. Related activity 1) Assess investment requirement for incorporating bio-bleaching

technology in various bleaching sequences. 2) Assess reduction of chemical cost in various bleaching sequences.

3) Assess reduction of toxic material in various bleaching sequences

4. Present the complete technical and economic feasibility study including economics of scale

for the production of paper as well as concrete recommendations for further application of new technological development in the use of Jute/Kenaf Related activity Comprehensive report Following Economic and Financial analysis have been done

1. The consumption parameters of raw materials and energy for pulp production of the utilized technology are described in section 6-4 in Chemical pulp and 7-4 in Mechanical pulp.

2. The economic and environmental benefits of using bio-pulping technology in the conventional chemical and mechanical processes is described in section 2-1.and 5-2. Non wood fiber pulp market is described in 3-3.

3. The economic and environmental benefits of using enzyme Xylanase in the elemental chlorine free (ECF) sequences are evaluated in section 2-1,5-5 and 5-6

Investment requirement of enzymatic bleaching production lines is described in 6-2. 4. Economic feasibility study including economics of scale for the production of Jute pulp are

described in 6-3 and 6-4. And rough profitability study of the paper from jute pulp is described in 2-2 and 2-3

Hoping this report will be of assistance to realize the Jute Pulp Manufacturing Project in Bangladesh.

May 2004

Techno Forest Co., Ltd

2. Summaries and Conclusion 2 – 1 Evaluation of Bio-Pulping and Bio-Bleaching in Jute Chemical Pulp

2 – 1 – 1 Evaluation of Bio-Pulping As indicated in the test results of Section 5 – 2, the Pre-Treatment of the Microorganism results in the cost reduction of the cooking chemicals, the shorter cooking time and the improvement of physical properties of the fibers. The experimental works on Bio-Pulping in chemical and mechanical process is quite encouraging. The results from such works are quite suitable for smaller scale Paper Mills. But several pilot scale trials are necessary for larger scale Pulp and Paper Production, while there remain problems on the issue of 14 days of Pre-Treatment by Microorganism in case of Production Facility of 100 Adt/day of Pulp. It is also necessary to clarify the method of preparing large volume of the microorganism and disinfections of the Green Jute Chips and of controlling the temperature as well as the ventilation during the cultivation of the microorganism but the Key issue is to make the Project practical, that 14 days of pre-treatment will require Stock Tank ( Facility ) capable of storing 1,400 Bdmt of Green Jute Chips, which will be 4,118 Mt with a moisture of 66%, maintaining a temperature of 32 - 36℃, with a suitable control of the ventilation and also by maintaining its consistency. To clear the storage problem, it is necessary to have a trial running of the pre-treatment in a pilot scale Mill. The investment cost of Bio-Pulping Facility with the pre-treatment of microorganism and the variable cost to carry the pre-treatment should be compared with the cost reduction by the Bio-Pulping. As the effect of Bio-treatment in the part of pre-Cooking of Jute Soda AQ Pulp, Cooking chemical of NaOH has been reduced from 17% to 15% and the reduction of Cooking time of 90 minutes to 60 minutes, which is equivalent to the cost saving of US$2/Adt and US$1/Adt. On the other hands, the experiment by A&FI has indicated 20% reduction of refining energy. In case refining of APMP requires 1,100kwh/Adt, 20% of energy saving is equivalent to the cost reduction of US$8 – 9/Adt of Pulp from own power generation cost. On the report of Forest Service of U. S. Department of Agriculture (USDA), the effects of the Bio-pretreatment for Pulp are indicated as follows ;

Product Thermo Mechanical Pulp ( TMP ) Production of TMP 600 Adt/day = 200,000 Adt/Year Fungus Treatment 2 weeks in flat pile Capital Investment US$5 – 7 million Energy Saving US$10/Adt (=30% saving in power cost) = US$2 million/year

As indicated herewith, the effects of the Bio-pretreatment for the Mechanical Pulping is expected more favorable than the Chemical Pulping. But it is necessary to find out the cost requirement for applying this process to the Pulp Mill. The cost calculation of the process may be compared with the process applied by USDA.

In this study, it is not possible to calculate the variable cost as well as the investment cost for the pre-treatment facility, prior to Pulping. So that the Investment amount for the Jute Chemical and Mechanical Pulping Facility as well as each variable cost was estimated without considering the Bio-Pretreatment Process. 2 – 1 – 2 Evaluation of Bio-Bleaching According to the results of the experiments by BCIC, the consumption of Chlorine dioxide (ClO2) in the latter Bleaching Stage has reduced by 10% when Xylanase is used for its first stage in the multiple Bleaching Stages. The Brightness has been improved due to Bio-Bleaching if this Brightness Increasing can be converted to a volume of Chlorine dioxide (ClO2). The Bio-Bleaching Effect is evaluated about 15% saving of Chlorine dioxide (ClO2). Oji Paper Co., Ltd. in Japan had applied, in 1998, Enzymes Bleaching by using Xylanase and is operating at 1,300 Adt/day Hardwood Pulping Facility at its latter Stage of Oxygen Bleaching Process, as Oji Paper Co had developed to cultivate the microorganism to produce Xylanase in larger scale at the Mill site. Due to this application to Bio-Bleaching, it is reported that the consumption of Chlorine dioxide (ClO2) or Chlorine (Cl) was reduced by 25 – 50%. The washing water at the Xylanase Bleaching Stage can be used as washing water after Cooking and finally sent to the recovery boiler to improve its burning efficiency and to lower the effluent load. IJSG/BCIC conducted the experiment and find the reduction effect of 10% on the consumption of Bleaching Chemical by D – E – D Bleaching without the use of Xylanase and by X – D – E – D Bleaching with the use of Xylanase and obtained the following results ;

CTP conducted the experiment and to find the reduction effect of 18% on the consumption of Bleaching Chemicals by D-E-D Bleaching without the use of Xylanase and by X-E-D-E-D Bleaching with the use of Xylanase as the following ;

With Xylanase Bio-Bleaching, the reduction of Chlorine dioxide (ClO2) was in the range of 10 – 18%. The reduction of Chlorine dioxide (ClO2) had led the following reduction of Bleaching Chemical Cost. Chlorine dioxide (ClO2) is produced at the Mill site so that the cost saving of

CTP Bio-Bleaching X-E-D-E-DD-E-D X-E-D-E-D ReductionKg/Adt Kg/Adt ClO2 %

ClO2 No.1 16.40 11.50ClO2 No.2 9.10 9.40Total ClO2 25.50 20.90 18.0

IJSG/BCIC Bio-Bleaching X-D-E-DD-E-D X-D-E-D ReductionKg/Adt Kg/Adt ClO2 %

ClO2 No.1 12.17 10.91ClO2 No.2 5.17 4.68Total ClO2 17.34 15.59 10.1

ClO2 was calculated on the base of ClO2 Manufacturing Chemical cost.

The results of Cost Saving from the reduction effect of Chlorine dioxide (ClO2) were US$3.66/Adt. The purchase cost of Xylanase is US$5.00/Adt so that the reduction effect of Chlorine dioxide (ClO2) is almost offset with such cost of Xylanase. But there is a possibility that Xylanase can be produced locally from the microorganism at the cost of US$1.50/Adt. Then if self-production of Xylanase is possible, there will be a cost saving of US$2/Adt ( annually US$70,000 ) due to the reduction of Chlorine dioxide (ClO2). In addition to a reduction of Chlorine dioxide (ClO2) by Xylanase Bio-Bleaching, several experiments confirmed that Brightness by 1 – 2 points and pulp viscosity would be improved.

Further, due to relatively reduced use of Chlorine dioxide (ClO2) by Xylanase Bio-Bleaching, a reduction of AOX in the effluent is also expected. The washing water at the Xylanase Bleaching Stage would be re-used for washing water after Cooking and sent to a recovery boiler to improve burning efficiency and that would result in decreasing BOD, COD and SS in the effluent, which contribute to the environment. 2 – 2 Opportunity of Jute Chemical Pulp Production in Bangladesh 2 – 2 – 1 Estimation of Jute Chemical Pulp Production Cost in Bangladesh Jute Chemical Pulp Production Cost was estimated at US$402/Adt by Soda AQ Process and Xylanase - D-E-D Bleaching Process. In Bangladesh, most of the Cooking as well as Bleaching Chemicals, necessary for the production of Whole Jute Chemical Pulp, are imported with an import duty of about 45% on the import cost. If duty-free is applied to such Chemicals and Chemical prices would be similar to India, Total Chemical Cost can be lowered by US$23/Adt, from US$80/Adt to US$57/Adt. For this study, Green Jute, a main raw material of Pulp, is priced, as raw material cost, at

IJSG/BCIC Bio-Bleaching Chemical Cost X-D-E-DD-E-D X-D-E-D

Cost CostUnit Price Kg/Adt US$/Adt Kg/Adt US$/Adt

ClO2 : NaClO3 US$1,000.00/Adt 29.48 29.78 26.50 26.77ClO2 : H2SO4 US$138.00/Adt 13.87 1.93 12.47 1.74ClO2 : CH3OH US$1,310.00/Adt 3.47 4.59 3.12 4.13Caustic Soda(100%) US$414.00/Adt 20.00 8.36 20.00 8.36Total Bleaching Chemical Cost 44.66 41.00Cost Reduction in Bleaching Chemical 44.66 - 41.00 = 3.66

Tk 1,000/Ton with 75% moisture, which is equivalent to US$62/Adt and it is said that Kenaf will be available on the same condition at the cost of Tk 800/Ton ( = US$50/Adt ) and Chemical Pulp Production Costs were estimated for both Jute and Kenaf as the followings, with an assumption that prices of Chemicals are in same price range as India. Study found there is a good possibility that such production cost of Case-4 in Bangladesh is higher than Hardwood Bleached Kraft Pulp Production Cost in Indonesia or Brasil but the cost of Case-4 is close to Hardwood Bleached Kraft Pulp in Canada or Northern Europe. Estimation of the Jute Chemical Pulp Production Cost in Bangladesh Method of Cooking : Soda AQ Process Method of Bleaching : Bio-Bleaching X – D– E – D Case 1 with Chemical Prices in Bangladesh Whole Jute Case 2 with Chemical Prices in India Whole Jute Case 3 with Chemical Prices in Bangladesh Whole Kenaf Case 4 with Chemical Prices in India Whole Kenaf 2 – 2 – 2 Profit for Domestic Sales of the Jute Chemical Pulp In addition to the Factory manufacturing Cost as on 2-2-1, Sales Cost in Bangladesh Market, including Head Office Cost and Local Transportation Cost is estimated at US$382 – 434 as follows ; In case of local Pulp Sales, VAT ( 15% ) may be applicable on basis of Pulp Tariff Value but there is no study on actual transaction of Pulp so that in this study, VAT is not included in the Head Office Cost and the interest rate of 0.9% was applied, subject to approval of JBIC for LDC countries.

Estimation of the Jute Chemical Pulp Production Cost in Bangladesh (US$/ Adt)





Total Fixed Cost 120 120 120 120402 379 373 350Factory Manufacturing Cost

Whole Jute Whole Kenaf

Estimated Selling Cost of Jute Chemical Pulp in Bangladesh (US$/ Adt)Case 1 C ase 2 Case 3 C ase 4

Total Variable Cost 282 259 253 230Total Fixed Cost 120 120 120 120Factory Manufacturing Cost 402 379 373 350Total Head Office Cost 32 32 32 32Total Manufacturing Cost 434 411 405 382

On the other hand, current Market Pulp Price is generally known as follows on the base of CIF Northern Europe and the Market is in the tight condition on/from Second Quarter 2004.

Imported Pulp Cost sold in Bangladesh, as of March 2004 were as follows, which include Value Added Tax, AIT and IDST for total of about 22% local Taxes, even though there is no import Tax on the Bleached Chemical Pulp.

As indicated Chapter 3 on the Pulp Market, it is quite difficult to forecast the future Pulp Prices, but several Data has been forecasting the international Market Pulp Price of Softwood Bleached Pulp and Hardwood Bleached Pulp as follows ;

The following Price Level is set as the future estimated Prices by multiplying with a factor of 1.22 over the international Market Price forecast, as 22% local taxes is charged in Bangladesh Market.

The quality of Chemical Pulp from Jute ( whole ) is known in between Softwood Pulp and Hardwood Pulp and there is an opinion that such Pulp can be sold at an average price of Softwood Pulp and Hardwood Pulp. As a substitute of Hardwood Pulp, there is also an opinion that Jute Chemical Pulp should be priced at same price level of Hardwood Pulp. Since there is no specific study available on the price of Jute Chemical Pulp so that the estimated business results is calculated as the followings ; Case 1 with Chemical Prices in Bangladesh Whole Jute Case 2 with Chemical Prices in India Whole Jute Case 3 with Chemical Prices in Bangladesh Whole Kenaf Case 4 with Chemical Prices in India Whole Kenaf

Market Price of Market Pulp (US$/ Adt)Mar- 03 Mar- 04 Apr- 04

Softwood Bleached Pulp Northern 520 590 620- 640Hardwood Bleached Pulp Southern 490 490- 500 520- 530Price : CIF N. Eurpoe

Bangladesh : Imported Pulp Price ( including Tax )Bleached Pulp Softwood US$647/ Adt Tk. 37,500/ AdtBleached Pulp Hardwood US$540/ Adt Tk. 31,300/ Adt

Average US$593/ AdtData ; March 2004

Forecast : Market Pulp PriceSoftwood Bleached Pulp Northern US$560- 630/ Adt Average US$600/ AdtHardwood Bleached Pulp Southern US$455- 540/ Adt Average US$500/ Adt

Forecast : Imported Pulp Price in BangladeshBleached Pulp Softwood US$720/ AdtBleached Pulp Hardwood US$600/ Adt

Average US$660/ Adt

2 – 2 – 3 Profit for Export Sales of the Jute Chemical Pulp The Export Cost is calculated as follow by including the Head Office Cost, the transportation cost to the port, the ship loading cost and the ocean transportation on top of the Factory Manufacturing Cost.

As indicated at 2 – 2 – 2, the following international average prices of Softwood Pulp and Hardwood Pulp are estimated on CIF Northern Europe.

Kenaf Chemical Pulp is considered in the international Pulp Market as the substitute of the Hardwood Chemical Pulp, so that Jute Chemical Price of US$500/Adt is applied for Export Sales Price and the business results is estimated as follows ;

For selling the Jute Chemical Pulp in the international Pulp Market, the profit from the export business resulted not enough, comparing with its sales to local market. It seems very

Jute Chemical Pulp Cost with Export Costs Unit : US$/ AdtCase 1 Case 2 Case 3 Case 4

Total Variable Costs 282 259 253 230Total Fixed Costs 120 120 120 120Factory Manufacturing Cost 402 379 373 350Head Office Costs 27 27 27 27Total Manufacturing Cost 429 406 400 377Export Costs Inland Transportation 5 5 5 5

Loading 5 5 5 5Ocean Transportation 70 70 70 70

Total Export Cost 80 80 80 80Total Cost with Export Cost 509 486 480 457

Forecast : Market Pulp PriceSoftwood Bleached Pulp Northern US$560- 630/ Adt Average US$600/ AdtHardwood Bleached Pulp Southern US$455- 540/ Adt Average US$500/ Adt

Chemical Pulp : Export Business Unit : US$/ AdtCase 1 Case 2 Case 3 Case 4

Total Manufacturing Cost with Export Costs 509 487 480 457Export Sales Price 500 500 500 500Bsiness Profit -9 13 20 43Profit after Tax 37.5% 0 5 8 16

Profit after Tax -9 8 12 27Cashflow ( Profit after Tax + Depreciation ) 73 90 95 109

Expected Profit from Chemical Pulp Business in Bangladesh Unit: US$/ Adt

Total Manufacturing Cost 434 434 411 411 405 405 382 382Sales Price in the Market 600 660 600 660 600 660 600 660Business Profit 166 226 189 249 195 255 218 278Income Tax 37.5% 62 85 71 93 73 96 82 104

Profit After Tax 104 141 118 156 122 159 136 174Cashflow 186 223 200 238 204 241 218 256( Cashflow = Profit after Tax + Depreciation )

Case 3 Case 4Case 1 Case 2

difficult to compete for Jute Chemical Pulp produced in Bangladesh in the export market so that the Sales of the Jute Chemical Pulp to the Bangladesh market should be promoted.

2 – 2 – 4 Estimation of the Production Cost and the Profit of Fine Paper

by using Jute Chemical Dry Pulp With the use of Jute Chemical Pulp ( Dry Pulp ) as a raw material, the rough production cost of Fine Paper is estimated as the following. Practically considering the energy as well as the facility investment, an integrated Pulp & Paper Mill will be suitable but in case the Paper Mill is established at the export processing zone on the conditions where special favor for the duties or the income is expected and if the area is close to the market, the transportation cost can be lower. Whether to go for an integrate Pulp & Paper Mill or go for simple Paper Mill will be key issue for the future. The following analysis was calculated on the base that Jute Chemical Dry Pulp is transported to a Paper Mill and produce Printing and Writing Paper. The manufacturing cost of such Printing and Writing Paper is estimated at US$670/Adt.

In Bangladesh, an import duty for Printing and Writing Paper is 22.5% and a total 22.0% of Value Added Tax, Advance Income Tax and Industrial Development Surcharge is applied for the import. In Southeast Asian Market, the same product is quoted US$720/Adt in roll or US$770/Adt in sheet so that such prices will be US$750/Adt in roll or US$800/Adt in sheet CIF Bangladesh, if the ocean freight is added on top. But according to the import data, the Printing & Writing Paper in roll is imported from Korea at US$600/Adt but still imported cost get higher due to the taxes.

Local Industries are well protected in Bangladesh with high taxes and custom duties so that Production of Printing and Writing Paper from Dry Jute Pulp is expected quite feasible.

Production Cost & Profit of Fine PaperVariable Cost US$550/ AdtFixed Cost US$ 90/ AdtFactory Paper Manufacturing Cost US$640/ AdtHead Office Cost US$ 30/ AdtTotal Paper Manufacturing Cost US$670/ Adt

Profit Estimation on Domestic Sales for Printing & Writing PaperTotal Manufacturing Cost US$670/ Adt

C&F Chittagong US$600/ AdtSales Price including Tax US$870/ Adt (US$600X1.45)

Business Profit US$200/ Adt (US$870 - US$670)Profit Tax 37.5% US$ 75/ AdtProfit after Tax US$125/ Adt

2 – 3 Opportunity of Jute Mechanical Pulp Production in Bangladesh 2 – 3 –1 Estimation of Jute Mechanical Pulp Production Cost in Bangladesh Factory Manufacturing Cost of Jute ( Whole ) Mechanical Pulp by APMP Process and Bleaching by Hydrogen Peroxide ( H2O2 ) was calculated at US$306/Adt. As previously indicated, most of the Chemicals are imported with taxes of 45%. In case custom duties are exempted, the Chemical Cost can be reduced by US$13/Adt, from US$78 to US$65. Price of Green Jute in this study is set at US$62/Adt ( Tk. 1,000 ) with 75% moisture and there is a data that Kenaf is available at US$50/Adt ( Tk. 800 ) in the same condition. Manufacturing Cost of Kenaf Chemical Pulp is also estimated with an assumption that the cost of the Chemicals is same as in India. Method of Pulping APMP Process Method of Bleaching H2O2 Bleaching Case 1 with Chemical Prices in Bangladesh Whole Jute Case 2 with Chemical Prices in India Whole Jute Case 3 with Chemical Prices in Bangladesh Whole Kenaf Case 4 with Chemical Prices in India Whole Kenaf

The material costs for manufacturing Jute Mechanical Pulp ( APMP ) is almost same as Wood Bleached Chemical Thermo Mechanical Pulp ( BCTMP ). The Energy cost of APMP is about 80% of BCTMP, as refining energy consumption is set at about 50% of refining electricity and installing Self-Generation system with the use of Natural Gas, while the cost of Chemical is a double of Wood BCTMP due to the chemical consumption of Impregnation Stage need to have similar volume of the Chemicals as Bleaching Process with Hydrogen peroxide ( H2O2 ). Factory Manufacturing Cost of Jute APMP including variable and fixed costs is slightly higher than US$250 – 270/Adt, which is the factory manufacturing cost of BCTMP for both Softwood and Hardwood in the North America so that there may be a possibility to produce Jute/Kenaf APMP Pulp in Bangladesh.

Mechanical Pulp Manufacturing Cost Unit : US$/ AdtWhole Jute Whole Kenaf





Total Fixed Cost 94 94 94 94Factory Manufacturing Cost 306 293 291 278

According to CTP Report, Jute Mechanical Pulp produced by TMP is weak in Pulp strength, compared with a Pulp made from APMP process and not suitable for Newsprint. But Caustic soda and Hydrogen peroxide are necessary for APMP Process on Impregnation stage, prior to the refining, so that, the energy cost of APMP is lower than TMP by US$24/Adt but APMP Chemical Cost require US$34/Adt higher cost than TMP. Therefore Production cost of APMP is higher than TMP by US$10/Adt. There is no Chemical recovery facility in the mechanical pulp process and the Chemicals will be discharged directly to outside of the Mill and that is why Production Method of Jute Mechanical Pulp by BCTMP Process, with less Chemical consumption, is recommended for further study. 2 – 3 – 2 Profit for Domestic Sales of the Jute Mechanical Pulp Selling cost of Jute Mechanical Pulp can be calculated by adding Head Office Cost and Local Transportation Cost to Factory Manufacturing Cost shown in previous section and is estimated at US$304 – 332/Adt as follows ; ( each case in the list is same as difference in the Bleaching as well as Raw Material )

Imported Pulp ( BCTMP for Newsprint Paper ) in Bangladesh was priced, March 2004, at US$425/Adt or Tk. 24,700/Adt including taxes, while international Pulp Market has been indicating BCTMP ( of Aspen ) was priced at US$460 – 470/Adt in March 2003, US$475 - 480/Adt in March 20004 and US$490 – 500/Adt CIF Northern Europe. The price level is rather stable during last one year though there is some possibility to increase on/from April 2004. There are several quality of BCTMP in the market and the BCTMP quality varies according to the usage so that the prices also vary. Further study is necessary to forecast price of BCTMP, which will compete against Jute Mechanical Pulp, therefore, Profit analysis was made as follow on the sales Price of BCTMP, which will be used for the production of Newsprint.

Estimated Selling Cost of Jute Mechanical Pulp in Banglades (US$/ Adt)Case 1 C ase 2 Case 3 C ase 4

Total Variable Cost 212 199 197 184Total Fixed Cost 94 94 94 94Factory Manufacturing Cost 306 293 291 278Total Head Office Cost 26 26 26 26Total Manufacturing Cost 332 319 317 304

Expected Profit from Mechanical Pulp Business in Bangladesh Unit:US$/ AdtCase 1 Case 2 Case 3 Case 4

Total Manufacturing Cost 332 319 317 304Sales Price in the Market 425 425 425 425Business Profit 93 106 108 121Profit Tax 37.5% 35 40 41 45

Profit After Tax 58 66 68 76Cashflow 118 126 128 136( Cashflow = Profit after Tax + Depreciation )

2 – 3 – 3 Estimation of the Production Cost and the Profit of Newprint Paper by using Jute Mechanical Dry Pulp

Factory Manufacturing Cost was estimated for Newsprint Paper by the use of Jute Mechanical Pulp ( APMP Dry Pulp ). Profitability is estimated, as the following rough calculation, that Jute Mechanical Dry Pulp is transported to the Paper Mill and Newsprint Paper is produced, which resulted Total Manufacturing Cost of Newsprint Paper is estimated at US$550/Adt.

Custom duties on the Newsprint Paper is 22.5% and total 22% is further added as Value Added Tax, Advance Income Tax and Industrial Development Tax, making total tax amount 44.5%. Price of Newsprint Paper in the current Southeast Asian Market ( March 2004 ) is US$530/Adt and the imported price of Newsprint Paper into Bangladesh is slightly less than the market. Local price of imported Newsprint Paper in Bangladesh will be US$720/Adt Duty Paid and the following profit is calculated.

Local Industries are well protected in Bangladesh with high taxes and custom duties so that Production of Newsprint Paper from Jute Mechanical Dry Pulp is expected feasible.

Profit Estimation on Domestic Sales for Newsprint PaperTotal Manufacturing Cost US$550/ Adt

C&F Chittagong US$500/ AdtSales Price including Tax US$720/ Adt (US$500X1.45)

Business Profit US$170/ Adt (US$720 - US$550)Profit Tax 37.5% US$ 64/ AdtProfit after Tax US$106/ Adt

Production Cost & Profit of Newprint PaperVariable Cost US$4３0/ AdtFixed Cost US$ 90/ AdtFactory Paper Manufacturing Cost US$520/ AdtHead Office Cost US$ 30/ AdtTotal Paper Manufacturing Cost US$550/ Adt

2 – 4 Summary and Conclusion The purpose of this report is to evaluate Manufacturing Cost for Jute Chemical Pulp and Mechanical Pulp and estimate the project profitability. 1) US$2/Adt (annually US$70,000) of the reduction of the cost is expected if Xylanase is

produced locally. In addition to the cost reduction of ClO2 with the process of Xylanase Bleaching, it was confirmed by the experiment that the brightness improved by 1 – 2 points and the improvement of Pulp viscosity. Also Xylanase Bleaching results in the reduction of volume of ClO2, which will lower AOX in the effluent and washing water after Xylanase Bleaching can be re-used and sent to recovery boiler for its burning efficiency. Finally the process is expected to lower the environment load by BOD, COD and SS of the effluent.

2) There are some uncertain factors on the interest, Value Added Tax (VAT) and Local Transportation Cost in the Head Office Cost so that the Analysis was made on the interest rate of 0.9% and 15% of VAT is not considered. The analysis on the Manufacturing Cost as well as the profitability proved that Jute Pulp as well as Jute Paper Products is expected feasible in selling Pulp ( Jute Chemical Pulp and Jute Mechanical Pulp ) and Paper Products from Jute Pulp in the domestic market of Bangladesh as Pulp and Paper Products may be sold at higher prices in the local market and local market is well protected by various taxes.

3) The cost calculation in this report has been made with Fixed Jute Price US$62/Adt ( = Tk 1,000/Green Metric Ton ) at the chipping area in the Pulp Mill. And the study has not been made on the cost of Jute cultivation by farmers, drying, bundling, truck loading, transportation, storages, etc. It is therefore necessary to study how Jute Cost of US$62/Adt ( = Tk 1,000/Green Metric Ton ) can be reduced, while Kenaf is cheaper than Jute and is priced at US$50/Adt ( = Tk. 800/Green Metric Ton ), which is lower by US$30/Adt in Pulp cost so that the study on the Kenaf supply cost is also necessary for ploughing, Seeds, fertilizing, thinning, harvesting, drying, bundling, loading, transportation, storages, etc.

4) Mill site location has not yet identified, though such location may be the West of Dhaka in the area of Jute Production. Specific study is necessary to identify the location, infrastructures, water in-take, water discharge, labor forces, material transportation, interim storage, product transportation cost, etc.

5) The production of Jute Pulp as well as Jute Paper products is expected feasible in Bangladesh due to the protection of taxes as well as custom duties. But this report does not based on the actual sales prices in the market including role of local taxes, the forecast on future trends on prices and Demand/Supply situation. Market research is key factor for the development of the Project.

This report was prepared with some assumption such as Price of Raw materials, Inland freight, Interest Rate, Local Tax and sales Price of the pulp and paper. In case the interest rate of 0.9% from Japan Bank for International Cooperation is not applied and 15% of VAT is applied the Profitability will be as follows:

Feasibility Analysis in Each Case

Intrest Rate VATCase A 0.9% 0.0 % Case1 Chemical Price BangladeshJuteCase B 4.9% 0.0 % Case2 Chemical Price India JuteCase C 0.9% 15.0 % Case3 Chemical Price BangladeshKeanfCase D 4.9% 15.0 % Case4 Chemical Price India Kenaf

Interest Rate of 0.9% represents the rate applicable for Project under Yen-Credit from JapanInterest Rate of 4.9% represents the rate appplicable for commercial reference in US$

Chemical Pulp Mechnaical Pulp Fine News-Case1 Case2 Case3 Case4 Case1 Case2 Case3 Case4 Paper print

Case AFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 18 18 18 18 13 13 13 13 12 12VAT 0 0 0 0 0 0 0 0 0 0

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 435 412 405 383 332 319 317 304 670 550Case BFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 96 96 96 96 71 71 71 71 66 66VAT 0 0 0 0 0 0 0 0 0 0

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 513 491 484 461 390 377 375 361 724 604Case CFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 18 18 18 18 13 13 13 13 12 12VAT 60 57 56 53 46 44 44 42 96 78

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 495 469 461 435 378 363 360 345 766 628Case DFactory manufacturing Cost 402 380 372 350 306 293 291 278 640 520

Intrest Cost 96 96 96 96 71 71 71 71 66 66VAT 60 57 56 53 46 44 44 42 96 78

Other Head offe cost 15 15 15 15 13 13 13 13 18 18Total Manufacturing Cost 573 548 539 514 436 421 418 403 820 682

Sale Price(Domestic Market) 600 600 600 600 425 425 425 425 870 720

Profit After Tax (TAX 37.5%)Case A 103 117 122 136 58 66 68 76 125 106Case B 54 68 73 87 22 30 32 40 91 72Case C 66 82 87 103 29 39 40 50 65 57Case D 17 33 38 54 -7 3 4 14 31 24

Red Letter indicates not feasible

Minimum Profit ( after Tax ) Level, Feasible for the Project10%of the Annual return on Equity and repayment of the Loan during 20years

Chemical Pulp 56 US$/ADTMechanical Pulp 50 US$/ADTFine Paper 50 US$/ADTNewsprint Paper 50 US$/ADT

The realistic and detailed Feasibility Study is suggested on the raw material cost, transportation cost, the market for Pulp and Paper and demand and supply of the Pulp and Paper to realize the Project of Jute Pulp and Paper in Bangladesh. Basic data on the study is summarized as the following : 2-4-1 Raw Material and Volume Chemical pulp Mechanical Pulp

Pulp Production Adt/day Adt/Year

100 34,300

100 34,300

Volume of Jute, necessary for Pulp Manufacturing Adt/day Adt/Year

GT(moi75%)/Year

238 81,565

293,608

125 42,704 170,814

Cultivation Area of Jute ha 7,500 4,000 2-4-2 Facility Investment Full details is indicated in 7-2 and 8-2. Investment shall be as follows ; Chemical pulp facility Mechanical pulp facility

Direct Construction Cost US$56,224,000 US$41,465,800 Construction Charges US$ 8,152,000 US$ 6,012,000 Other Expenses US$13,006,000 US$12,127,000

Total US$ 77,382,000 US$ 59,604,800 2-4-3 Profitability Finance is estimated ( as on 7-3-8 and8-3-8 ) as follows : Chemical pulp Mechanical pulp Total Investment Requirement US$77,382,000 US$59,604,800 Capital US$10,000,000 US$10,000,000 Loan US$67,382,000 US$49,604,800

Type of the Loan was assumed as follows. If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country.

Interest Rate Loan Term Grace Period 0.9% 30 years 10 years Referring the conditions, the following results were made available : Cost Analysis for Chemical pulp and Mechanical pulp has been arranged and each Cost has been calculated according to 7-3 and 8-3, which was shows as Case A ( VAT 0%, Interest Rate of 0.9% )to be referred for details.

Further, Cashflow Projection, Estimated Profit & Loss, Estimated Balance Sheet were prepared for chemical pulp and mechanical pulp which are shown in the Supplement attached, in order to see the realistic Profitability of the Project. Chemical pulp and mechanical pulp Profitability Analysis, made by the use of Financial Factors, such as Cashflow, Profit & Loss and Balance Sheet, had the following Results : Profitability of Chemical Pulp Case 1 Case 2 Case 3 Case 4 A) Return of Asset 3.49 % 3.81 % 3.90 % 4.19 % B) Return of Equity 8.76 % 8.97 % 9.03 % 9.19 % C) IRR 6.93 % 7.60 % 7.81 % 8.44 %

Profitability of Mechanical Pulp Case 1 Case 2 Case 3 Case 4 A) Return of Asset 2.77 % 3.06 % 3.11 % 3.37 % B) Return of Equity 7.42 % 7.73 % 7.78 % 8.03 % C) IRR 5.36 % 5.92 % 6.03 % 6.56 %

A. Return on Assets ( Profit after Tax / Total Assets ) In 10th Year

B. Return on Equity ( Profit after Tax / Paid Capital + Cash Surplus ) In 10th Year C. IRR : Internal Rate of Return

3. Market for Wood Pulp and Jute / Kenaf Pulp 3 – 1 Trend in the Pulp Market The following statistical data was obtained from FAO Year Book 2001, Forestry Edition, and Non Wood Paper Promotion Association of Japan :

FAO Year Boo 2001 include statistical data up to the end of the year 2001 only and it was indicating Total World Production of Pulp was lower in the year 2001 but the world production of Paper Pulp is currently showing steady growth towards the year 2004 and Non Wood Pulp has a historical share of about 10 – 11% in the Total Pulp Production and according to Paper Economic Journal, April 2004, the Demand and Supply position for Market Pulp is generally showing tight supply position from last quarter of the year 2003 and early this year 2004 due to bad weather in the U.S. South, various shut down at Paper Mills for maintenance, and Wood Chip Shortages due to the closures of the Canadian Saw Mills, which resulted Norscan Inventory Position down to 1.47 million tons also resulted in price increase. Note: FAO Year Book 2001, Forestry indicates in its statistics as “ other fiber pulp”, which can be interpreted clearly as “Non Wood Pulp”. FAO is only public organization, publishing statistical data on the Non Wood Pulp. Non Wood Paper Promotion Association of Japan is a NPO publishing such data for easy understanding in Japan. During the year 2003, the supply of the Market Pulp was heavily affected by SARS and due to the increase in Pulp inventory in Asia and that there were decrease in prices of the Paper Products in China Korea and Europe but Market Pulp prices had been improved towards the end of the year 2003, as there was a significant increase of Market Pulp demand in China supported by a shortage of ocean containers for the shipment of the Market Pulp.

World Non- Wood & Wood Pulp Production and ConsumptionYear

Production Consumption Production Consumption Production Consumption Production Consumption1997 19,055 19,149 162,686 162,007 181,741 181,156 10.48 10.571998 20,434 20,521 159,935 159,774 180,369 180,295 11.33 11.381999 18,303 18,316 163,623 163,226 181,926 181,542 10.06 10.092000 19,565 19,581 171,433 171,109 190,998 190,690 10.24 10.272001 19,794 19,719 166,314 167,015 186,108 186,734 10.64 10.56

Base Data : FAO/ Year Book 2001 Forestry

Non- Wood Pulp 1,000M/ t Wood Pulp 1,000M/ t Total Pulp 1,000M/ t Non- Wood/ Total Pulp %

2001 Movement of World Paper, Paper Board & Wastes Unit : 1,000 M/ t

CountryProduction Change Consumption Per Capta Recovery Ratio % Consumption Utilization % Import Export

U.S.A 81,529 0.921 88,708 310 41,212 46.50 31,791 39.00 135 9,556China 37,929 1.194 44,130 34 16,344 37.00 23,718 63.50 7,580 206Japan 30,717 0.990 30,931 243 14,841 48.00 13,569 44.20 214 1,488Canada 19,828 1.045 9,132 294 1,478 16.20 3,647 18.40 2,171 3Germany 17,879 1.122 18,543 226 11,526 62.20 9,105 50.90 1,599 4,020Finland 12,503 1.029 1,949 376 698 35.80 635 5.10 37 100Sweden 10,535 1.080 2,419 274 1,454 60.10 2,014 19.10 699 139France 9,630 1.053 10,926 184 5,566 50.90 5,777 60.00 1,088 876Korea 9,332 1.120 7,534 160 5,251 69.70 6,767 72.50 1,517 1Italy 8,924 1.111 10,981 191 5,089 46.30 5,499 61.60 667 257World Total 320,256 0.988 322,043 53 138,011 42.90 143,428 44.80 29,370 23,953Total 1997 301,413 300,563 111,157 37.00 112,645 37.40 18,687 17,199Total 1998 301,736 299,976 117,598 39.20 120,761 40.00 21,358 18,194Total 1999 315,678 319,945 128,093 40.00 131,227 41.60 23,582 20,448Total 2000 324,046 325,136 137,225 42.20 140,620 43.40 27,367 23,971

Recovery Ratio %=Recovery/ Consumption Utilization %= Consumption/ ProductionWaste PaperPaper & Paper Board

Production Consumption

Paper Industries has been focusing on the production of Lumber as it is closely related to a possible reduction of the forest, which will affect on the Fixture of Carbon Dioxide and the production of Round Logs is estimated slow-down from the peak period of the year 1999, not expecting further increase in next years, according to Non Wood Paper Promotion Association of Japan. ( October 2003 )

As seen on the above figures, China, with its 1.3 billion population, and its per capita Paper consumption of 34 kgs ( in 2001 ), has been actively importing Wood Pulp to cover their need for further per capita Paper consumption. At the same time, in addition to the higher Pulp demand in China, the weak U.S.Dollars had offset the appreciation of Canadian Dollar, which restricted price increases of Canadian Pulp Supplier. Japan Paper Association had announced in January 2004 on the 2004 Outlook for Paper and Paperboard demand, which indicates a positive recovery of the demand, while actual Paper and Paperboard Production was 30,450,000 M/t in the year 2003 ( 0.7% less from the year 2002 ), which was also announced in March 2004. So that Paper Pulp Production was 10,520,000 M/t in the year 2003 ( 0.75 less from the year 2002 ) but the Recovered Paper ( the utilization of the Waste Paper ) reached 59.6%, leaving Domestic Pulp at 40.2% and Other Fibers at 0.2%.

World Production of Lumber Unit : 1,000M3

Year Round Logs Fuel & Char Timber/ Veneer Pulp Logs Others Pulp Log ShareA B C D E D/ A %

1997 3,307,747 1,772,026 944,208 411,770* 179,743 -1998 3,223,995 1,725,942 909,545 445,875 142,632 13.831999 3,333,574 1,778,235 946,633 459,257 149,449 13.782000 3,377,282 1,788,952 962,030 478,025 148,275 14.152001 3,327,617 1,784,294 924,035 469,505 149,783 14.11

Base Data : FAO/ Year Book 2001, Forestry*Estimated

China : Wood Pulp : Production, Import, Export, ConsumptionYear 1997 1998 1999 2000 2000

Production 2,210 2,240 3,590 3,700 4,075Import 2,567 3,150 3,985 4,031 5,814Export 30 19 19 51 32Consumption 4,748 5,371 7,556 7,680 9,857Base Data : FAO/ Year Book 2001, ForestryUnit : 1,000 MtChina : Wood Pulp Share, Yearly Changes Unit : 1,000 Mt

Year 1997 1998 1999 2000 2001Wood Pulp Consumption 4,748 5,371 7,556 7,680 9,857Non Wood Pulp Consumption 15,994 15,999 13,659 14,327 14,334Total Pulp Consumption 20,742 21,370 21,215 22,007 24,191Wood Pulp % in Total Pulp 22.89 25.13 35.62 34.90 40.75Base data : FAO/ Year Book 2001, Forestry

Further major European Countries ( Confederation of European Paper Industries ) announced Paper Production was Aprox. 92 million M/t in the year 2003, about 2% up from the year 2002, which is indicating the Market performance was slightly better in the world market. China has been actively importing Paper Pulp to satisfy their domestic market, which is giving impression in general that Supply is short and it seems the Pulp Buyers are rushing to secure the Pulp. There are so many forecasts for the Pulp Market, which tend to be strong, until every Buyer make sure that active demand by China is real and stable. 3 – 2 Demand & Market Price of Pulp Market Price of Pulp is quoted at the price of Market Pulp since price of Pulp is basically a cost to the Paper and not been quoted in the market. There are so many statistical and survey data available in any places of the world but is generally protected by Copy Right. During the year 2000, the price of Market Pulp had jumped to a level of around US$600/Mt – US$700/Mt in the market, while the average Pulp Price was slowly up around 5% for Softwood Pulp and about 10% for Hardwood Pulp for last 7 – 8 years, which Paper companies constantly had been trying to increase prices, Economic situation shows quick recovery as like in China or with nominal price hike due to Weak U.S. Dollar. On/from the end of the year 2003 or early this year (2004) towards March/April Softwood Pulp has been quoted gradually higher in the market to a level of US$630 – US$700/Mt. The Market Price of Pulp will be continuously up, as many surveys indicates, for next one or one and half years, till when market will receive ample supply of Pulp from new Pulp mills, while, historically, Pulp Prices had increased as high as US$1,000/Mt during the year of 1995.

2004 Outlook Domestic Demand for Paper and Paperboard Unit : 1,000 M/ t

Change % Change % Change % Change %Newsprint 3,736 1.0 3,702 - 0.9 3,671 - 0.8 3,702 0.8Uncoated Printing 3,416 - 2.7 3,271 - 4.2 3,178 - 2.8 3,134 - 1.4Coated Printing 6,376 - 1.3 6,314 - 1.0 6,535 3.5 6,640 1.6Communication 1,867 - 1.3 1,888 1.1 1,939 2.7 1,956 0.9Print/ Comu Total 11,659 - 1.7 11,473 - 1.6 11,652 1.6 11,730 0.7Ubleached Packaging 622 - 5.5 595 - 4.3 596 0.2 594 - 0.3Bleached packaging 367 - 4.2 359 - 2.2 349 - 2.8 343 - 1.7Package Total 989 - 5.0 954 - 3.5 945 - 0.9 937 - 0.8Hygienic 1,740 1.2 1,705 - 2.0 1,683 - 1.3 1,686 0.2Others 1,047 - 4.5 1,059 1.1 1,042 - 1.6 1,045 0.3Paper Total 19,171 - 1.3 18,893 - 1.5 18,993 0.5 19,100 0.6Linerboard 5,582 - 2.4 5,538 - 0.8 5,546 0.1 5,612 1.2Corrugating Med 3,600 - 2.0 3,607 0.2 3,646 1.1 3,688 1.2Container Total 9,182 - 2.2 9,145 - 0.4 9,192 0.5 9,300 1.2White Board 2,010 - 3.0 2,025 0.7 2,030 0.2 2,031 0.0Recycle Board 223 - 8.2 209 - 6.3 210 0.5 207 - 1.4Folding Carton 2,233 - 3.5 2,234 0.0 2,240 0.3 2,238 - 0.1Other Paperboard 946 - 6.0 878 - 7.2 881 0.3 878 - 0.3Paperboard Total 12,361 - 2.8 12,257 - 0.8 12,313 0.5 12,416 0.8Paper & Paperboard 31,532 - 1.9 31,150 - 1.2 31,306 0.5 31,516 0.7Source : Japan Paper Association Jan 2004

2004 OutlookGrade

2001 2002 2003(Preliminary)

Demand and Supply in World Pulp Market New Mills, Maintenances, Disputes or other factors normally regulate supply of Paper but Demand is rather steady, as Paper consumption cannot be changed so much for steady lives. At the moment it is very difficult to forecast realistic Pulp demand by China, which had increased Pulp demand at least by 50% during first Quarter of 2004. And that due to the sign of economic recovery in G7 countries, Paper consumption may also expand so that Supply of Pulp will be rather tight in the market.

Demand and Supply of in Japanese Pulp Market Japan Paper Association forecast early 2004 the domestic Demand in the year 2004 will be 19.1 million tons for Paper, 0.6% up and 12.42 million tons for Paperboard, up 0.8% and combined Demand for paper and paperboard to be 31.52 million tons, an increase of 0.7% over the year 2003. The Demand will be expected to increase in a wide range of Papers grades during the year 2004, though the increase will be minimum as shown on the 2004 Outlook Domestic demand. 3 – 3 Demand of Jute / Kenaf Pulp in Japan Due to a very limited quantity of the import and limited statistical data, it is not clearly identified the scale of Market for Jute, Kenaf or other Non Wood materials for Paper and how such materials, Jute, Kenaf or others is applied to the Products. According to Non Wood Paper Promotion Association of Japan, the import of Non Wood Pulp, including Pulp of Reed, Kenaf and Bamboo is estimated aprox. 5,000 Mt/year, which is 0.02% of Japanese Paper and Paperboard Production of aprox. 31.5 million tons and such Pulps are mainly mixed for Wall Paper, Paper Cups, Wrapping for Foods as well as for Table Napkins at 2 – 5 % in weight. Higher cost of such Pulps is main reason for not being promoted for further application and higher mixing ratio to Paper Products. The import of Jute Pulp is not yet known in Japan. It is generally known that the sales price of Non Wood Pulp to Paper converters is a double price of Wood Pulp and the quality of Non Wood Pulp is not so consistent as Wood Pulp, which had been discouraged by Paper users. Non Wood Paper Promotion Association of Japan provided the following market size data. Paper Cup Aprox. 70,000 Mt Wall Paper Aprox. 50,000 Mt Packaging Paper Aprox. 1,100,000 Mt There will be enough Market, when Non Wood pulp is supplied constantly at a reasonable price. Contributions for Global Environment as well as Sustainable Forest management are strongly emphasized in the public and the market has been waiting for the products, friendly to the environment and with a reasonable cost. Non Wood Pulp, mainly of Kenaf, is priced in a range of US$800 – 900/Mt for special use, while price level of Wood Pulp is getting close to such level, but historically Supply of Non Wood Pulp was rather unstable and Supply Volume was not sufficient enough for economical

operation of Paper making or Paper Products, that is why there is not much Demand for Non Wood Pulp and the following Demand Forecast for next 4 – 5 years was prepared by Non Wood Paper Promotion Association of Japan on the condition that Supply is assured and sufficient, at a reasonable price or similar to Wood Pulp. :

Target % is rather conservative and in case Non Wood Pulp is mixed over 10% in weight value, the Products can be classified as ECO PRODUCTS. 3 – 4 Paper Demand in Bangladesh

As indicated above, annual Per-Capita Consumption of Paper is 3 Kgs/person. The total consumption of Paper will be increasing according to the increase of GDP and the Per-capita consumption of Paper will also be up according to the increase of Per-capita income so that the Paper consumption in Bangladesh is expected to increase following the economic development of the country. In case Per-Capita Paper consumption increases one (1) Kg/person, total Paper consumption will increase by 120,000 Adt in Bangladesh, following the economic development so there will be a possibility, in such case, to absorb 34,300 Adt of Pulp production.

Non Wood Pulp Demand ForecastProduction (Production) Target Mixing Expected Vol@1000Mt @1000Mt % % @Mt

Uncoated Printing 3,178(High Grade) 1,342 3% 30% 12,078

Coated Printing 6,535(Publisher) 4,020 3% 30% 36,180

Communication 1,939(PPC) 809 3% 30% 7,281

Packaging 945(Paper/ Bags) 362 3% 30% 3,258

Hygienic 1,683(Tissue) 538 3% 30% 4,842

Paperboard 1,981(Paper Products) 1,112 3% 30% 10,008

Expected Volume of Non Wood Pulp 73,647Source : Non Wood Paper Promotion Association( ) included in main itemTarget means % of Non Wood Pulp to be appliedMixing means % for Non Wood Pulp to be mixed in the products

Pulp, Paper and Board Consumption and Production of 5 Major Jute / Kenaf Producing countrisCountry Year Per Capita

000Mt 000Mt ConsumptionPulp Pulp Pulp Kg

Bangladesh 2001 23 6 389 300 312 150 3China 2001 4,700 4,500 37,581 22,464 33,400 17,570 29India 2001 395 120 444 2,888 4,049 2,645 5Nepal 2001 3 3 34 33 8 5 1.5Thailand 2001 45 5 2,070 895 2,445 919 32.5

ProductionPaper

& BoardPaper

& BoardPaper

& Board

Number of Mills Consumption

4. Jute / Kenaf as a material for Pulp and Paper 4 – 1. The characteristic of the Jute / Kenaf fiber or core The content of Lignin in Jute is higher than Kenaf, and is similar to Hardwood. The content of Lignin in Kenaf is lower than Woods and is easy for its pulping, while Jute is not classified so easy for its pulping. Further the lignin content in Jute as well as Kenaf is relatively lower in Bast a fiber part of Kenaf, than Wood, but is higher in its Core, a wood part of Kenaf, which is similar to Wood. Also Jute gets smaller solution from the extraction with water, hot water and caustic soda, than Kenaf. Jute and Kenaf can be characterized as follows that the fiber and the core are consisted of the different characters. And that the contents of Silica relatively lower than other non-wood materials, such as straws, and not causing troubles in the process of Black Liquor Condensation as well as Recovery Boiler.

Chemical Properties of Jute / Kenaf Source : CPPRI Report & ALPHA, ( May 1992 ) Jute and Kenaf has quite similar in its length and width of the fiber, and that the length of the fiber at the core is classified as short fiber and at the Bast as long fiber so that in general, a average fiber length of whole stem of Jute and Kenaf is classified in the middle of Hardwood and Softwood. Through the microscope, Jute fiber has a thick and uneven cell wall, partly narrow and is of round at the point and has an irregular pentagonal or hexagonal shape and is of oval shape in its interior. The fiber is rather gross and is faded yellow. Jute fiber is a kind of Lignocellulose, which is a tight bonding of Lignin and Cellulose and that delignification is not easy similar to Wood Cellulose. The bast fiber of Kenaf is relatively longer with thick cell wall and is smaller lumen, contributing to tear strength and stiffness and the fiber at the core is shorter with thin cell wall and is larger lumen, contributing to bursting and tensil strength.

Jute Core Bast Whole

Kenaf Core Bast Whole

Pine Poplar

Ash Content % 1.89 4.43 3.58 3.12 5.07 3.89 0.27 0.49 Cold Water Solubility % Hot Water Solubility % 1/10 NaOH Solubility % Alcohol Benzene %

2.44 4.51 4.12 2.98 8.57 4.88 23.30 30.05 26.21 2.75 3.73 2.65

9.29 13.15 10.82 9.39 13.16 10.88 33.77 29.38 32.03 2.79 2.45 2.66

4.45 6.03 17.41 2.62

1.55 3.13 22.15 2.02

Pentosan % 16.04 14.57 15.30 19.58 14.08 17.40 13.05 23.33 Klasson Lignin % 24.23 15.30 21.13 20.01 9.68 15.92 26.79 22.82 Hollo-Cellulose % 75.50 81.40 79.50 77.08 78.24 77.54 77.10 81.50

Fiber properties of Jute and Kenaf

Pine Poplar Jute

Core Bast Whole Kenaf Core Bast Whole

Average fiber length (mm) 0.69 1.95 1.39 0.75 2.22 1.29 2.27 0.78

Average fiber Width (μm) 21.9 16.4 20.1 19.20 17.30 18.30 41.10 21.32

Lumen diameter (μm) 32.00 7.50 -- 31.70 14.30

Fiber wall Thickness (μm) 1.50 3.60 -- 3.20 3.10CPPRI Report & ALPHA､ May ( 1992 ) 4 – 2. Quality of Jute Pulp and Kenaf Pulp BCCI and CPPRI Report is showing the comparison of the strength between Jute Chemical Pulp and Kenaf Chemical Pulp with Wood Chemical Pulp, which is clarifying that the strength of Whole Jute Chemical Pulp is slightly stronger than Whole Kenaf Chemical Pulp and that the strength of both Jute/Kenaf Chemical Pulp is classified in the middle of Softwood and Hardwood Pulp. Strength of Jute and Kenaf Chemical pulp BCIC

Un- bleached

CPPRI Un- bleached Bleached

Kenaf Target

HW BKP

SW BKP

Freeness SR CSF ml

17 650

32 400

30 440

25 500

14 700

20 600

Burst Index kpam2/g 2.53 4.00 3.8 2.0 - TearIndex mNm2/g 9.60 12.50 9.7 8.2 2.18 22.54 Tensile Index KN/m 45.21 564.5 54.0 2.5km 0.75km 4.3km Brightness %ISO 80.1 89 87 Kenaf Pulp is good for hydration and is for beatability. When comparing the handsheet of Kenaf with Hardwood Bleached Kraft Pulp, Kenaf is bulky ( lower density ), and even though paper quality is similar, but the drainage and the permeability of Kenaf is inferior to HWBKP. Due having the beatability, the fibrillation is progressed and the fiber get shorten in the process of beating, so that the beating contribute to the tensil strength, the paper strength get lower due to the increase of the fines, resulting to affect on the printability. Further the cells in the fiber is damaged in the process of the beating, the opacity and the permeability of the paper is getting high, which may cause the low oil absorbency. To avoid having the troubles, it is important to refine the kenaf fiber properly as beating charactaristic and select the internal and surface sizing chemical. On the other hand, Kenaf paper is bulky and have a unique aesthetic properties.

Generally, the quality of the pulp may not be influenced in case of mixing different materials up to 5% but if increased to 10%, then specific quality of the pulp may appear in the paper. The quality of Kenaf pulp ( of whole stem ) is quite similar to HWBKP but when applying to general printing paper, it is recommended to mix into HWBKP less than 5%, and if for the development of new paper showing specific character of Kenaf, mixing to be over 30%. Quality of handmade sheet from Kenaf in USA PulpFurnish HWBKP KENAF

100% 0%

60% 40%

40% 60%

0% 100%

Basis Weight g/m2 Density g/cm3 Brightness % Opacity % Burst Index g/cm2／g/m Breaking Length Km Tear Index g／g/m2 Folding endurance time Air Permeability sec

59.9 0.65 78.3 76.9 41.2 6.20 89 53 66

61.1 0.66 78.1 74.5 44.8 6.60 123 113 211

61.4 0.67 78.8 72.7 45.0 6.99 141 177 227

61.3 0.63 78.6 70.0 51.2 7.26 170 356 720

Report : Kenaf for tropical forest security 4 – 3 Jute Cultivation and Volume of Cultivation necessary of Jute From JICA Report 1994 Basic Study for Project Development Jute requires, in its cultivation, weather conditions of a temperature of 20~37℃, a moisture of 70~90%, over 12 hours of sunlight and the area is geographically concentrated in the Eastern India and Bangladesh, resulting that these two countries has world biggest cultivation area and has been producing approximately 70% of the world Jute Production. Three (3) types of Jute are cultivated in Bangladesh, which are (1) White species, (2) Tossa species and (3) Meshta a kind of Hibiscus and 90% of the production is from White and Tossa species also Meshta is not playing key role due to its production volume and its quality level of the fiber. Tossa species is superior to White species in its fiber quality but is not of resistance in longer period in the water so that the cultivation is done relatively in mid to higher location but White species is quite suitable for low land. In most case, in Bangladesh where 1/3 of land is normally covered with water in rainy season, Tossa species is cultivated in low land, for which is specially noted. Due to this character, the cultivation period of Tossa species delay about a month after White species,

which causes inconveniences on the Rice cultivation, when delay in harvesting of Tossa species so that there is tendency, to avoid the delay in harvesting, local people prefer Tossa species to White species, increasing a chance of the risks such as flooding. For this reason, the production is shared 60% with White and 40% with Tossa in Bangladesh. Bangladesh Rainy Season April to October Dry Season November to March White species Sowing early March to early April Harvesting middle July to middle August Tossa species Sowing middle April to middle May Harvesting middle September Jute as a material for pulp is required for over 120 days of cultivation as the lignifications is not enough matured and easily decayed if it is less than 120 days. Jute is grown in maximum 8 months ( 240 days ) after sowing, therefore theoretically the supply period ( or cultivation period ) is maximum 6 months ( 120 days ). But in case of extending cultivation period, then Rice cultivation schedule has to be reviewed by reducing own Rice cultivation, which may require high necessity of cash income and of higher Jute costing. The supply of Whole Stem Jute, as a material for paper, should be considered within a pattern of the present cultivation schedule so that the annual supply volume of Green Jute should be secured in the harvesting period of 2.5 months maximum. In order to produce 34,300 M/t of whole stem Jute pulp annually, 42% of pulp yielding is expected, meaning 73,400 M/t of dried whole stem Jute is necessary. By presuming annually one-time cultivation as current done in Bangladesh and from the figures gathered, 7,500 Hectares of cultivation area is assumed necessary around a new pulp mill. However, in order to prevent the damages due continuous planting, it is advisable to have a fallow field, which means 1.5 times of necessary cultivation or 11,000 Hectares of land is necessary. If Jute is to be cultivated, the transportation of Jute to proposed pulp mill site maybe minimized to 50Km at the most, considering the cost of the transportation. 4 – 4 Jute Harvesting, Transportation and Storage Method To have a continuous and stable production of Pulp, a stable supply of the material through the year is base for the project. The technical solution will include the sowing and harvesting, the drying, the measures against the decay and the contamination by sand, soil or stones. The pre-arrangement is necessary for smooth production, especially when applying Green Jute for pulping. After the Pulp Mill is built and Jute is harvested, the raw material ( Jute ) will most likely be transported to the Pulp Mill in the following methods ; In the event Jute will be harvested between July and September, after the stem is fully matured and green, the ( Jute ) Plants will be reaped and left in the field to dry for aporx. 15

days. When the moisture of Jute drops to less than 20%, the plants will be bundled and tied with a rope to be transported to the Pulp Mill or the storage area. There are two (2) ways of storing Jute. One way is to transport Jute directly to the storage area at the Pulp Mill Site as explained as above. Another way is to store Jute Bundles temporarily at a storage area, near the cultivation field. In either case, the Jute Bundles must be protected from rain and soil fungi that may cause decaying. To produce 100 M/t of Jute Pulp in a day, Aprox. 238 M/t ( with a moisture of 10% ) is required. In case The Pulp Mill operates 343 days a year, producing 100 M/t in a day, an annual production will be 34,300 M/t of Pulp, it is necessary for the Pulp Mill to secure 81,600 M/t of Airdried Jute. As previously mentioned, with an assumption that White and Tossa species can be harvested during middle July and September ( 2.5 months maximum ), it is also necessary to store Jute, as material for Pulp, for 9.5 months as stock of 64,600 M/t ( with a moisture of 10% ). It is also necessary for the Mill to store Green Jute without causing the decay after air-drying. It is not clear if the detailed study for storing Jute, but the following method of storing will be a good reference. Jute is richer in the content of Lignin than that of Kenaf and easy to decay. The study for longer storing of Jute is strongly suggested for the project. Generally, there are two (2) methods of Storages, one is wet and the other is dry method for Non Wood Fiber materials and the wet method is called as “Ritter Way” and is applied in the production of Bagasse, which had not yet studied and applied for the Kenaf. According to the actual storage application by Genko Pulp & Paper Mills, the following differences are identical between the Reed and the Kenaf : 1).Bast Fibers or Surface Skin of Kenaf is rich in Pectin and is perishable. 2).The bacteria as well as the insects may easily deteriorate core part of the Kenaf. There are three (3) studies done in China for the Storage Methods of the Kenaf;

A) The Stock Yard for Reed Materials; the deterioration effects in multiple layers of Kenaf in the warehouse with roof and with ventilation.

B) Flax Research Institutes; the deterioration effects of Rain Protection by Rice Strews or Reeds and the deterioration effects by the bacteria as well as the insects.

C) Sekizan Pulp & Paper Mills; the deterioration effects of Rain Protection by Reeds. The Basic concept for the storages of the kenaf are based on the Storages of the Reed which are for its counter measures against thunder / fire and for ventilation / rain protection. The Studies against thunder / fire shall be applicable for the Kenaf for its fire protection and the Studies for ventilation / rain is indicating Reed is richer in lignin and is more durable against water, which means the Reed is much tough against the deterioration.

The Study (B) by Flax Research Institutes had selected 3 kinds of Fungicide and Anti-Bacteria Chemicals but the use of Fungicides and Anti-Bacteria will results in the hike of the Cost so that such materials should be utilized only when necessary for the securing environmental condition. Therefore, the Kenaf shall be stored not to have a direct contact with soil, to avoid in-flow of rain water, to have quick ventilation effects for drying with multiple layers. The Kenaf is generally bulky than the Reeds and is difficult in bundling but is easy to stack for good ventilation so that it is recommended for the storages of the Kenaf to have a Roof of the Reed with the eaves, which will minimize the contact of rain water to the surface of the layer and in this way the deterioration of the quality will be minimum at the surface of the layer only, leaving majority portion remain not deteriorated for about 1.5 years. This is not best way but is practical and economical, while the deterioration is generally seen during the rainy season with high temperature. Preservation Measurement is required during the rainy season with high temperature. The storage method of the Kenaf should be recommended as follows; On-Site storage should have a concrete floor made with the concrete beams that are 1-meter apart for ventilation (the beams should be 10 X 10 cm in size). The bottom layer of bundled-up Kenaf should be laid vertically to the beam and the next layer horizontally so that each layer will be piled crisscrossed to one another. The single storage size should be 4-meters wide X 30 m length X 5-meters high (for total of 600 bundles). If the specific gravity of Kenaf equals 0.25, the 600 bundles space is equivalent to 150 tons. Either a large vinyl sheet or some kind of plants capable of shielding the pile of Kenaf from rain can be used to cover the top. 160 blocks, as maximum, should be made as on-site Kenaf Storage. To avoid spreading of fire, each block should be erected in intervals with the same size of open space in between so that the total storage dimension will be double of actual storage volume. The temporary off-site storage should be made basically the same, but concrete floor will be difficult, in which case, hard dry ground will be sufficient

4 – 5 Price Level of Jute In this report, the price of Green Jute with moisture of 75% is set at Tk. 1,000/Green Metric Ton ( = US$17.24/Green Metric Ton ) is set for calculation. There is no survey on the cost of various cultivation factors such as ploughing, sowing, fertilizing, weeding, harvesting, drying, etc, evidencing that such price is reasonable. And the price of Green Jute with moisture of 75% can be converted Tk. 4,000/Adt or US$62/Adt. The prices of Kenaf in Thailand, India or Southern area of U.S.A is US$50/Adt in the same condition. The price of Wood Chip in the south of U.S.A. is also priced at US$40 – 50/Adt. It is not possible to make simple comparison but US$62/Adt of Jute seems high. It is therefore necessary to study how Jute Cost of US$62/Adt ( = Tk 1,000/Green Metric Ton ) can be reduced, while Kenaf is cheaper than Jute and is priced at US$50/Adt ( = Tk. 800/Green Metric Ton ), which is lower by US$30/Adt in Pulp volume.

5. Summary of the results in the bio-pulping and bio-bleaching research for manufacturing standard. 5-1 Description of Project components from Appraisal Report in 13 September 1999 The project has five main components. The first major component included a set of objectives which aim at identifying and collecting micro-organisms and processes currently in use and selecting suitable ones for application in jute bio-pulping on the basis of comparative studies of different micro-organisms. The second component envisaged to develop most suitable enzymes for bio-pulping and bio-bleaching and apply the same for preparing handsheet at IJSG (International Jute Study Group), BCIC (Bangladesh Chemical Industries Corporation), A&FI (Agrotechnology & Food Innovations) and CTP (Centre Technique du Papier). The third component was concerned with the management of black liquor produces during pulping and effluent generated during bleaching and to find suitable methods for storage of green jute. Study has been conducted to determine the hazardous component of waste water and chlorine and AOX related compounds. The effluent was characterized and treatment means was identified, sedimentation means was used for purification of effluents. As a supplementary component, suitable methodology for storage of green jute was sought. Fungcide for protection of green jute plant was also developed. The fourth component was large-scale trial application of pulping in Kraft process in different establishments to determine the physical characteristic of pulp and paper and to evaluate and compare the results. Pilot scale and labo-scale trial of pulping at BCIC (Bangladesh) in Kraft process. CPPRI(India) and CTP(France) conducted to determine the physical characteristics of pulp and paper. Large-scale trials for production of pulp and paper was carried out at BCIC and results of the trials was compared and evaluated. The fifth component was dissemination of results and completion of the project. A dissemination program incorporating training of trainers, holding of a Workshop and preparation of show-how materials including Technical Manuals and a Project Completion Report is the final component of the project. The details of the Program will be worked out in consultation with all this technology. 5 participants Bangladesh: BCIC Bangladesh Chemical Industry Corporation IJSG International Jute Study Group India : CPPRI Central Pulp & Paper Research Institute China : IBFC Institute of Bast fiber Crops Netherland : A&FI Agrotechnology & Food Innovations France : CTP Central Technic du Paper

Research role share of each institutes IJSG/BCIC CPPRI IBFC A&FI CTP Selection of Microorganism X

Bio-Pulping X X Pulping X X X X Bleaching X X X X

Chemical pulp

Pilot Scale X X Pulping X X Mechanical pulp

Bleaching X X 5-2 Bio-pulping in chemical process with the strain from IJSG / BCIC report page 39—51 Whole Jute will be biologically treated, prior to the Cooking wit Soda AQ and kraft Process, which is classified as Bio-pulping here and the following three (3) microorganisms are selected for such pre-treatment. Ceriporiopsisi subvermispora Phanerochaete chrysoporium: most widely used strain for bio-pulping Fomes lignosus : Suitable for bio-pulping Testing conditions for Bio-pulping is set as follows Whole jute plant chip (2-3cm cut) 350mg Water 700ml containing KH2PO4 35mg NaH2PO4 70mg MgSO4 150mg CaCl2 35μg FeSO4 35μg ZnSO4 3μg CuSO4 7μg MnSO4 3μg Autoclaved at 120℃ for 15minutes Adding 14 mg of Glucose and the microorganism Aeration and incubated at 30℃ for 14days. Moisture content of jute chip was 66.6% The testing had been conducted to find out most suitable Cooking condition by applying Soda AQ Process with the Green Jute, pre-treated by the microorganism, while Cooking condition is set as follows ; Cooking Condition of Soda-AQ: Temperature 170℃ Cooking time 90 min. Liquor ratio 1:5 NaOH charge 17% (as Na2O) AQ charge 0.05% 0.1%

The following results were available from the tests Bio-pulping Jute Chips in the Soda-AQ process – 17% Alkali from table 15 (page46)

Treatment

AQ %

Liquor PH

Unscreened yield %

Screen rejects %

Kappa No

Untreated 0.05 12.1 47.50 0.50 20.50 C. subvermispora-2 0.05 11.7 44.20 0.00 16.00 F. lignosus 0.05 11.6 42.12 0.00 17.50

1) C. subvermispora and F. lignosus are found most suitable strain for bio-pulping in both

the Soda-AQ process. Results of bio-treated and untreated pulp in the Soda-AQ process (using 17% Alkali as Na2O) are given in above table. It appears that of the nine fungal strain, P. chrysosporium-1, P. chrysosporium-3, C. subvermispora-2 and F. lignosus are more effective in reducing the pulp Kappa number by 3-4 units. After reducing the alkali charge from 17% to 15% as Na2O, the desired Kappa number of 20 was able to achieved with improved physical properties. Yield loss is more or less same with 17% alkali charge.

2) Physical properties of biochemical pulp improved significantly, pulp produced in the Soda-AQ. The burst index of all pulps from treated chips was 20-25% higher than that of control pulp.The tensile strength of Soda –AQ biochemical pulp increased about 20-30%.The tear index of Soda-AQ biochemical pulp increased about 40-50%.

Bio-pulping jute chips in the Soda-AQ process

Untreated From IJSG / BCIC report table 15-19 Alkali %

AQ Cooking Time(min)

Unscreened

yield

Screen rejects

K. No.

Burst Index Kpam2/g

Tear Index MNm2/g

Tensile index Nm/g

Free- ness SR

Brightness

17.0 0.05 90 47.50 0.50 20.50

2.78 8.55 41.04 15 23.3

15.5 0.05 90 48.00 0.85 24.20

2.07 13.41

44.68 14 22.1

17.0 0.05 60 46.80 1.38 21.00

15.5 0.05 60 48.00 5.00 41.00

C. subvermisipora-2 Alkali %


Unscreened

yield

Screen rejects

K. No.

Burst Index Kpam2/g

Tear Index MNm2/g

Tensile index Nm/g

Free- ness SR

Brightness

17.0 0.05 90 44.20 0.00 16.00

3.68 15.30 57.12 20 29.8

15.5 0.05 90 44.25 0.00 18.73

3.58 14.33 58.76 20 27.7

17.0 0.05 60 46.80 0.00 17.32

- - - - -

15.5 0.05 60 46.66 0.00 18.18

- - - - -

F. lignosus Alkali %


Unscreened

yield

Screen rejects

K. No.

Burst Index Kpam2/g

Tear Index MNm2/g

Tensile index Nm/g

Free- ness SR

Brightness

17.0 0.0 90 42.12 0.00 17.50

3.56 14.80 51.00 21 29.6

15.5 0.05 90 42.40 0.00 17.50

2.87 12.20 51.52 21 28.7

17.0 0.05 60 43.60 0.00 19.35

- - - - -

15.5 0.05 60 43.00 0.00 24.00

- - - - -

3) From the results it has been revealed that there is no significant loss of holocellulose,

cellulose and hemicellulose after treatment with C. subvermispora and F. lignosus for 07days. After 14 days of treated with C. subvermispora no significant loss of holocellulose, and

celluse was observed. But lignin loss was found to be 11%.

4) After treatement of 21 days loss of holocellulose, cellulose and hemicellulose are much higher than

treatment 14 days with both P.chrysosporium-1 and P. chrysosporium-3 and Fomes lignosus.

Considering all these experiment it can be concluded that in respect of delignification or reduction of

5) Kappa No. treatment of jute chips for 14 days may be sufficient with strains. Microbiological pre-treatments of RMP A&FI report page 55-64

4.2 The effects of microbiological pre-treatment on simulated refiner mechanical pulp (RMP) of green Jute.

4.3 The effects of incubation time of the F. lignosus pre-treatment on simulated refiner machanical pulp (RMP) of green Jute.(1)

4.4. The effects of incubation time of the F. lignosus pre-treatment on simulated refiner machanical pulp (RMP) of green Jute.(2)

Green Jute was treated with F.lignosus according to the procedure as described before.

Raw Material The outer bark of the Jute was dark brown from Bangladesh Dry green Jute stems were chopped to 6.25mm

Microbiological treatment

Chip were divided to moisture content of 66% with medium medium: KH2PO4 100 mg/L NaH2PO4 200 mg/L MgSO4 450mg/L FeSO4 100 μg/L CuSO4 20 μg/L

ZnSO4 10 μg/L MnSO4 100 μg/L CaCl2 10 μg/L glucose 20g/L On the base of the dry weight, a volume with in total 15-mg of

micro-organisms was added to 220g of jute chips (+/-193g dry weight)

The dosage of the micro-organisms was thus 15mg DW per 220g of dry weight jute chip = 78g/ton

Washing & Beating

After the microbiological treatment, the jute was soaked in water Sorking was done during 10 minutes and 20minutes with fresh water.

PFI mill 500 revolutions with a gap of 2mm

Conclusions 1) A pre-treatment of simulated RMP green jute with F. lignosus results in 10 to 20%

savings in energy at the same level of strength properties or beating degree and a 1 to 2 ISO % higher brightness.

2) Because no decline of the pulp quality was found after 14 days compared to 10 or 12 days, it is advised to use incubation times of 12 to 14 days to be sure that the fungal treatment is sufficient.

Microbiological pre-treatment of APMP A&FI report page 65-74

4.6 Microbiological pre-treatment of APMP-PFI pulp (2) The experiment was carried out as below.

Raw Material The outer bark of the Jute was dark brown from Bangladesh Dry green Jute stems were chopped to 6.25mm

Microbiological treatment

Chip were divided to moisture content of 66% with medium medium: KH2PO4 100 mg/L NaH2PO4 200 mg/L MgSO4 450 mg/L FeSO4 100 μg/L CuSO4 20 μg/L

ZnSO4 10 μg/L MnSO4 100 μg/L CaCl2 10 μg/L glucose 20 g/L On the base of the dry weight, a volume with in total 15-mg of

micro-organisms was added to 220g of jute chips(+/-193g dry weight)

The dosage of the micro-organisms was thus 15mg DW per 220g of dry weight jute chip = 78g/ton

Incubated at 37℃ during a period of 13 days Refining 12"refiner 100kwh/ton

Charge Temperature Time Pulp consistency

Bleaching H2O2

1.DTPA 0.6% 60℃ 1.0hr 5% 2.H2O2 5% 70℃ 1.5hr 14% MgSO4･7H2O 0.2% Sodium Silicate 7% Total alkaline 5%

Beating

PFI mill 10000 revolutions

Conclusions 1) The losses caused by the consecutive treatment were 16.4% for the untreated and 21.7%

for the fungal treated green jute. The differences between treated and untreated jute is much smaller than with the RMP process. Apparently most of the mass that is consumed or solved by the fungi is solved by the alkaline peroxide process too.

2) The APMP(Alkaline Peroxide Mechanical Pulp)-process consumes about 25% less energy and results in better paper properties than the RMP process, whereas the fungal treatment saves at least an extra 5% on top of this. This may increase even further to 20% with optimised beating times.

As indicated in the test results, the pre-treatment by the microorganism results in the cost reduction of the Cooking chemical, Shorter Cooking Time and the improvement of physical properties of the fibers.. The experimental work done on bio-pulping in chemical and mechanical process is quite encouraging The results are quite suitable for small scale paper mill and handmade paper mill. A few more pilot scale trials may be necessary for large scale pulp and paper production. But there remain problems on the 14 days of pre-treatment by the microorganism in case of pulp production facility for 100 Mt/day. The methods of preparing large volume of the microorganism and disinfections of the Green Jute Chips and of controlling the temperature as well as the ventilation during the cultivation of the microorganism have to be clarified but the key issue is, to make the project practical, that 14 days of pre-treatment will require Stock Tanks capable of storing 1,400 BDT of Green Jute Chips, which will be 4,118 Mt with a moisture of 66%, maintaining a

temperature of 32℃-36℃, with a suitable control of the ventilation, and also by maintaining its consistency. To clear the issue, a trial running of the pre-treatment in a pilot scale Mill should be necessary. The investment cost of bio-pulping facility with the pre-treatment of microorganism and the running cost of the pre-treatment should be necessary to compare with the cost reduction by the bio-pulping. In this economic and financial study report, it is not possible to cal curate the running cost and amount of the investment for pre-treatment of microorganism prior to pulping. 5-3 Optimization of Soda-AQ pulping From IJSG / BCIC report page33-37 To have an optimum Cooking Condition of Whole Jute Chips, burst fiber and Core , the tests had been in Soda AQ Process with various Liquor ratios and the volume of Alkali and had the following results Cooking test result and also the pulp quality test result of Whole Jute are summarized it is as follows. Testing Conditions : Liquor ratio 1:4 / 1:5 / 1:6

AQ Charge 0 and 0.1% Na2O % 14% - 17% Cooking Temperature 170℃ Cooking Time 90minutes Optimization of Pulping of Whole Jute in soda-AQ Process from table11

Na2O %

AQ %

M:L

PH

K. No.

Yield %

Burst Index Kpam2/g

Tear Index mNm2/g

Tensile Index KN/m

Dnsity Kg/m3

Freeness °ＳＲ

17 0.1 1：5 11.24 15.3 45.00 2.80 9.26 39.65 517 17 17 0.05 1：5 10.81 22.1 47.00 2.53 9.60

45.21 520 17

From CTP report page 5-8 The followings are summarized, through testing by Soda AQ Process and testing of Pulp Quality to have an optimum Cooking Condition for whole Jute : Testing Conditions ：Liquor ratio 1:8 / 1:4 NaOＨ % 16 to 25% AQ Charge 0 and 0.1% Cooking Temperature 170℃ (Fixed) Cooking Time 120 to 240minutes Optimization of Pulping of Whole Jute in soda-AQ Process from table n-1

Yield Cooking Time

M:L

NaOH %

Chage Consum

AQ

Unscreened

screened

K. No.

Cellulose DP

Cellulose Viscosity

MPa.s

120 1:4 25 19.8 0 45.2 45.0 19.9 1,080 13.1 120 1:4 20 17.7 0.1 48.3 48.1 18.3 1,480 23.8

The best results were the highest yields with the highest screened yield leading to a pulp of kappa number around 20. Above cooking condition have been chosen as the best results. By adding AQ, the volume of NaOH was reduced, resulting the improvement of the yield. The beneficial effect of anthraquinone on the chemical consumption is shown in above data. The best compromise between yields, screend yields and kappa number were obtained with 20 with 25% sodium hydroxide. The effect of anthraquinone was very significant in term of yield at the same kappa number level and in term of cellulose viscosity or polymerization degree. From CPPRI report page 40-41 The followings are summarized, through testing by Soda AQ Process and testing of Pulp Quality to have an optimum Cooking Condition for whole Jute : Testing Conditions : NaOH % 20% - 28% AQ Charge 0 and 0.05% Cooking Temperature Not described Cooking Time Not described SodaAQ pulping of Jute From table 8, 9

NaOH %

AQ %

K. No.

Unscreened Yield %

Screened Rejects %

24 0.05 18.4 50.7 0.2 28 0.00 21.5 47.9 0.5

The following summery is obtained from the test results. Bleachable Grade Pulp of Kappa No.20 using Soda-AQ process Optimized at Different institute

Institution

Alkali% as Na2O

AQ

Cooking Temperature

Cooking Time(min)

Yield

M:L

Kappa No

BCIC 17.0 0.05 170℃ 90 47 1:5 20.5 CTP 15.5 0.10 170℃ 120 48 1:4 18.3 CPPRI 18.6 0.05 170℃ 90 50 1:4 18.4

Through various pulping conditions, the following is set as pulping conditions for this economic and financial study report: Liquor ratio 1 : 4 AQ Charge 0.05% NaOH 16% ( as Na2O ) Cooking Temperature 170℃ Cooking Time 90 minutes

5-4 Pilot Scale / Commercial chemical Pulping

Kraft pulping condition From CPPRI report page 65-70

Laboratory Pilot Plant Cooking Chemical as Na2O 17 Sulphidity % 20.6 20 Liquor Ratio 1:4 1:4 Cooking temperature ℃ 165 165 Cooking Time min 90 90 Cooking Schedule Ambient to 100℃min 100℃ to 165℃ min At 165℃ min

30 90 90

30 90 90

Kraft pulping From IJSG / BCIC report page 65-74

Printing & Writing Cooking Chemical as Na2O 16 Sulphidity % 20 Liquor Ratio 1:4 Cooking temperature ℃ 170 Cooking Time At 170℃ min 120

These data was obtained through the Kraft Pulping Process, so that these were not considered for this economic and financial study report by the reason of described in section 6-1-1-3..

5-5 Bleaching of Chemical Pulping with and without Enzyme From IJSG / BCIC report Appendix D page52-64 The results of bleaching in CEH and DED sequences following the soda-AQ process are showing that both brightness and viscosity are improving due to the enzyme treatment. But to have ECF ( Elemental Chlorine Free ) Pulp, the Bleaching Sequence in the pulping facility is considered as XDED with the enzyme treatment for getting Cost Performance

Condition of pulp bleaching in X- DED From IJSG / BCIC report table22

Symbol

Chemical charge

Reaction Time(min)

Temperature ℃

PH

Consis-tency %

X 2 IU/g of pulp 60 50 5-8 10 D1 70% of total active

chlorine 60 70 3.5-4.0 08

E NaOH 2% 60 70 11-12 10 D2 30% of total active

chlorine 60 70 3.5-4.0 08

Results DED with and without enzyme (Soda-AQ Process) From IJSG / BCIC report table27

Bleaching Sequence

D1 ClO2 % as active Cl2


TotalClO2 Reduction

Bright- ness

Bleaching Yield

Viscosity mpa,s

DED 3.20 1.36 - 79.15 95.12 12.12 X1-DED 2.94 1.26 7.89% 80.51 94.89 12.70 X2-DED 2.89 1.23 9.65% 81.20 95.50 12.25 X3-DED 2.89 1.23 9.65% 81.10 94.70 12.50 X4-DED 2.87 1.23 10.09% 82.10 94.72 12.69

X1=developed enzyme X2=pulpzyme X3=Ecopulp X4=Biobrite By looking at the results, the benefit of the bio-bleaching process can be summarized as the reduction of active chlorine 8-10% in DED. From CPPRI report Bleaching sequence of CEH has not been considered in production process of this economic and financial study report. CEH bleaching of Green Jute Kraft pulp. From table 20

Bleaching Sequence

Cl2 consumption %

Alkali Added %

Hypo Added %

Brightness

Viscosity Cm3/g

C-E-H 4.48 2.0 1.5 81.08 422 X1-C-E-H 4.55 2.0 1.5 81.58 397 X2-C-E-H 4.55 2.0 1.5 81.88 302

X1=Pulpzyme HC X2=Biopulp From IBFC report Results of bleaching experiments in DED with enzyme of kraft pulp From page 13 table 4

Bleaching Sequence


D2ClO2 % as active Cl2

TotalClO2 Reduction

Bright- ness

Bleaching Yield

Check

DED 2.70 1.80 - 78.31

95.45 Not fungi Treatment

X-DED 2.60 1.73 3.78% 80.13

95.55 Fungi treatement

X-DED 2.50 1.66 7.56% 81.25

94.75

Condition of pulp bleaching in X- DED From IBFC report table4 Symbol

Initial K.No

Final K.No

Reaction Time(min)

Temperature

℃

PH

Consistency %

X 20.54 18.9 - 19.7 60 50 6.5 05 D1 60 70 - 07 E 60 60 - 05 D2 60 70 - 07

White rot fungi treatment would help reduce chlorine requirement by about 8%. Xylanase treatment shortly after kraft pulping would also help reduce chlorine requirement by 3%. From CTP report Condition of pulp bleaching in DED (Soda-AQ Process) From CTP report table n°3

Symbol Chemical Charge Consumed

Reaction Time(min)

Temperature

℃

PH

Consis- tency %

D1 ClO2 1.74% ClO2 1.64%

60 70 5.5 10

E NaOH 2.29% 60 60 11.7 10 D2 ClO2 1.00% ClO2

0.91% 120 70 3.3 10

Brightness % ISO 81.7 Bleaching yield 94.3

Condition of pulp bleaching in X-E-D-E-D (Soda-AQ ) From CTP report table n°44

Symbol Chemical Charge Consumed

Reaction Time(min)

Temperature

℃

PH

Consis- tency %

X Xylanase 1u/g 120 50 6.93 05 E NaOH 2.5% 90 70 11.49 10 D1 ClO2 1.15% ClO2 1.15% 60 70 4.11 10 E NaOH 1.51% 60 60 11.72 10 D2 ClO2 1.00% ClO2 0.94% 120 70 3.38 10

ClO2 reduction by Enzyme

After all the enzymatic treatment a significant drop of the Kappa number was observed (30 to 35% for the XE and LE treatment and almost 50% for XLE) without any damages on the cellulose, the cellulose viscosity being not affected. The effect of the enzymatic pretreatment has then been proved to be not only efficient but also selective towards the

Bleaching Sequence

D1 ClO2 % 0.25*K/2.63

D2 ClO2 %

TotalClO2 Reduction

Bright- ness

Bleaching Yield

DED 1.64 0.91 - 81.7 94.3 XE-DED 1.15 0.94 18.0% 83.9 93.1

delignification. Bleaching Condition is summarized as follows Cooking condition of each bleaching stage

Symbol Institution Reaction Time(min)

Temperature ℃

PH Consistency %

NaOH %

IJSG/BCIC 60 50 5-8 10 IBFC 60 50 6.5 5

X

CTP 120 50 7.1 5 IJSG/BCIC 60 70 3.5-4.0 8 IBFC 60 70 7

D

CTP 60 70 2.9 10 IJSG/BCIC 60 70 11-12 10 2.0 IBFC 60 60 5

E

CTP 60 60 11.6 10 2.5

IJSG/BCIC 60 70 3.5-4.0 8 IBFC 60 70 7

D

CTP 120 70 3.3 10 Reduction Effect of Chlorine Dioxide (ClO2) by adding Xylanase

Institution Bleaching Sequence



TotalClO2 Reduction

Bright- ness

Bleaching Yield

DED 3.20 1.36 79.15 95.12 IJSG/BCIC X4-DED 2.87 1.23 10.09% 82.15 94.72 DED 2.70 1.80 78.31 95.45 IBFC X-DED 2.60 1.73 3.78% 80.13 95.55 DED 1.64 0.91 81.7 94.3 CTP XEDED 1.15 0.94 18.0% 83.9 93.1

It is therefore the Bleaching condition applicable for this economic and financial study report is set as follows Bleaching condition applied for this economic and financial study report.

Symbol Reaction Time(min)

Tempera ture ℃

PH Consistency % Chemical Charge %

X 60 50 5-8 10 2 IU D 60 70 3.5 - 4.0 8 2.87 E 60 60 11 – 12 10 2.00 D 60 70 3.5 – 4.0 8 1.23

Reduction Effect of Chlorine Dioxide ( CO2 ) by adding Xylanase was 15%

5-6 Cost reduction by Bio-Bleaching 5-6-1 D-E-D Sequence IJSG / BCIC conducted the experiment and find the reduction effect of 10% on the consumption of Bleaching Chemical by D – E – D Bleaching without the use of Xylanase and by X – D – E – D Bleaching with the use of Xylanase and obtained the following results ;

Bio-Bleaching X-D-E-D IJSG / BCIC

D-E-D X-D-E-D Reduction kg/ADT kg/ADT ClO2 % ClO2 No 1 12.17 10.91 ClO2 No 2 5.17 4.68 Total ClO2 17.34 15.59 10.09 CTP conducted the experiment and to find the reduction effect of 18% on the consumption of Bleaching Chemicals by D-E-D Bleaching without the use of Xylanase and by X-E-D-E-D Bleaching with the use of Xylanase as the following ;

Bio-Bleaching X-E-D-E-D CTP

D-E-D X-E-D-E-D Reduction kg/ADT kg/ADT ClO2 % ClO2 No 1 16.40 11.50 ClO2 No 2 9.10 9.40 Total ClO2 25.50 20.90 18.04 IBFC conducted the experiment and to find the reduction effect of 4% on the consumption of Bleaching Chemicals by D-E-D Bleaching without the use of Xylanase and by X-D-E-D Bleaching with the use of Xylanase as the following ;

Bio-Bleaching X-D-E-D IBFC

D-E-D X-D-E-D Reduction kg/ADT kg/ADT ClO2 % ClO2 No 1 10.27 9.89 ClO2 No 2 6.84 6.58 Total ClO2 17.11 16.47 3.74 With Xylanase Bio-Bleaching, the reduction of Chlorine dioxide (ClO2) was in the range of 10 – 15%. The reduction of Chlorine dioxide (ClO2) had led the following reduction of Bleaching Chemical Cost. Chlorine dioxide (ClO2) is produced at the Mill site so that the cost saving of ClO2 was calculated on the base of ClO2 Manufacturing Chemical cost.

Cost reduction in Bleaching chemical in IJSG / BCIC, CTP and IBFC are as follows. Bio-Bleaching X-D-E-D IJSG / BCIC D-E-D X-D-E-D Unit price Cost Cost kg/ADT US$/ADT kg/ADT US$/ADT Enzyme 5US$/L - - 1.00 5.00 ClO2 NaClO3 1,000US$/T 29.48 29.78 26.50 26.77 ClO2 H2SO4 138US$/T 13.87 1.93 12.47 1.74 ClO2 CH3OH 1,310US$/T 3.47 4.59 3.12 4.13 Caustic Soda(50%) 414US$/T 20.00 8.36 20.00 8.36 Total Bleaching Chemical Cost 44.67 46.00 Cost reduction in Bleaching Chemical 44.67 - 46.00 = -1.33 Bio-Bleaching X-E-D-E-D CTP D-E-D X-E-D-E-D Unit price Cost Cost kg/ADT US$/ADT kg/ADT US$/ADT Enzyme 5 US$/L 1.00 - 1.00 5.00 ClO2 NaClO3 1,000 US$/T 43.35 43.79 35.53 35.89 ClO2 H2SO4 138 US$/T 20.40 2.84 16.72 2.33 ClO2 CH3OH 1,310 US$/T 5.10 6.75 4.18 5.53 Caustic Soda(50%) 414 US$/T 22.90 9.58 40.10 16.77 Total Bleaching Chemical Cost 62.96 65.52 Cost reduction in Bleaching Chemical 62.96 - 65.52 = -2.56

Bio-Bleaching X-D-E-D IJSG

/ BCIC

D-E-D X-D-E-D

Unit price Cost Cost

kg/ADT US$/ADT kg/ADT US$/ADT Enzyme 5US$/L - - 1.00 5.00 ClO2 NaClO3 1,000US$/T 29.09 29.38 27.99 28.27 ClO2 H2SO4 138US$/T 13.69 1.91 13.17 1.84 ClO2 CH3OH 1,310US$/T 3.42 4.53 3.29 4.36 Caustic Soda(50%) 414US$/T 20.00 8.36 20.00 8.36 Total Bleaching Chemical Cost 44.18 47.83 Cost reduction in Bleaching Chemical 44.18-47.83= -3.65 The imported purchase cost of Xylanase is US$5.00/Adt so that the reduction effect of Chlorine dioxide (ClO2) is almost offset with such cost of Xylanase. But there is a possibility that Xylanaze can be produced locally from the microorganism at the cost of US$1.50/Adt. Then if self-production of Xylanase is possible, there will be a cost saving of US$2.00/Adt ( annually US$70,000.00 ) due to the reduction of Chlorine dioxide (ClO2) in case of BCIC experimental results.

5-6-2 D-E-H Sequence BCIC conducted the experiment and find the reduction effect of 9% on the consumption of Bleaching Chemical by D – E – H Bleaching without the use of Xylanase and by X – C – E – H Bleaching with the use of Xylanase and obtained the following results ;

Bio-Bleaching X-C-E-H IJSG / BCIC

C-E-H X-C-E-H Reduction kg/ADT kg/ADT Chemical %Cl2 44.00 37.60 Ca-Hypo 26.79 26.79 Total Chemical 70.79 64.39 9.04 The reduction of Chlorine (Cl2) had led the following reduction of Bleaching Chemical Cost.

Bio-Bleaching X-C-E-H IJSG / BCIC

C-E-H X-C-E-H Unit price Cost Cost kg/ADT US$/ADT kg/ADT US$/ADT Enzyme 5US$/L - - 1.00 5.00 Cl2 505US$/T 44.00 22.44 37.60 19.18 Ca(OCl)2 800US$/T 26.79 21.65 26.79 21.65 Caustic Soda(50%) 414US$/T 20.00 8.36 20.00 8.36 Total Bleaching Chemical Cost 52.46 54.19 Cost reduction in Bleaching Chemical 52.46-54.19= -1.74 The results of chemical cost reduction in C-E-H are as same as D-E-D. There is a possibility that Xylanase can be produced locally from the microorganism at the cost of US$1.50/Adt. Then if self-production of Xylanase is possible, there will be a cost saving of US$1.76/Adt due to the reduction of Chlorine (Cl2) in case of BCIC experimental results.

5-7 Jute Mechanical pulping process from CTP report page 60-88 Production Process of Mechanical Pulp with the use of Thermo Mechanical Pulp ( TMP ) Process is the following ; 1) The whole jute chips (cut at 2-to 5cm long) were fed into the impregnation screw. 2) The steam pressure was maintained at 2 bar during about 5 minutes before the primary refiner. 3) The first stage pulp was blown to the secondary refiner. In the TMP Process, Lignin will be soften with the use of friction heat of the refiner, making green Jute mechanically into Pulp and CTP has been studying the pulping of whole Jute with APMP Process with a treatment by Chemicals. APMP Pulping Process is described as follows. 1). The Jute chips were first impregnated with water during one night and pre-steamed. 2). The first stage liquor was introduced at the bottom of the impregnation screw of the Pilot plant. Chemical Charge: NaOH 3% / H2O2 1% / Silicate 4% / DTPA 0.5% Temperature 80℃ Pressure 2 bar 3). Primary refiner 4) Secondary refiner The followings are the strength and the analytical results of the Fiber by TMP and APMP Process From table n-1,n-2, n-3, n-14, n-15, n-16

TMP APMP Primary refer Energy kwh/t 790 276 Secondary refer Energy kwh/t 1,010 857 Total Energy Consumption kwh/t 1,800 1,133 Freeness 122 100 Bulk cm3/g 3.06 1.64 Breaking length km 1.36 5.33 Tear index mN.m2/g 1.67 3.63 Length weighted fiber length mm 0.578 0.695 Area weighed fiber length mm 0.555 0.680 Width μm 25.4 27.0 Coarseness mg/m 0.335 0.242 Fines % in length 78.4 61.25 Fines % in surface 50.1 27.43 Shives number/g 2366 5594 Shives length mm 1.08 1.52 Fiber length distribution % by class 0.20-0.35mm

0.35-0.50mm 0.50-0.75mm 0.75-1.00mm 1.00-2.00mm 2.00-3.00mm

32.0 25.0 25.0

8.0 10.0

0.5

16.95 20.00 32.40 15.30 13.00

2.35

1) The total energy consumption of the APMP pulp showed an important decrease compared to the TMP pulp (930kwh/t instead of 1800 for 115-122ml CSF)

2) The effect of the NaOH charge led to a low energy consumption at the primary refiner, the fiber separation was helped by dissolution of some wood components. The refining energy was also considerably decreased because of the fibrillation of the fibers instead of cutting effects.

3) These results showed a big difference in the mechanical properties between the TMP and APMP pulp. The TMP pulp mechanical properties were comparable with a SGW softwood pulp. But they were always too low for newsprint production. A reinforcement of this pulp with a chemical softwood pulp will be necessary for an appropriate paper production.

4) But the APMP pulp of the mechanical properties were improved by the impregnation stage and led to values suitable for newsprint paper manufacturing. The morphological analysis indicated an increase in the fiber length meaning that the fiber was not damaged during the pulping compared to a TMP pulp.

5-8 Bleaching process of Jute Mechanical pulp As seen in the previous study, an enzyme(Xylanase) pretreatment before bleaching was not Sufficiently efficient to improve the brightness. Enzyme pretreatment was not interesting, b e ca u s e a l ka l i r e m ove d t h e xy la n s in th e pu lp du r in g im p r egn a t i o n . The bleaching trial were carried out with a single P stage after chelation stage with DTPA. The bleaching trials were carried out on the pulps refined at about 100ml CSF. The bleaching conditions and results are given below. Table n-21

5-9 Design standard in Jute Mechanical pulping and bleaching condition This feasibility study has, therefore, set the following Pulping and Bleaching conditions for the Mechanical Pulp

JUTE 108ml CSF Consisitency % 5 Temperature ℃ 70 Time min. 30 DTPA charge % 0.5 PH final 7.9

Chelation DTPA

Brightness % ISO

45.7

Consisitency % 10 Temperature ℃ 70 Time min. 120 Cahrge H2O2 % NaOH % Silicate % DTPA %

3.0 1.5 4.0 0.5

Consume H2O2 % 1.76 Final PH 10.2

Hydrogen Peroxide Bleaching

Brightness 59.2

Stage Chemical charge Consistency Temperature Time 1. Impregnation

NaOH 3% H2O2 1% Silicate 4% DTPA 0.5%

18 – 24%

80℃ Pressure 2 bar

20 min

2. Primary refiner 3. Secondary refiner 4. Hydrogen peroxide Bleaching

H2O2 3.0% NaOH 1.5%

Silicate 4.0 % DTPA 0.5%

10%

70℃

120min

6 Jute Chemical Pulp 6-1 Manufacturing Process of Chemical Pulp 6-1-1 Manufacturing Process 6-1-1-1 Reception of Raw Materials The green Jute will be reaped and left on the spot to dry. When the water content drops to 20%, the plants will be bundled into a 350mm-diameter and tied with a rope to be transported to the storage area at the Mill. Bundles of Jute will be stored until they are ready to be transported to the chipping plant as per production requirement. The volume of stored Jute is 0.75 ton/m2 of storage space and is 1.35 ton/m2 of floor space used for actual piling. The average water content of Jute upon arrival at the Mill is 10% and is 15% at the time of chipping at the Mill. The estimate period from the time of cultivation to harvesting will be 2.5 months and will establish a regulated schedule for seeding, harvesting, and storing accordingly. The storage space of 110,000m2 within the Mill Site will serve to store 1-year volume of harvest.

6-1-1-2 Cutting & Dust Removal A truck or belt conveyer will be used to transport the 350mm-diameter bundles of Jute from the storage to the processing room. The bundle will be untied and the Jute pieces will be laid on the belt conveyer by manpower. On the way to the drum chipper, Jute pieces will go through a spray of water to wash off dirt and soil. A rotary drum-shaped chipper will then cut the Jute pieces to approximately 30mm in length. Processed chips is, then, sent from the chipper to the dust-separator by a blower. After light dusts are removed, they will be stored in a silo. The standard length of chips is 30 ± 5mm, but Core part of Jute is fragile and will easily crack and break off. On the other hand, Fiber portion is difficult to be cut and chip size is prone to differ. It is essential that chip length be uniform to avoid the problem of fiber getting twisted and turning rope-like inside the Pandia Tube as well as maintaining the stable cooking temperature. Water Content in Jute (at the time of harvesting) % Avg. 75.0 Water Content in Jute (at the time of reception) % Avg. 20.0 Water Content in Jute (After drying at the mill) % Avg. 10.0 Water Content in Jute (at the time of chipping)

after water shower cleaning % Avg. 15.0

Storing volume (against total space) ADT/m2 0.75 Storing volume (against actual space taken for piling) ADT/m2 1.35 Consumed volume of Whole Stem Jute ADT/D 237.8 (moi.10%) Consumed volume of Whole Stem Jute ADT/Yr 81,565(moi.10%) Volume weight of Whole Stem Jute Kg/m3 Avg. 150 Chip density Kg/m3 240 Volume weight of chips Kg/m3 77(moi.15%) Length of chips mm 30±5 Material loss (dust, etc.) % 4.0 Raw material storage on Mill site ha 11.0

108,754m2=81,565.4ADT/0.75ADT/m2

6-1-1-3 Cooking Process The kraft pulping is a mainstream about the chemical pulping process of woods. In kraft pulping process, caustic soda and sodium sulfide are used as cooking chemicals. The hydro-sulfide ion that results by the hydrolysis of sulphuration soda in kraft process reacts with lignin and can remove lignin extremely strongly. However, there is such a problem that the kraft process releases the stench such as hydrogen sulfide, metyl-mercaptan, and the cost of the equipment of f preventing the foul-smelling dispersion is needed. On the other hand, there is such a report that the cooking of the core of the kenaf was more difficultwith, only soda, although non-wood is low easy a comparison, because the lignin is nonexistent more little in comparison with wood. Therefore, Cooking Process proposed to use is the Soda Anthoraquinone (AQ) method The quality comparative test result of the jute pulp of Soda-AQ and Kraft Process are entered in BCIC report page 33-37. There is not a big difference about the pulp quality by the cooking method of both, if the difference of the Kappa number and freeness value is considered. From BCIC Report page 34-37,70

soda-AQ Process Kraft process 試験条件：液比 1:4 1:4

AQ Charge 0.05% 0 NaOH (asNa2O) 16% 16%

Sulfidity 22% Cooking temperature 170℃ 170℃

Cooking time 90 minutes 120 minutes Pulping of Whole Jute

PH

K. No.

Yield %

Burst Index

Kpam2/g

Tear Index

mNm2/g

Tensile Index KN/m

Dnsity Kg/m3

Freeness °ＳＲ

Soda-AQ 10.81 22.1 47.00 2.53 9.60 45.21 520 17 Kraft 10.55 19.05 47.00 3.81 13.41 67.77 525 18

Any Cooking System will be suitable for cooking Non-Wood Pulping including Jute / Kenaf. However, from the viewpoint of production, environment, and profit, the selection is made the following continuous digester, namely, Asthma, Pandia, and M&D models. Each of these models has good and bad points, and the selection will depend on case-by-case conditions, however, Pandia model is selected for the purpose of this report. The structure of Pandia is simple; and therefore, the maintenance will be easy. Asthma, on the other hand, has an advantage over others to process all types of raw materials, but the cost of installation is quite high. Not only will it process such plant materials as Jute / Kenaf and Bagasse, Asthma is most suitable for the digesting process of wood chips such as eucalyptus, which is in the plans for the future.

As for the M&D model, from its structural feature of utilizing flight conveyer, the raw materials are less likely to get twisted, but on the other hand, it is sensitive to abrasion caused by soil and sand attached to the Whole Stem Kenaf. Due to the characteristic of Kenaf materials, even if these stems are washed prior to going through the digester, the soil and sand cannot be removed completely. Also, if chipping precision of Kenaf materials is unsatisfactory, excess lengthy fiber will be created during the cooking process, causing the fibers to twist and tangle in the screw filter and rotary valve. This will form a rope-like condition causing trouble that will hinder the operation. As a result, Pandia model is selected on the condition that we suppress the fiber twisting trouble in the boiler by controlling the chipping precision. Additionally, the stored Jute/Kenaf dries after a certain period of time and lose pliability, causing difficulty in dealing with a fixed quantity. In order to ease the handling, water is, sometimes, sprayed on the dry chips to regain pliability, but Jute/Kenaf tend to shrink when water penetrates, and this causes complexity in dealing with a fixed quantity of chips. In any case, it is important to keep in mind that Jute/Kenaf chips and Wood chips are substantially different. Even in the pulping process, Jute/Kenaf is bulky and only 90% of Jute/Kenaf can be treated in the same equipment capacity compared to 100% of wood weight. In addition, due to the content of saponin in Kenaf, it can easily foam up and is likely to cause problems in the washing and bleaching processes. Furthermore, when compared to wood pulp, Kenaf has an extremely filtrated, requiring a special attention to the washing equipment design and the process of papermaking. Kenaf chips from the silo are weighed by the belt conveyor and sent off to the cooking process. Chips are compressed by a screw feeder and act as a plugging agent to seal the internal pressure of digesting tube. At the exit of the feeder, in the inlet chamber, liquid chemical and steam are added to these chips that had been extracted of water and air by the screw feeder and sent off to the digesting tube. This inlet chamber is equipped with a blow-back valve that will shut the feeder exit in the event a blow-back occurs due to insufficient volume of raw materials inside the screw feeder and weakening of sealing effect achieved by plugged up raw material chips. Inside the digesting tube that acts as a compressing vessel, it is possible to alter the cooking time with a gearshift screw, and raw materials are churned and conveyed and made into pulp. Slurry Pulp is diluted by a blower located at the lower part of the tube and sent from blow-valve to the blow-tank. At the blow-tank, exhaust and clear water go through a heat exchange to obtain warm water. Pulp is then sent to the washing facility from the lower part of the blow-tank through the magnet trap. Annual days of operation D/Yr 343 Operation hours per day hrs/D 24 Unbleached pulp - manufacturing volume ADT/Yr 36,460.9=106.3*343 Unbleached pulp - manufacturing volume ADT/D 106.3=101.0/0.95 Unbleached pulp – reserved % 44.7 (after screen) Bleached pulp - manufacturing volume ADT/Yr

34,643.0=101.0ADT/D*343D/Yr Bleached pulp - manufacturing volume ADT/D 101.0 Bleached pulp – reserved % 42.1

Unbleached Whole Stem Jute - original units ADT/PulpTon 2.237=81,565.4/36,460.9 Active Alkali as Na2O (against bone dry chip ) % 16 Kappa No. - 20 Cooking temperature ℃ 170 Cooking pressure Kg/cm2 10 Cooking time min 90 Yield (unbleached ones after screen) % 42.5 Ratio to liquid - 1:4 Apparent Specific Gravity of material Kg/m3 80 before screw feeder Apparent Specific Gravity of material Kg/m3 200 in No.1 digester Apparent Specific Gravity of material Kg/m3 250 in No.2 digester Screw feeder 100BDKg/min（144BDT/D 110KW Pandia vessel 1450φX13600L～3 sets 5.5KWX4 Chip Yield 96 % Cooking Yield 48 % Unbleached Pulp Yield 44.7 % Screening Yield 97 % After screening 42.5 % Delignification Yield 98 % Bleaching Bleaching Yield 97 % Process Yield 95% 42.1 % Dry Pulp Yield 99% NaOH Kg/BDTChip 206.4=1000Kg/T*16%*2*40(NaOH)/62(Na2O) Jute Consumption ADT/D 237.8 (moi.10%)=101.0/0.447 Jute Consumption BDT/D 214.0=237.8*0.9 NaOH Ton/D 44.170=0.2064T/BDT*214.0BDT/D NaOH Kg/ADTBP 437.3=44.170/101ADT/D Alkali Recovery Rate % 90 Alkali Recovery Volume Kg/ADTBP 393.6=437.3*0.90 Supplement Alkali (100%) Kg/ADTBP 43.7=437.3-393.6 Purchase Alkali (100%) Kg/ADTBP 43.7 AQ(SAQ100%) add. Rate % 0.05 （against Bone Dry Chip） AQ(SAQ22%) add. Rate % 0.227=0.05/0.22 （ against Bone Dry Chip） AQ(SAQ22%) add. volume Kg/BDTBDP 5.392=227Kg/Ton/0.421 AQ(SAQ22%) add. Volume Kg/ADTBDP 4.853=5.392*9/10 6-1-1-4 Washing & Screening After removing coarse dusts by high-density cleaner, the pulp from the blow tank is sent for a series of further cleaning by 3 washers. It will then pass through the cleaning chest, and after the knots are removed from the pulp by a vibrating screen, removal of dusts will then

take place by a first-step pressurized screen. The pulp rejected by the first-step screen is sent to the second-step pressurized screen. Accepted pulp then goes back to the first-step screen, and the rejected ones are sent to the vibrating screen. The ones that are rejected by the vibrating screen are disposed. The accepted ones are then processed by the centri cleaner, and those accepted ones will be returned to the second-step screening. The ones that passed the first-step screening are sent for further cleaning done in 4 steps by the centri cleaner. Only the screened pulp is stored in a screen chest. Kenaf contain a large amount of saponin that may cause greater foam troubles than those trees with conifer. It will be necessary to solve this problem by installing a foam breaker in the liquid-reactor tank as well as installing a foam tank. Cleaning washer 3600φX5000L 50m 2～3 sets groups Volume of airtight washer treatment Ton/D･m2 2.5

6-1-1-5 Biological Bleaching If possible to replace a part of the multi-stage bleaching process of the present sequence to the biotechnology process even for difficulty, to obtain the bleached pulp of 85% or more of brightness by, only biotechnology bleaching. It should be able to reduce the effluent load and chlorine charge amount, if it becomes. Biotechnology bleaching has come to be studied as an environmental preservation style bleaching method from such a viewpoint. The 10% of chlorine dioxide consumption volumes of the latter parts are decreasing in the experimental result of BCIC by applying the first step of multi-stage bleaching, in bio-bleaching that used Xylanase in this project. With the factory where embarked on the commercialization of the enzyme bleaching that used Xylanase of a marketing enzyme as, the method that cost of plant and equipment substitutes the oxygen bleaching equipment that is linked in Northern Europe, this bio bleaching system is operated also in Europe, North America. Oji Paper introduced the enzyme bleaching that used Xylanase in 1998 in the Yonago mill for the first time, in Japan. Washing water in xylanase bleaching stage uses it as washing water in countercurrent washer. Beside be collected to the boiler finally and the combustion efficiency is improved and is reduced an effluent load. Considering only the environmental factor, there will be no choice but to employ TCF (Totally Chlorine Free) bleaching process, utilizing oxygen, ozone, and hydrogen peroxide instead of using chemicals such as chlorine. However, the reality is different. It is the worldwide trend to employ ECF (Elementally Chlorine Free) process even though all recognize the importance of adapting TCF process for protecting future environment. Taking into consideration the domestic situation of Bangladesh, profit from this project, and such special bleaching technique required by Jute/Kenaf, propose to have a fore bleaching process of D-E-D, following bio-bleaching Process. Jute/Kenaf contain relatively small amount of lignin and is rather easy to bleach; therefore, the bleaching process should be as simple as possible.

The pulp sent to the screen chest after going through the washing and screening process, will be dehydrated down to 10% consistency by the extractor and valveless filter. Then steam are added to them by a double-roll mixer before they are sent to a medium consistency mixer via medium consistency pulp pump, where Xylanase is added, and then sent to the bio-bleaching tower. Next, the bio-bleached pulp are sent to a blow tank for blowing and to the airtight washer for washing and dehydration before being stocked in the high-consistency tank. Bio-bleaching Pulp consistency % 10 Xylanase L/ADT 1.0 =2 IU/g Temperature ℃ 50 Retention Time min 60 Final pH - 5-8 Kappa No. at entrance - 20.5 Kappa No. at exit - 17.9-18.4 Extractor 3000φX4000L 30m2 3.5Ton/m2 Valveless filter 3600φX5000L 50m2 2.5Ton/m2 Xylanase double washer 3600φX5000L 50m2 2.5Ton/m2 CIO2 washer 3600φX4500L 45m2 2.5Ton/m2 Alkali washer 3600φX5000L 45m2 2.5Ton/m2 CIO2 washer 3600φX5000L 45m2 2.5Ton/m2 The Pulp pulled out from the high-consistency tank will have Chlorine Dioxide added to it by a static mixer and will up-flow through the bleaching tower and sent to the vacuum washer to be washed. Washed Pulp then will have Sodium Hydroxide added to it by mid-consistency pump and will up-flow through the alkali tower and sent to the vacuum washer to be washed. Next, it will pass through the mid-consistency pump and will have Chlorine Dioxide added to it by a mid-consistency mixer. Then it will up-flow through the Chlorine Dioxide tower and washed by the vacuum washer to become the final Pulp product. The final Pulp product is then stored in the high-consistency tank. Bleached pulp ADT/Year 34,643.0=101.0*343 Bleached pulp ADT/Day 101.0 Pulp yield (after bleaching) % 42.5 Unit Consumption of Raw Kenaf Chips ADT/BKPTon 2.35=1/0.425 Chlorine Dioxide (up-flow) Chlorine Dioxide Kg/ADT 10.9 Pulp consistency % 8.0 Retention Time min 60 Temperature ℃ 70 Final pH - 3.5-4.0 Tank capacity m3 70

(66=101.0/0.08/1440*600/0.8(effective)) Alkali extract (up-flow)

Sodium Hydroxide Kg/ADT 20.0 Pulp consistency % 10.0 Retention Time min 60 Temperature ℃ 60 Final pH - 11-12 Tank capacity m3 60

(52=101.0/0.1/1440*60/0.8(effective)) Chlorine dioxide ( up-flow ) Chlorine Dioxide Kg/ADT 4.7 Pulp consistency % 8.0 Retention Time min 60 Temperature ℃ 70 Final pH - 3.5-4 Tank capacity m3 70

(66=101.0/0.8/1440*60/0.8(effective)) Unit Consumption of water supply m3/ADT 100 (including cooking) Unit Consumption of power supply KWh/ADT 450 (including cooking) Unit Consumption of steam supply Ton/ADT 3.2 (including cooking) 6-1-1-6 Manufacturing Process of Bleaching Chemicals Chlorine Dioxide Generation This Pulpmill intended to employ ECF process for bleaching, and as a rule this Pulpmill will not use Chlorine. This Pulpmill will utilize a Manufacturing Method that will not produce a Chlorine as a by-product in the Manufacturing Process of Chlorine Dioxide. In addition, the Pulpmill will avoid a by-product that contains Sulfur, if at all possible, as will use Soda AQ Method for cooking. As a result, the Pulpmill will be using a low Salt Cake unit source of R10 (SVP-SCW：Single Vessel Process-SaLT Cake Wash) Method in the Non-Chlorine Utilization Process. The Production Method will use Sodium Chlorate (NaClO3) as raw material, Methanol as a reducing agent, and Sulphuric Acid as acid. The by-product is Salt Cake. Salt Cake will be used to supplement the cooking chemical.. Chlorine Dioxide Manufacturing Method (R10 Method) ClO2 Ton/D 3.0 Chloric acid soda Ton/ClO2Ton 1.7 Sulphuric acid (98%) Ton/ClO2Ton 0.8 Methanol CH3OH Ton/ClO2Ton 0.2 Steam Ton/ClO2Ton 5.6 By-product (Na2SO4) Ton/ClO2Ton 1.0 Chlorine dioxide (No.1DTower) Kg/ADTBP 10.9 Chlorine dioxide (No.2DTower) Kg/ADTBP 4.7 Chlorine dioxide bleaching process Total Kg/ADTBP 15.6 Chloric acid soda Kg/ADTBP 26.5=1.7Ton/ClO2Ton*15.6Kg ClO2/ADTBP Sulphuric acid (98%) Kg/ADTBP 12.5=0.8Ton/ClO2Ton*15.6Kg ClO2/ADTBP Methanol (CH3OH) Kg/ADTBP 3.1=0.2Ton/ClO2Ton*15.6Kg ClO2/ADTBP

6-1-1-7 Dry Pulp Process Bleached Pulp stored in the high-consistency tank is sent to the finished chest and then sent to the machine chest. Density regulated slurry is dehydrated by a double-wire machine and further squeezed dry of water by 2-step-roll press with felt attached on top and bottom. It is then dried and cut into sheets, which will then be pressed and crated. The dryer to be used will be the most commonly used as Flakt Dryer. Pulp sheets that have been dried to 15% water content will be slit automatically and crated. The crates will then be transported to the storage by a forklift. The storage capacity is 1 month's volume of Pulp. Pulp sheet production ADT/Yr 34,300=100ADT/D*343D/Yr Pulp sheet production ADT/D 100(設計 120=2.16m*49.9m/min*850g/m2*1.44*0.91) Pulp sheet weight g/m2 850 Pulp sheet size mmW*mmL 720*830 Pulp sheet crate size mmW*mmL*mmH 720*830*467.5 Pulp sheet crate weight Kg/Pack 250 Water content % 15.0±1 Number of operating days D/Yr 343 Total efficiency % 90 Operating efficiency % 94 Manufacturing efficiency % 98 Finishing efficiency % 98 Wire Width for pulp sheet machine mm 2,300 Pulp sheet width mm 2,160 Pulp machine design speed m/min Max. 75 Pulp machine operation speed m/min 50 Unit consumption of water supply m3/P.B.Ton 15.0 Unit consumption of power supply KWh/P.B.Ton 180 Unit consumption of steam supply Ton/P.B.Ton 1.6 6-1-1-8 Chemical Recovery In general, the Black Liquor from Non-Wood Materials is high in viscosity compared to its consistency. For this reason, it is inevitable that the degree of concentration is lower than that of Wood Materials. Especially in such Non-Wood Materials as ash, there is a high content of silica, and the Pulpmill must deal with the problem of it attaching to or accumulating in the system. However, due to low content of silica (1-2%) in Kenaf, it is possible to have a closed system. Additionally, because the cooking system will be employing Soda AQ method, dealing with sulfur in the Pulpmill will be kept at a minimum. The Black Liquor (13% density), drained from the Pulp in the Washing Process, is sent from the rare Black Liquor Tank to a 4-effects Evaporator of plate type low consistency Black Liquor Model Vaporizing Boiler, where it is concentrated to 50% consistency, and sent to a Black-Liquor concentrating tank. The concentrated Black Liquor is further concentrated to 65% consistency by cascade evaporator. The smelt formed by the combustion reaction is dissolved inside the dissolving tank with a Weak Liquor produced by the caustic process to form coarse Green Liquor. The Green Liquor purifier will then be used to separate and sediment dregs from the course Green Liquor to produce Clear Green Liquor, which will then produce alkali soda by reacting with calcium oxide with use of a lime slaker. This alkali soda will be cleansed further with White Liquor Cleanser to remove the lime mud.

Only the Clear White Liquor will be used in the cooking process, and the lime mud will be washed, dehydrated, dried, and heated in a kiln to make quicklime. Consistency of rare black liquor after washing % 13 Consistency of rare black liquor after evaporation % 50 Consistency after C/E % 65 Recovery Boiler Exclusive boiler for burning black liquor Produced steam pressure, temperature Kg/cm2*℃ 50*450 Volume of produced Steam T/Hr 16.7 Volume of all solid material processed BDT/D 189.4 Consistency of concentrated black liquor % 65.0 Temperature of exhaust gas ℃ 100 Cascade evaporator m2 200

Electrical Preciptator Solid of black liquor From cooking and bleaching process T/D 123.1=Chip214.0BDT/D(1-0.425) From white liquor T/D 66.3=W/Lq.白液 441.8m3/D*0.15Kg/L 189.4.7T/D Volume of rare black liquor - chip moisture m3/D 37.8=((1/0.85)-1)*214.0 Volume of white liquor m3/D 441.8=214.0*0.16/0.1*80/62 Steam drain m3/D 169.6 Diluted water m3/D 807.7

m3/D 1456.9 Diluted black liquor consistency % 13.0=231.7/1782.3 Lime Kiln CaO Volume of Cao T/D 46.9=441.8m3/D*100/1000*56/62/0.85 White liquor consistency g/L 100 Na2O Lime purity % 85 Lime recovery rate % 75.0 Lime supplement volume Ton/D 11.7=46.9T/D*(1-0.75) Supplement Natural gas m3/ADT 75.9 Lime kiln capacity Ton/D 56.3=46.9*1.2 In case of supplemented by CaCO3 T/D 20.9=46.9T/D*(1-0.75)*100CaCO3/56CaO Causticizing process White Liquor consistency ｇ/L 100 Consumption volume of cooking white liquor m3/D 441.8=44.18T/D/0.100 Water consumption m3/ADT 30.0 Electricity consumption KWh/ADT 300.0 Vacuum Evaporator + causticizing process T/ADT 3.0 Boiler process T/ADT 1.5

6-1-2 Auxiliary Equipment 6-1-2-1 Power Equipment By using the steam from the recovery boiler, generate power by back pressure turbine and use part of the cooking, concentrating black liquor, and Pulp board drying operation. As a back-up, natural gas boiler will be installed. The steam from this natural gas boiler will be used for generating power in the back pressure turbine. Steam will be used as additional heat for processing. Steam consumption volume in each process Cooking&

bleaching pulp sheet chemical

recovery recovery boiler

total

Steam pressure Kg/cm2 13 / 4 4 4 4 Unit consumption of steam T/ADT 3.2 1.6 3.0 1.5 9.3

Steam consumption T/Hr 39.1=9.3*101.0/24 Natural Gas boiler Produced steam pressure, temperature Kg/cm2*℃ 50*450 Produced steam volume T/Hr 20 Natural gas Unit consumption m3/Hr 1,964=(39.1-16.7)/0.65*56.9m3/TonHr Natural gas Consumption m3/ADT 466.7=1.964*24/101 Produced steam volume Recovery boiler T/Hr 16.7 Natural Gas boiler T/Hr 22.4 Total T/Hr 39.1 Power of Feeder back pressure turbine KW 2,500 1 set Mid-pressure steam (for recovery boiler) Kg/cm2*T/H 13* 7.1 Low-pressure steam Kg/cm2*T/H 4*9.6 Power of Back-pressure turbine KW 2,500 1 set Mid-pressure steam (for fuel boiler) Kg/cm2*T/H 4*22.4 6-1-2-2 Compressor Air system supplied from the air center will be separated into three channels - cooking and bleaching, drying, and caustic processing. 4 screw compressor, 25 Nm3/min, will be installed with 1 being reserved for emergencies. Air used for instrumentation and for operation will be separated and the air for instrumentation will be free of moisture and dust. 6-1-3 Electrical Receiving and Transforming Facility and Electrical Equipment For Cooking, Washing, Screening and Bleaching KWh/ADT 400 Drying (dry pulp) KWh/ADT 150 Alkali recovery KWh/ADT 150 Recovery boiler KWh/ADT 130 Other KWh/ADT 30 Total 860 Cooking & bleaching process Power load avg. KW 1,683=400*101.0/24

Pulp sheet process avg. KW 625=150*100/24 Chemical recovery process, etc.avg. KW 1,305=310*101.0/24 Total Power load avg. KW 3,613 Power supply 6.3KV High-Voltage motor 3.3KV Low-Voltage (less than 37KW) 380V Lighting, etc. 220V 6-1-4 Instrumentation and Process Control 6-1-4-1 Automation Guide Instrumentation and automated control system will be selected according to the quality of Pulp. In any rate, the foundation will be an independent style control panel style and will not employ a total control system, having a centralized control operation room. Basically it will be a facility with employees as the axis and will not place much importance in placing workers in departments. As a result , first priority is to minimize the cost of facility investment. 6-1-4-2 Quality Control System Aside from the basis of quality control involving such elements as consistency, flow rate, and temperature in each process, the system will be automatically measure and control “Kappa Number”, degree of whiteness in the bleaching process, and moisture content in the drying process. Instrumentation Work No. of loops Cooking 30 Washing 25 Bleaching 40 Pulp drying 20 Chemical recovery 30 Recovery boiler 30 Chemical production 30 Effluent drainage 10 Total Treatment 215 6-1-5 Water and Effluent The water intaken from the river is first sent to a raw water pond. The fresh water in water pond will be added chemicals by Alminium oxide before dirt and sand are removed and disposed in a sedimentation pond. Clear water will then be stored in the clean water tank to be utilized for the factory purposes. 6-1-5-1 Water Supply Water supply for the Pulpmill is intaken directly from Rio Lempa with 10m3/min pump and stored in a pond. The raw water is then drained to a water pit for removal of soil and sand.

Then a macromolecule flocculant is added and in the sedimentation pond, suspended solid will be flocculated. Cleansed water is stored in a pond and is pumped to cooking, bleaching, caustic processing, and Pulp board processing as necessary. Unit of water supply Average water intake m3/ADT m3/D Cooking, washing, selecting 40 4,424=40*110.6 Bleaching 40 4,040=40*101.0 Drying 15 1,500=15*100.0 Alkali REecovery 30 3,030=30*101.0 Total 125 12,994 Capacity of planned water intake m3/D 13,000 6-1-5-2 Effluent Treatment Effluent volume m3/D Avg. 13,000 Effluent temperature (summer) ℃ 28 The total volume of effluent will be 13,000m3/D. Effluent from the Pulpmill will pass through a drain and be collected in a pond. Large and rough disposing items will be removed by a rotary screen and be neutralized in a neutralized pit. After the effluent passes the first-step clarifier, and activated sludge will be removed in a aeration pit and sent to the secondary clarifier. Treated water will then be drained to the nearby river. Impurities left at the bottom of the refinery will be sludge will be disposed on the Pulp mill site. If the temperature of effluent can rise to nearly 30°C., the bacterial growth inside the Aeration Pit will diminish and there is a threat that the unit consumption of chemical source may rise. If this may be the case, a cooling tower to lower the temperature of the effluent water may be necessary. Effluent water before treatment SS PPM Avg. 350 BOD5 PPM Avg. 290 CODcr PPM Avg. 650 PH - 7～9 Effluent water after treatment SS PPM Avg. 70 BOD5 PPM Avg. 60 CODcr PPM Avg. 335 pH - 7～8 No effluent Regulation Value in Bangladesh Keeping Normal effluent discharge load in South East Asia.

6-1-6 Building Floor space(m2), Extended floor space(m2), Heights, Dimension

①Raw material regulating room, iron reinforced single floor building 400M2 400M2 6M 2,400M3

②Chipping room, iron reinforced single floor building 300M2 300M2 6M 1,800M3 ③Chipping room, iron reinforced 2 stories building

300M2 600M2 17M 5,100M3 ④Steam-disintegration room, 1~3F iron reinforced concrete building, 4F structure 200M2 800M2 30M 6,000M3 ⑤Pulp room, 1~2F iron reinforced concrete building, 3F structure

675M2 2,025M2 26M 17,550M3 ⑥Bleaching room, 1~2F iron reinforced concrete building, 3F structure

750M2 3,000M2 26M 19,500M3 ⑦Pulp drying room, 1F iron reinforced concrete building, 2F structure

2,400M2 4,800M2 15M 36,000M3 ⑧Pulp storage, steel frame single story structure (1 month use) 3,000M2 3,000M2 7M 21,000M3 ⑨Boiler room, iron reinforced concrete 2-story building, including turbine

50M2 1,500M2 15M 11,250M3 ⑩Office, iron reinforced concrete 2-story building

200M2 400M2 8M 1,600M3 ⑪Living welfare facility, iron reinforced concrete 2-story building

300M2 600M2 8M 2,400M3 ⑫Maintenance room, steel frame single story structure

400M2 400M2 8M 3,200M3 ⑬Material storage, steel frame single story structure 200M2 200M2 6M 1,200M3 ⑭Chemical storage, steel frame single story structure 400M2 400M2 6M 2,400M3 6-1-7 Employment Plan This Pulp Mill will be in operation 24 hours a day with 4-shift rotation system employed. No. of employees Shifts x workers Material yard 20 1 × 20

Chipping process 32 4 × 8 Cooking process 12 4 × 3 Washing, screening, bleaching process 16 4 × 4 Pulp sheet manufacturing process 20 4 × 5 Chemical recovery, power generating process 40 4 × 10 Water supply, effluent treatment process 16 4 × 4 Maintenance staff 20 1 × 20 Product shipping staff 8 1 × 8 Storage and shipping management staff 5 1 × 5 Administration management, customer service 20 1 × 20

Total 209

6-2 Investment 6-2-1 Basis of Investment Calculation

Investment is calculated according to the following conditions. ① Machineries shall be purchased outside of Bangladesh and transported to Bangladesh. ②Civil Works can be procured in Bangladesh. Calculation of Investment is based on chapter 7-1 Manufacturing Process. Exchange Rates are applied as follows, 1 US$ = 58TK= 110 JPY The Investment Calculation includes following items,

-- All Facilities are listed in this report -- Engineering Fees, Construction Site Supervising fees and Other Expenses to implement the Project -- Transportation Cost for Machineries -- Import and Export Charges -- Cost for Spare Parts -- Social and Welfare Facilities -- Contingency（for Price Variation of Machineries） -- Additional works -- Pre-Operational Expenses (Investigating fees, F/S Fees） -- Legal Fees (Registration Fees, Establishment fees, Contracting Arrangement, Lawyers Fees) -- Working Capital -- Cost of Land Acquisition

The following costs or expenses are not included in the Investment Calculation. -- Facilities outside of the Mill, Roads and Port Facility, except Water Intake and Effluent facility. -- Inflation -- Money Interest during Construction Period The Investment cost was calculated on the basis of data from the survey in Bangladesh, and Engineering Cost Data of TECHNO FOREST CO., LTD.

6-2-2 Summary of the Facilities 小計 (US$) Raw Materials receiving, seasoning Chipping, Screening Cooking Washing & Screening Enzyme Bleaching Bleaching Dry Pulp Vacuum Evaporator Recovery Boiler Causticizing Kiln Power Receiving, Transforming, Generating Water Intake Effluent Treatment Compressor Spare Parts 46,015,000*0.02=920,000 Civil Works, Architect Works and Foundations for Machineries

270,000 2,440,000 3,729,000 5,518,000 3,210,000 8,956,000 8,045,000 1,602,000 3,782,000 855,000 1,420,000 7,560,000 530,000 1,130,000 350,000 920,000 5,907,000

Direct Construction Cost Total 56,224,000 Engineering Fees Construction Supervising Fees Transportation and Others

3,655,000 3,373,000 1,124,000

Construction Other Cost Total 8,152,000 Total Construction Cost 64,376,000

Others Social and Welfare Facilities Contingency (3% of Total Construction cost for Price Fluctuation）

Additional Works（2% of Total Construction cost）

Pre-Operation Cost（Investigating Cost, F/S Fees) Legal Fees （Registration Fees, Establishment fees, Contract arrangement, lawyers Fees) Working Capital $500/ADTX101ADT/DX180Days Land Acquisition $7,000/haX14ha

150,000 1,931,000 1,287,000 250,000 200,000 9,090,000 98,000

Others Total 13,006,000

Grand Total 77,382,000

6-2-3 Facility Cost Calculation of Each Process 6-2-3-1 Raw materials receiving and seasoning

(US$) Storage yard in the Mill 80,000m2 Truck scale Receiving facility/Transportation conveyor600W*500mL

2 sets

40,000 80,000

150,000 Total 270,000

6-2-3-2 Chipping & Screening

Rotary Drum Chipper 12T/hr Knife grinder 7.5KW Dust separating unit Chip Conveyors Chip Silo 9mφ*15mH concrete 950m3 Discharge Conveyor Steel fabricating 20Ton SS Piping 2,000BM SS Installation 40Ton Electricity 250KW (Low voltage)

2sets 1set 1set 4sets 1set 1set 1set 1set 1set 1set

800,000 10,000 900,000 200,000 60,000 150,000 60,000 30,000 30,000 200,000

Total 2,440,000 6-2-3-3 Cooking

Chip Bin 5m3 SS 800Kg Screw feeder 500mmφ*160KW Pandia Digester 1,450φ*13,600L*5.5KW*Double Discharger Tanks SS 25Ton Agitators Pumps Steel fabricating SS 10Ton, SUS 2Ton Piping SUS 3,000BM, SS 3,000BM Installation 100Ton Electricity 600KW (Low voltage) Instrumentation 25 Loops

1set 1set 3set 1set 1set 1set 1set 1set 1set 1set set set

3,000 500,000 2,000,000 150,000 85,000 20,000 10,000 40,000 141,000 60,000 420,000 300,000

Total 3,729,000

6-2-3-4 Washing & Screening High Density Cleaner 1.5m3/min Vacuum Drum Washer 50m2*30KW @850,000 with repulper 11KW,15KW Foam Breaker 22KW with cyclone Black Liquor Filter 1,200φ*1,200L 2.2KW Filtrated Tanks SS 50Ton Pumps & Blowers Over head Crane 15Ton 11KW Vibrating Screen Knotter 2m2*3.7KW Centrifugal Screens 75KW,30KW Vibrating Screen 3.7KW Centricleaners 4stages 100T/D Thickner with extractor 40m2+50m2 11KW､30KW Tanks 20m3, 15m3, 60m3 Agitators Pumps Pulp conveyer 600W*15,000L*5.5KW Steel fabricating SS 10Ton, SUS 2Ton Piping SUS 4,000BM, SS 2,000BM Installation 25Ton Electricity 1,055KW (Low Voltage) Instrumentation 20 Loops

3sets 3sets 2sets 1set 1set 16sets 1set 3sets 1set 1set 1set 1set 1set 2sets 12sets 1set 1set 1set 1set 1set 1set

20,000 2,550,000 15,000 40,000 100,000 55,000 60,000 90,000 200,000 4,000 130,000 750,000 100,000 18,000 35,000 45,000 45,000 165,000 6,000 850,000 240,000

小計 5,518,000 6-2-3-5 Bleaching Enzyme Bleaching

Extractor 30m2X18.5KW Valveless filter 50m2X22KW Double washer 50m2X22KW Steam Mixer 400φ*2,000L*25KWSUS Feed Tank SUS 30m3 Medium consis. Pump 100T/D 22KW Medium consis. Mixer 100T/D 22KW SUS Enzyme Reactor 50m3 SUS304L Auxiliaries Stock Tank 100m3 SUS304 Enzyme washer filtrated pit 30m3 Concrete

1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set

200,000 500,000 1,500,000 170,000 50,000 120,000 120,000 350,000 100,000 100,000 Civil work

Total 小計 3,210,000 Bleaching

ClO2 Washer 45m2/unit*22KW Alkali Washer 45m2/unit*22KW Medium Con. Pump 100T/D Static Mixer Medium Con.Mixer 100T/D 22KW SUS Enzyme Bleaching HDT 500m3 Concrete Chlorine Dioxide Tower 100m3 Concrete Alkali Tower 100m3 Concrete Chlorine Dioxide Tower 160m3 Concrete High Density Tank 450m3 Concrete Filtrated Pit 30m3 Concrete + Tiles D Tower Agitator 650φ*22KW Rubber Lining Chlorine Dioxide Mixer 700φ*2,200L*30KW Alkali Mixer Double Shaft*22KW*2sets D Tower Top Scraper 3,600φ*22KW EO Tower Top Scraper 3,600φ*22KW D Tower Top Scraper 4,500φ*22KW HDT Agitators 1,300φ*30KW Pumps & Blowers Screw Conveyers 450φ*10,000L*5.5KW Chlorine Dioxide Generator 3.0T/D Steel fabricating SS 10Ton, SUS 5Ton Piping SUS 5,000BM, SS 1,500BM Installation 20Ton Electricity 790KW (Low Voltage) Instrumentation 40 LOOPS

2sets 1set 2sets 1set 1set 1set 1set 1set 1set 1set 3sets 2sets 1set 1set 1set 1set 1set 4sets 20sets 2sets 1set 1set 1set 1set 1set 1set

1,400,000 700,000 230,000 4,000 120,000 100,000 60,000 60,000 80,000 100,000 Civil work 60,000 20,000 24,000 40,000 40,000 45,000 140,000 85,000 50,000 4,300,000 60,000 193,000 12,000 553,000 480,000

Sub Total 8,956,000

6-2-3-6 Dry Pulp Double Wire Machine 2,300W*55KW Squeezing Press High Nip Press Flakt Dryer Hood Air Supply Fan 500m3/min*700mmAQ*90KW Exhaust Fan 800m3/min*85mmAQ*37KW Cutter 130T/D Press & Wrapping 130T/D Chest Agitators 900φ*22KW Pumps Broke Extractor 11KW Over Head Crane 5.0TON*5.5KW Folk Lift 1.5TON Steel fabricating SS 10Ton, SUS 5Ton Piping SUS 4,000BM, SS 2,000BM Installation 300Ton Electricity 810KW (Low Voltage) Instrumentation 15 Loops

1set 1set 1set 1set 1set 1set 1set 1set 4sets 20sets 1set 1set 2sets 1set 1set 1set 1set 1set

900,000 900,000 3,500,000 250,000 20,000 10,000 450,000 450,000 61,000 125,000 100,000 100,000 50,000 60,000 142,000 180,000 567,000 180,000

Total 8,045,000 6-2-3-7 Chemical Recovery

Vacuum Evaporator 4 effects Weak Liquor Tank 400m3 8500φX7000H High Con. Black TK 180m3 5500φX7600H Pumps Steel fabricating SS 10Ton Piping SS 4,000BM Installation 25Ton Electricity 175KW (Low Voltage) Instrumentation 20 Loops

1set 1set 1set 14sets 1set 1set 1set 1set 1set

800,000 200,000 100,000 47,000 30,000 48,000 15,000 122,000 240,000

Total 1,602,000

Recovery Boiler Recovery Boiler 50Kg/Cm2 100ADT/D Electric Precipitator Stack Concrete 45m High Duct Work for Boiler Steel fabricating SS15Ton, SUS 3Ton Piping SS 5,000BM, SUS 1,000BM Steam Piping SS 5,000BM Installation Auxiliary only 20 Ton Electricity without Boiler 250KW Instrumentation without Boiler 25 Loops

1set 1set 1set 1set 1set 1set 1set 1set 1set 1set

2,500,000 300,000 100,000 100,000 70,000 90,000 60,000 12,000 250,000 300,000

Total 3,782,000 Causticizing

Green Liquor Clarifier SS 200M3 1.5KW Dregs Filter 1,000φ*1,000L 0.75KW Lime slaker 2,000φ*2,000H 1.5KW Causticizer 20m3 Lime Mud Washer 1.5KW White Liquor Clarifier 300m3 5KW、3.7KW Lime Mud Filter 2,000φ*1,500L 2.2KW Tanks／ 1,200φ*1,400H,1,350φ*2,000H,100m3 Others Pumps Screw Conveyers 2T/H 2.2KW Steel fabricating SS 5Ton, SUS 5Ton Piping SS 2,500BM, SUS 3,000BM Installation 30 Ton Electricity 150KW (Low Voltage) Instrumentation 20 LOOPS

1set 1set 1set 3sets 1set 1set 1set 3sets 1set 12sets 3sets 1set 1set 1set 1set 1set

50,000 15,000 20,000 20,000 15,000 100,000 35,000 20,000 5,000 10,000 5,000 40,000 150,000 20,000 150,000 200,000

Total 855,000

Kiln Lime Crasher 3T/H 22KW Lime Stone Crasher 22KW、100KW Rotary Kiln 2,500mmφ*70,000mmL Exhaust Gas Scrubber 300m3/min､SUS Lime Stone Hopper 10m3、0.2KW､0.2KW Lime Stone Storage 50m3、0.2KW､0.1KW Incinerated Lime Hopper 24m3 Tank 6m3 Pumps & Fans Conveyer 4T/H,5T/H、2.2KW Shovel Loader Lime Mud Steel fabricating SS 5Ton Piping SS 2,000BM SUS 1,000BM Installation 200 Ton Electricity 250KW (Low Voltage) Instrumentation 15 Loops

1set 1set 1set 1set 1set 1set 1set 1set 4sets 4sets 1set 1set 1set 1set 1set 1set

20,000 50,000 600,000 50,000 10,000 20,000 10,000 10,000 5,000 110,000 20,000 15,000 50,000 100,000 200,000 150,000

Total 1,420,000 6-2-3-8 Gas Boiler, Electricity Receiving & Transformer Facility

Natural Gas Boiler 50Kg/Cm2 450℃

Steam 20T/Hr Duct work Steel fabricating SS15Ton, SUS 3Ton Piping SS 5,000BM, SUS 1,000BM Steam Piping SS 5,000BM Installation 20 Ton Electricity without Boiler 250KW Instrumentation without Boiler 25 Loops

1set 1set 1set 1set 1set 1set 1set 1set

2,000,000 100,000 45,000 95,000 60,000 10,000 250,000 300,000

Sub-Total 2,860,000 Electricity Generator

Extracted Back Pressure Turbine for Recovery Boiler AC Generator 2,500KWＸ4000V。

Back Pressure Turbine for Gas Boiler AC Generator 2,500KWＸ4000V。

Electricity

1,900,000 1,900,000 200,000

Sub-Total 4,000,000 Receiving, Transformer Facility

30KV outside, Open Type Cable,Trans,Bass Duct,Switch & etc

1set

700,000

Sub-Total 700,000

Total 7,560,000 6-2-3-9 Auxiliary Water Intake Facility (13,000m3/D)

Water Pond 5,000m3 Stone Lining Water Intake Pump 10m3/minX10mX45KW Water Pit Concrete 100m3 Water Pump 10m3/minX10mX45KW Flocculant Sedimentation Pit Concrete 100m3 Water Pump 3.0m3/min*30m*30KW Steel fabricating SS 2Ton Piping SS 4,000BM Installation 5 Ton Electricity 150KW

1set 1set 1set 2sets 1set 4sets 1set 1set 1set 1set

200,000 20,000 35,000 20,000 35,000 10,000 8,000 48,000 4,000 150,000

Total 小計 530,000 Effluent Treatment Facility (13,000m3/D)

Effluent Pit 15m3 Conical Filter 3.7KW Neutralized Pit 20m3 Primary Clarifier 25mDia. 11KW Aeration Pit 2,500m3 110KW Secondary clarifier 25mDia. 11KW Chemical Supply Unit 10KW Pumps Belt Filter 30KW Steel fabricating SS 2Ton Piping SS 10,000BM Installation 8 Ton Electricity 280KW (Low Voltage) Instrumentation 5 Loops

1set 1set 1set 2sets 1set 2sets 1set 6sets 1set 1set 1set 1set 1set 1set

25,000 25,000 35,000 100,000 250,000 100,000 10,000 60,000 100,000 10,000 100,000 5,000 250,000 60,000

Total 1,130,000 Others

Compressor 25 Nm3/min Receiver Tank, Air Dryer Spare parts, Tools, etc

3set 1set 1set

300,000 50,000 920,000

Total 1,270,000

6-2-3-9 Civil Engineering & Architect Work Overall Area Unit Cost No. Cost Raw Material Preparation Room Chipping Room Chip Screening Room Cooking Room Pulping Room Bleaching Room Pulp Drying Room Pulp Warehouse Recovery Boiler Room Office Social & Welfare facility Maintenance Room Material Warehouse Chemical Warehouse

400m2 300m2 600m2 800m2 2,025m2 3,000m2 4,800m2 3,000m2 1,500m2 400m2 600m2 400m2 200m2 400m2

@250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @350$/m2 @350$/m2 @250$/m2 @250$/m2 @250$/m2

1 1 1 1 1 1 1 1 1 1 1 1 1 1

Total

100,000 75,000 150,000 200,000 507,000 750,000 1,200,000 750,000 375,000 140,000 210,000 100,000 50,000 100,000 4,707,000

Foundation for Machineries 1set Civil works around the site/Sewer, Fence, etc 1set

900,000 300,000

Total 1,200,000 Civil and Construction Total 5,907,000

Direct Construction Cost Total 7-2-3-1～7-2-3-9 Direct Cost 56,224,000

6-2-3-10 Others

Engineering Fees 1set 6.5% of Direct Construction Cost

3,655,000

Construction Managing Cost 1set 6.0% of Direct Construction Cost (Supervising Fees, Site Management, Consulting Fees, Insurance Project Implementation Cost, Temporary Facility)

3,373,000

Transportation & etc 1set 2.0% of Direct Construction Cost

1,124,000

Total 8,152,000


Social and Welfare facility 1set 150,000

Contingency (Preparation for Machineries Variable) 1set 3.0% of Total Construction Cost

1,931,000

Additional Works 1set 2.0% of Total Construction Cost

1,287,000

Pre-Operation Expenses (Investigating Fees, F/S Fees)1set 250,000 Legal Expenses 1set (Registration, Establishment, Contracting Arrangement, Lawyer)

200,000

Working Capital $500/ADTX101ADT/DX180Days 9,090,000 Land Acquisition $7,000/haX14ha 98,000 Total 13,006,000

6-3 .Profitability 6-3-1 Basis for Profit & Loss Calculation The Profit Calculation of this Project is based on the Manufacturing Cost Analysis by Techno-Forest Co Operation Ratio, related to Productivity, is assumed Normal Operation, after having a reasonable Trial Operation. The Exchange Rate used in the Calculation is as follows ;

US$1.00 = 58TK = Japanese ¥ 110 Pulpmill’s Manufacturing Cost is consisted of the Variable Costs, including Materials, Electricity, Steam, Chemicals, Transporting Equipment as well as Packing Costs and the Fixed Costs including Wages, Maintenance Costs and Mill’s Administrative Cost. Total Manufacturing is consisted of the Variable Costs, Fixed Costs and Head Office Cost, including Interest, Selling Expenses and Transportation Costs. Depreciation Cost is calculated on Straight Line Method. Basis for Cost Calculation is on domestic Sales in Bangladesh. Total Assets is estimated US$77,382,000, which is consisted as follows ;

Capital Contribution US$10,000,000 Loan Arrangement US$67,382,000

Loan Arrangement were considered in the following way; If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country. Loan Interest Rate Terms Grace Period

0.9% 30 years 10 years In case of local Pulp Sales, VAT (15%) may be applicable on basis of Pulp Tariff Value but there is no study on actual transaction of Pulp so that in this study, VAT is not included in the Head Office Cost. Manufacturing Cost Table 6-3-7 is to be made, when Pulp mill is in stable for Manufacturing and Selling. Depreciation Terms are 20 years for Machineries and 30 years for Building Facilities, and further Final Book Value is considered 10% and 5%. Fig. 6-3-8 is for Profit & Loss and Cash flow. Operation Ratio is estimated for each year, and apply Profit and Depreciation amount to a repayment of the Loan. This Figure shows Profit & Loss for each year.

6-3-2 Variable Costs 6-3-2-1 Raw Materials Material Price at Pulp mill $68.97/BDT = $62.07/ADT

(including Storage and Handling) 6-3-2-2 Energy Steam Steam for Cooking, Bleaching, Drying, and for the Evaporation Boilers will be generated and supplied by Recovery Boiler and Natural Gas Boiler. Recovery Boiler: T/Hr 16.7

Fuel Oil Boiler: T/Hr 22.4 Natural Gas Consumption : m3/Hr 1,964=(39.1-16.7)/0.65*56.9m3/TonHr Natural Gas Consumption : m3/ADT 466.7=1,964*24/101

Natural Gas $/Km3 67.76 Energy Costs: $/ADT 31.94=67.76*0.4667 Electricity

Purchased electricity fee: $/KWH 0.0691 Unit of electricity source: KWH/ADT 860 Purchased electricity volume: KWH/ADT 0 (On premise that100% electricity is privately generated)

Electricity cost: $/ADT 0.00

Digesting, washing, screening, bleaching: KWh/ADT 400 Drying (dry pulp) KWh/ADT 150

Ａalkali Recovery (direct caustic process) KWh/ADT 150

Recovery Boiler KWh/ADT 130 Miscellaneous 30

Total 860 Heavy oil (for kiln)

Natural Gas: $/KM3 67.76 Kiln fuel aid: m3/ADT 75.90 Kiln Natural Gas cost: $/ADT 5.19=67.76*0.0759

6-3-2-3 Chemicals Chlorine Dioxideused in Bleaching Process will be self produced. Xylanase as bio-bleaching and other chemicals will be procured in Bangladesh.

In Bangladesh In India Xylanase $/L 5.00 5.00 NaOH(100%) $/T 414.00 348.00 Anthoraquinon $/T 3,450.00 2,170 NaClO3 $/T 1,000.00 608.00 H2SO4(98%) $/T 138.00 87.00 CH3OH $/T 1310.00 283.00 Lime $/T 27.38 16.30 Slime control $/kg 9.50 8.70

6-3-2-4 Supply and Packing Costs The Cost of Supplies such as Conveyor Belt, Chipper Knife, Screen Plate, Washer Wire, Screen Basket, Pulp Machine Wire, and Felt up to the Bleaching Process is $8.00/ADT and $6.00/ADT in Pulp Sheet Process. Supply Cost

Bleached Pulp $8.00 /ADT Pulp Sheet $6.00 /ADT

6-3-2-5 Utilities The water supply for industrial purposes will be taken from the river. For other purposes, water will be taken from the newly built well on site.

River water cost: $/m3 0.01 sulfuric acid band fee Effluent treatment fee: $/m3 0.02 pH control, cohesion drugs Electricity Cost is included in Energy Costs.

6-3-3 Fixed Costs 6-3-3-1 Labor Cost 209 Workers will be employed, the Annual Labor costs will be $841,000/Yr. including the Costs of Social Security and Insurance. Annual Salary ($) No. of Positions

Mill Managers 20,000 2 40,000 Production Manager 14,000 3 42,000 Supervisor 1,800 18 32,400 Employee 1,200 166 199,200 Field Workers 745 20 14,900

Total annual cost $328,500 6-3-3-2 Maintenance Costs Repairing Parts are budgeted at 2% of the Equipment Costs and will be kept as spare parts in the storage.

Parts Costs for repair :

Slurry pulp - $8.00 /ADT Pulp sheet - $5.00 /ADT

The Maintenance Staff conduct simple repairs but Specialized Mechanical Engineer will be hired for Periodic Maintenance.

Costs of out-source maintenance: Slurry pulp - $5.00 /ADT

Pulp sheet - $5.00 /ADT 6-3-3-3 Depreciation Costs The Straight-Line Method will be applied for calculating the depreciation costs.

Terms Book Value Depreciation Rate

Machinery 20 Years 10% 4.5% Building facilities 30 Years 5% 3.17%

Construction period is expected to take 3 years and the first year of payment will commence on the 4th year after the commencement of the Project.

Investment Depreciation Rate

Annual Depreciation

Costs

Machinery $58,469,000 4.5% $2,613,105 Building Facilities

$ 5,907,000 3.17% $187,055

o Total $64,376,000 $2,818,160 6-3-3-4 Interest Loan : $67,382,000

Terms : 30 years Grace Period ; 10 years Interest Rate : 0.9% P.A Payment starts on the commencement of Operation.

If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country. Source of Funds

Capital: $10,000,000 Loan: $67,382,000

Total Investment Facility Investment Sum: $64,376,000 Social Welfare: $150,000 Reserve : $1,931,000

(Fluctuation of Currency Exchange rate / 3% of Facility costs) Additional Work Costs: $1,287,000 (2% of Facility costs)

Pre-operation Expenses: $250,000 ( Survey and Others ) Legal Fees: $200,000

Working Capital: $9,090,000 =$500/ADTX101ADT/DX180Days

Land Purchase: $98,000 ($7,000/haX14ha)

6-3-3-5 Administration Cost and Selling Expenses Administration Cost $5.00/ADT Selling Expenses $10 (2% of $500).

6-3-4 Transportation Costs Domestic sale Inland freight $/ADT 5.00

Exports Truck from Mill to Port : $/ADT 5.00 Ship Loading Cost : $/ADT 5.00 Sea Freight (Bangladesh to Europe/Japan) $/ADT 70.00

6-3-5 Selling Price and Turn-Over Selling Price for Domestic estimated at $600-660/ADT.

Selling Price for Export estimated at $500ADT

6-3-6 Taxation Export Subsidy: Not considered Corporate tax: 37.5% of Operating Profit

Local Taxes Not considered 6-3-7 Manufacturing Costs

Refer to attached 6-3-7 (Case 1 - 4) Manufacturing Cost Charts.

Case1 Bio-Bleaching X-D-E-DChemical Price in Bangladesh Jute

Dry pulp production 100 ADt/D 34,300 ADt/YearBleached pulp production 101 ADt/D 34,643 ADt/Year

Unit price Unit consumption Cost %/TotalCostVariable Cost US$/ADT

Raw material Juet(100%) 62.07 US$/ADT 2.38 ADT/ADT 147.43 33.9%0.421 Yield

Energy Steam/Natural gas 67.76 US$/Km3 466.69 m3/T 31.94 Kiln/Natural Gas 67.76 US$/Km3 75.90 m3/T 5.19 Electric power Self generated Electricity Sub-total 37.14 8.5%

Chemical Cooking Caustic Soda(100%) 414.00 US$/T 43.70 kg/ADT 18.27

Anthraquinone(22%) 759.00 US$/T 4.85 kg/ADT 3.72 Bleaching Enzyme 5.00 US$/L 1.00 L/ADT 5.05

ClO2 NaClO3 1,000.00 US$/T 26.50 kg/ADT 26.77 ClO2 H2SO4 138.00 US$/T 12.47 kg/ADT 1.74 ClO2 CH3OH 1,310.00 US$/T 3.12 kg/ADT 4.13 Caustic Soda(100%) 414.00 US$/T 20.00 kg/ADT 8.36

Kiln Lime 27.38 US$/T 206.90 kg/ADT 5.72 Dry pulp Slime control 9.50 US$/kg 0.10 kg/ADT 0.96

Antiseptic agent etc 5.05 Sub-total 79.77 18.4%

Others Water Supply 0.010 US$/m3 129.00 m3/ADT 1.29 Effluent 0.020 129.00 2.58 Other: Pulping Recovery division: wire/screen plate 8.00 Others: Dry pulp division wire, felt, canvas 6.00 Sub-total 17.87 4.1%

Total Variable Cost 282.21 64.9%Fix cost US$/Year Number Wages

Wages Mill manager 20,000 2 40,000 Production manager 14,000 3 42,000 Supervisor 1,800 18 32,400 Employee 1,200 166 199,200 Field worker 745 20 14,900 Sub-total 209 328,500 9.58 2.2%

Maintenance Maintenance material 13.00 Maintenance cost 10.00 Sub-total 23.00 5.3%

Investment DepreciationDepreciation Machinery 20 years 4.50% 58,469,000 2,631,105 76.71

Building facilities 30 years 3.17% 5,907,000 187,055 5.45 Sub-total 64,376,000 2,818,160 82.16 18.9%

Administration 5.00 Total fixed Cost 119.74 27.5%

Total Mill Cost 401.95 92.5%

Head office Cost Interest $67,382,000*0.9/100/34300 17.68Sales cost 2% of sales price 10.00

Inland freight 5.00 Total Head office cost 32.68 7.5%

Total Manufacturing Cost 434.63 100.0%

Sales Unit Price　(Domestic) 600.00

Business Profit 165.37Profit Tax 37.5% 62.01Profit after Tax 103.35Cash Flow 185.52Cash Flow = Profit after Tax + Depreciation

Case2 Bio-Bleaching X-D-E-DChemical Price in India Jute



Raw material Juet(100%) 62.07 US$/ADT 2.38 ADT/ADT 147.43 35.8%0.421 Yield




ClO2 NaClO3 608.00 US$/T 26.50 kg/ADT 16.27 ClO2 H2SO4 87.00 US$/T 12.47 kg/ADT 1.10 ClO2 CH3OH 283.00 US$/T 3.12 kg/ADT 0.89 Caustic Soda(50%) 348.00 US$/T 20.00 kg/ADT 7.03




Total Variable Cost 259.82 63.0%

Fix cost US$/Year Number WagesWages Mill manager 20,000 2 40,000

Production manager 14,000 3 42,000 Supervisor 1,800 18 32,400 Employee 1,200 166 199,200 Field worker 745 20 14,900 Sub-total 209 328,500 9.58 2.3%




Administration 5.00 Total fixed Cost 119.74 29.0%Total Mill Cost 379.56 92.1%

Head office Cost Interest $67,382,000*0.9/100/34300 17.68 Sales cost 2% of sales price 10.00 Inland freight 5.00 Total Head office cost 32.68 7.9%

Total Manufacturing Cost 412.24 100.0%Sales Unit Price　(Domestic) 600.00


Case3 Bio-Bleaching X-D-E-DChemical Price in Bangladesh Kenaf



Raw material Kenaf(100%) 49.66 US$/ADT 2.38 ADT/ADT 117.95 29.1%0.421 Yield




ClO2 NaClO3 1,000.00 US$/T 26.50 kg/ADT 26.77 ClO2 H2SO4 138.00 US$/T 12.47 kg/ADT 1.74 ClO2 CH3OH 1,310.00 US$/T 3.12 kg/ADT 4.13 Caustic Soda(100%) 414.00 US$/T 20.00 kg/ADT 8.36











Head office Cost Interest $67,382,000*0.9/100/34300 17.68Sales cost 2% of sales price 10.00

Inland freight 5.00 Total Head office cost 32.68 8.1%Total Manufacturing Cost 405.15 100.0%



Case4 Bio-Bleaching X-D-E-DChemical Price in India kenaf



Raw material Kenaf(100%) 49.66 US$/ADT 2.38 ADT/ADT 117.95 30.8%0.421 Yield




ClO2 NaClO3 608.00 US$/T 26.50 kg/ADT 16.27 ClO2 H2SO4 87.00 US$/T 12.47 kg/ADT 1.10 ClO2 CH3OH 283.00 US$/T 3.12 kg/ADT 0.89 Caustic Soda(50%) 348.00 US$/T 20.00 kg/ADT 7.03











Head office Cost Interest $67,382,000*0.9/100/34300 17.68 Sales cost 2% of sales price 10.00 Inland freight 5.00 Total Head office cost 32.68 8.5%Total Manufacturing Cost 382.75 100.0%Sales Unit Price　(Domestic) 600.00


6-3-8 Profit and Loss / Cashflow Cashflow Projection, Estimated Profit & Loss, Estimated Balance Sheet were prepared for chemical pulp and mechanical pulp which are shown in the Supplement attached, in order to see the realistic Profitability of the Project. Chemical Pulp Profitability Analysis, made by the use of Financial Factors, such as Cashflow, Profit & Loss and Balance Sheet, had the following Results : Profitability of Chemical Pulp Case 1 Case 2 Case 3 Case 4 A) Return of Asset 3.49 % 3.81 % 3.90 % 4.19 % B) Return of Equity 8.76 % 8.97 % 9.03 % 9.19 % C) IRR 6.93 % 7.60 % 7.81 % 8.44 %

B. Return on Assets ( Profit after Tax / Total Assets ) In 10th Year


6-4 Design Standards ( Unit Consumption ) of Chemical Pulp 6-4-1 Pulp 6-4-1-1 Production and Yield Yearly Working Days D/Yr 343(Shutdown:1Day/MonthX12+10d) Daily Working Hours hrs/D 24 Dry Pulp ADTBDP/D 100.0 (BDP:Bleached Dry Pulp) Dry Pulp ADTBDP/Yr 34,300.0=100.0*343 Dry Pulp Yield % 99.0 Bleached Pulp ADTBP/D 101.0=100.0ADT/D/0.99(Bleachd Pulp) Bleached Pulp ADTBP/Yr 34,643.0=101.0ADT/D*343D/Yr Delignification Yield % 98.0 Bleaching Yield % 97.0 Total % 95.0 Unbleached Pulp ADTUP/D 106.3=101.0/0.95 (Unbleached Pulp) Unbleached Pulp ADTUP/Yr 36,460.9=106.3*343 Chip Yield % 96 Unscreened Screened Cooking Yield % 48 BCIC 47.0% Screened Yield % 97 CTP 48.3% 48.1% Unbleached Yield after Screen % 44.7 *45.0 KPM Plant Data Whole Jute ADTChip/D 237.8 (moi.10%)=106.3/0.447 Whole Jute BDTChip/D 214.0 =237.8*0.9 Whole Jute ADTChip/Yr 81,565.4 (moi.10%)=237.8*343 Total Pulp Yield % 42.5=0.447*0.95 Chip Yield 96% Cooking Yield 43 % Unbleached Yield 44.7% Screened Yield 97 % After Screen 42.5% Delignification Yield 98 % Yield for 95 % 42.1% Bleaching Yield 97 % Bleaching Process Dry Pulp Yield 99%

6-4-1-2 Jute as Pulp Material Jute Harvest BDT/ha 10.0 Jute Harvest ADT/ha 11.1=10.0/0.9

Cultivation Area ha 7,500≒7,348=81565.4/11.1 Jute Purchase Price $/BDT 68.97 1000TK=17.24$/(1-moi75%) Jute Purchase Price $/ADT 62.07=67.97*0.9 Jute Moisture % Avg. 10.0 at Mill Jute Moisture % Avg. 15.0 at Chipping

Storage Area ADT/m2 Avg. 0.75(0.7～0.8) Storage Area (Net) ADT/m2 Avg. 1.35(1.3～1.4) Jute Consumption ADT/D 237.8 (moi.10%)=106.3/0.447 Jute Consumption ADT/Yr 81,565.4 (moi.10%)=237.8*343

Jute Specific Weight Kg/m3 Avg. 150(140～160) Chip Weight Kg/m3 240 Chip Specific Weight Kg/m3 77(moi.15%) Chip Length mm 30±5 Loss Rate of Material % 4.0 ( dust and others ) Storage Yard in Mill ha 11.0 81,565.4/0.75=108,754m2 6-4-1-3 Quality of Pulp Quality Data

BCIC CPPRI Unbleached Unbleached Bleached

Freeness SR 17 32 30 CSF 650 400 440 Density kg/m3 520 640 690 Burst Index kpam2/g 2.53 4.00 3.8 Tear Index mNm2/g 9.60 12.50 9.7 Tensile Index KN/m 45.21 54.5 54.0 Brightness % ISO 80.1 6-4-2 Cooking 6-4-2-1 Cooking Conditions Active Alkali as Na2O % 16 against Bone Dry Chip Kappa No. - 20 Cooking Temperature ℃ 170 Steam Pressure Kg/cm2 10 Cooking Time min 90 Cooking Yield % 48

Liquor/Wood Ratio - 1:4 6-4-2-2 Pandia Continuous Digester Apparent Density at Screw Feeder Kg/m3 80 Apparent Density at No.1 Digester Tube Kg/m3 200 Apparent Density at No.2 Digester Tube Kg/m3 250 Screw Feeder 100BDKg/min（144BDT/D）

50rpm、0.054m3/Rev、110KWINV Pandia Digester 1450φX13600L double～3set

Loading Rate 56% 6-4-2-3 Cooking Chemicals NaOH Kg/BDTChip 206.4=1000Kg/T*16%*2*40(NaOH)/62(Na2O) Jute Consumption BDT/D 214.0=237.8*0.9 NaOH Ton/D 44.170=0.2064T/BDT*214.0BDT/D NaOH Kg/ADTBP 437.3=44.170/101ADT/D Recovery of Alkali % 90 Recovery of Alkali Kg/ADTBP 393.6=437.3*0.90 Supplement Alkali(100%) Kg/ADTBP 43.7=437.3 – 393.6 AQ(SAQ100%)Feed Rate % 0.05（against Bone Dry Chip） AQ(SAQ22%)Feed Rate % 0.227=0.05/0.22 AQ(SAQ22%)Feed Volume Kg/BDTUP 5.078=2.27Kg/Ton/0.447 AQ(SAQ22%)Feed Volume Kg/BDTBDP 5.392=2.27Kg/Ton/0.421 AQ(SAQ22%)Feed Volume Kg/ADTBDP 4.853=5.392*9/10 AQ(SAQ100%) $/Kg 3.45 AQ(SAQ22%) $/Kg 0.759

Black Liquor、White Liquor Liquor to Wood Ratio 4 Cooking Liquor m3/D 856.0=214.0BDT/D*4 Chip Moisture m3/D 37.8=(1/0.85-1)*214.0 White Liquor m3/D 414.8=214.0*0.16/0.1*80/62asNa2O

Active Alkali Addition (AA) = 16 (as Na2O), White Liquor 100g/L Steam for Heating T/D 169.6=7.1T/H Black Liquor Addition m3/D 206.8=856.0-37.8-441.8-169.6 Black Liquor for Concentration m3/D 649.2=856.0-206.8=27.1m3/Hr 6-4-2-4 Washing Process Vacuum Washer Capacity Ton/D･m2 2.5

Ref. only Rice 1.5

Reed 3.0

Wheat 2.0 Wood 4.0 Kenaf 2.5

6-4-3 Pulp Bleaching Process 6-4-3-1 Bio-bleaching Pulp Density % 10 Xylanase L/ADT 1.0 Retention Time min 60 Kappa No.at Entrance - 20.5 Kappa No.at Exit - 17.9-18.4 Yearly Working Days D/Yr 343 Daily Working Hours hrs/D 24 Bleached Pulp Production ADT/D 101.0 Bleached Pulp Production ADT/Yr 34.643.0=101.0*343 Yield after Bleaching % 42.5 Kenaf, Unit Volume ADT/BKPADTon 2.35=1/0.425 6-4-3-2 Bleaching Facility Chlorine Dioxide (Up-Flow) Chlorine Dioxide Kg/ADT 10.91 BCIC 28.7kg(as actve Cl2)/2.63 Pulp Density % 8.0 Retention Time min 60 Temperature ℃ 70 Final pH - 3.5-4.0 Tank Capacity m3 100 (66=101.0/0.08/1440*60/0.8(effective)) Alkali Extraction (Up Flow) Caustic Soda Kg/ADT 20.0 Pulp Density % 10.0 Retention Time min 90 Temperature ℃ 60 Final pH - 11-12 Tank Capacity m3 100 (52=101.0/0.1/1440*60/0.8(effective)) Chlorine Dioxide (Up Flow) Chlorine Dioxide Kg/ADT 4.68 BCIC 12.3kg(as actve Cl2)/2.63 Pulp Density % 8.0 Retention Time min 60 Temperature ℃ 70 Final pH - 3.5-4.0 Tank Capacity m3 100 (66=101.0/0.08/1440*60/0.8(effective))

Chlorine Dioxide Production（Ｒ１０ Method ）

Chlorinated Soda Ton/ClO2Ton 1.7 H2SO4(98%) Ton/ClO2Ton 0.8 Methanol CH3OH Ton/ClO2Ton 0.2 Steam Ton/ClO2Ton 5.6 By-Product (Na2SO4) Ton/ClO2Ton 1.0 Chlorine Dioxide(No.1DTower) Kg/ADTBP 10.91 Chlorine Dioxide(No.2DTower) Kg/ADTBP 4.68 Total Chlorine Dioxide at Bleach Process Kg/ADTBP 15.59 Caustic Soda (100%) Kg/ADTBP 20.0 Alkali Tower Chlorinated Soda Kg/ADTBP 26.50=1.7Ton/ClO2Ton*15.59KgClO2/ADTBP H2SO4 (98%) Kg/ADTBP 12.470.8Ton/ClO2Ton*15.59KgClO2/ADTBP Methanol (CH3OH) Kg/ADTBP 3.12=0.2Ton/ClO2Ton*15.59KgClO2/ADTBP Caustic Soda (100%) Kg/ADTBP 20.0 Water m3/ADT 80（Include Cooking） Electricity KWh/ADT 450（Inculde Cooking） Steam Ton/ADT 3.2（Include Cooking） 6-4-4 Dry Pulp Process Drainage ﾟSR 25 (After Bleaching, before Beating) Average Fiber Length mm 1.3 Pulp Sheet Weight g/m2 850 Pulp Sheet Size mmW*mmL 720*830 Pulp Sheet Packing mmW*mmL*mmH 720*830*467.5 Pulp Sheet Pack Weight Kg/Pack 250 Moisture % 15.0±1 Working Days D/Yr 343 Working Hours hrs/D 24.0 Total Efficiency % 90 Operating Efficiency % 94 Machine Efficiency % 98 Finishing Efficiency % 98 Pulp Yield % 99.0 Pulp Production ADT 1.01 Pulp Bleached Ton

Pulp Sheet Machine Width mm 2,300 Pulp Sheet Finish Width mm 2,160 Pulp Sheet Machine Speed m/min Max. 50 ( designed ) Pulp Sheet Machine Speed m/min 41.6 ( operating )

Pulp Sheet Production ADT/Yr 34,300=100ADT/D*343D/Yr Pulp Sheet Production ADT/D 100

(Design120=2.16m*49.9m/min*850g/m2*1.44*0.90) Water m3/P.B.Ton 15.0 Electricity KWh/P.B.Ton 180 Steam Ton/P.B.Ton 1.6 6-4-5 Chemical Recovery Process NaOH Kg/BDTChip 206.4=1000Kg/T*16%*2*40(NaOH)/62(Na2O) Jute Consumption BDT/D 214.0=237.8*0.9 NaOH Ton/D 44,170=0.2064T/BDT*214.0BDT/D NaOH Kg/ADTBP 437.3=44,170/101ADT/D Alkali Recovery % 90 Alkali Recovery Kg/ADTBP 393.6=437.3*0.90 Supplement Alkali (100%) Kg/ADTBP 43.7=437.3-393.6 Yearly Working days D/Yr 343 Alkali Recovery Ton/D 39.8=393.6Kg/ADT*101.0ADT/D/1000 Alkali Recovery Ton/Yr 13,651.4=39.8*343

Supplement Natural Gas m3/ADT 75.9 Water m3/ADT 30.0 Electricity KWh/ADT 300.0 Steam Ton/ADT 3.0 ( Concentration and Causticizing ) Steam Ton/ADT 1.5 ( In Boiler ) Total Ton/ADT 4.5 Steam Consumption T/Hr 18.9=4.5*101.0/24 6-4-5-1 Black Liquor Concentration Dilution Black Liquor Density % 13 ( After Washing ) Black Liquor Density % 50 ( After Vaccum Evaporator ) Black Liquor Density aft. C/E % 65

Black Liquor Chip Moisture m3/D 37.82

White Liquor m3/D 441.8 Steam drain m3/D 169.6 Dilution Water m3/D 807.7

1456.9m3/D Dilution Black Liquor Density % 13.0=189.4BLS/1456.9

Black Liquor Solid From Cooking/Bleaching BDT/D 123.1=Chip214.02BDT/D(1-0.425) From White Liquor BDT/D 66.3=White441.8m3/D*0.15Kg/L

BDT/D 189.4 Black Liqour Concentration Facility： Plate / Free Flow Type Multiple Efficiency Type

Heating Area m2 2,500

6-4-5-2 Causticizing Facility White Liquor Density g/L 100 White Liquor Consumption m3/D 441.8( for Cooking ) Water m3/ADT 30.0 Electricity KWh/ADT 300.0 Steam (Steam Drum+Causticizing) T/ADT 3.0 Steam T/ADT 1.5 ( for Boiler )

6-4-5-3 Lime Kiln Lime Purity % 85 Lime Recovery % 75

White Lq NaOH CaO Na2O Calcium Oxide T/D 46.9=441.8m3/D*100/1000T/m3*56/62/0.85 Supplement CaO T/D 11.7=46.9T/D*(1-0.75) Supplement CaO Kg/ADT 115.8=11.7/101ADT/D If supplement by Calcium Carbonate T/D 20.9=46.9T/D*(1-0.75)*100CaCO3/56CaO Supplement CaCO3 Kg/ADTBP 206.9=20.9/D/101ADT/D Lime Kiln Capacity T/D 56.3=46.9*1.2

6-4-6 Boiler Facilities 6-4-6-1 Recovery Boiler Black Liquor Boiler Steam Pressure / Temp. Kg/cm2*℃ 50*450 Steam Volume T/Hr 17 Solid Treatment BDT/D 189 Black Liquor Density % 65.0 Temp. of Exhaust Gas ℃ 150 Cascade Evaporator m2 200 Electrostatic Precipitator Black Liquor Solid Cooking/Bleaching BDT/D 123.1=Chip214.0BDT/D(1-0.38) White Liquor BDT/D 66.3=White441.8m3/D*0.15Kg/L

BDT/D 189.4 6-4-6-2 Natural Gas Boiler Natural Gas Boiler Steam Pressure/Temp. Kg/cm2*℃ 50*450 Steam Volume T/Hr 22.4 Natural Gas Consumption L/Hr 1,964=22.4/0.65*56.9L/TonHr Natural Gas Consumption L/ADT 466.7=1,969*24/101 6-4-7 Steam, Electricity, Water 6-4-7-1 Steam

Steam Consume Pressure Ton/ADT Kg/cm2

Cooking, Washing, Bleach 3.2 13/4 13Kg/cm2-1.7T/ADT 4Kg/cm2-1.5T/ADT Drying (Pulp Sheet) 1.6 4 (7.1T/Hr) Concentrate/Causticizing 3.0 4 Boilers 1.5 4 Total 9.3 Steam T/Hr 39.1=9.3*101.0/24 Steam 13Kg/cm2 T/Hr 7.1=1.7*101.0/24 Steam 4Kg/cm2 T/Hr 32.0=7.6*101.0/24 Steam Production Recovery Boiler T/Hr 16.7 Natural Gas Boiler T/Hr 22.4 Total T/Hr 39.1 6-4-7-2 Electricity Electricity Consumption for each Unit Cooking, Washing, Screening and Bleaching KWh/ADT 400 Drying (Pulp Sheet) KWh/ADT 150 Alkali Recovery (Causticizing) KWh/ADT 150 Recovery Boiler KWh/ADT 130 Others 30 Total 860

Cooking, Bleaching avg. KW 1,683=400*101.0/24 Pulp Sheeting avg. KW 625=150*100/24 Chemical Recovery avg. KW 1,305=310*101.0/24 Total Requirement avg. KW 3,613

Electricity can be generated by Steam from Recovery Boiler & Natural Gas Boiler Recovery Boiler Turbines

Steam Pressure/Temp. Kg/cm2*℃ 50*450 Steam T/Hr 16.7 Back Pressure Turbine 13Kg/cm2 - 7.1T/Hr

4Kg/cm2 - 9.6T/ Hr AC Generator 2,500KWＸ4000V Natural Gas Boiler Turbine

Steam Pressure/Temp. Kg/cm2*℃ 50*450 Steam T/Hr 22.4 Back Pressure Turbine 4Kg/cm2-----------------22.4T/Hr AC Generator 2,500KWＸ4000V

Electricity Consumption 3,613 KWX4000V Self Generation 3,613 KW

Electricity Purchase KW 0 Self Generation 100% Electricity Reception, Transforming Facilities

Electricity Supply 6.3KV Hi Voltage Motors 3.3KV Low Voltage Motors 380V ( less than 37KW ) Lighting and Others 220V

6-4-7-3 Water Supply Water Consumption Average In-Take

m3/ADT m3/D Cook/Wash/Screening 40 4,424=40*110.6 Bleaching 40 4,040=40*101.0 Drying 15 1,500=15*100.0 Alkali Recovery 30 3,030=30*101.0 Total 125 12,994 Water Supply Capacity m3/D 13,000 ( Designed ) 6-4-8 Effluent Effluent m3/D Avg. 13,000 Temp. of Effluent ℃ 28 ( Summer ) Original Effluent SS BOD5 CODcr PH PPM Avg. 350 300 650 7 - 9 Treated Effluent

PPM Avg. 70 70 330 7 - 8

6-4-9 Work Forces Wage No.

Mill Manager 20,000$/Yr 2 $ 40,000/Yr Prod.Manager 14,000$/Yr 3 $ 42,000/Yr Chief 1,800$/Yr 18 $ 32,400/Yr Operator 1,200$/Yr 166 $199,200/Yr Yard Operator 745$/Yr 20 $ 14,900/Yr

209 $328,500/Yr The Mill is designed for Facility Industry of 24 Hours Operation and operates in 4 groups with 3 shifts/day.

No. Shift X No. Material Yard 20 1 × 20 Chipping Process 32 4 × 8 Cooking Process 12 4 × 3 Wash/Screen/Bleach Process 1 6 4 × 4 Pulp Sheet Process 20 4 × 5 Chemical Recovery/Power 40 4 × 10 Water Supply/Effluent 16 4 × 4 Maintenance 20 1 × 20 Delivery/Transportation 8 1 × 8 Warehouse/Despatch 5 1 × 5 Administration 20 1 × 20

Total 209

6-4-10 Production Cost 6-4-10-1 Unit Cost applied Jute $/BDT 68.97 at Mill Gate NaOH(100%) $/T 414.00 NaClO3 $/T 1000.00 H2SO4(98%) $/T 138.00 CH3OH $/T 1310.00 AQ $/Kg 3.45 CaCO3 $/T 27.38 Water In-Take $/m3 0.00 Fresh Water $/m3 0.00 Electricity $/KWH 0.0691( for Purchase ) Natural Gas $/Km3 67.76 6-4-10-2 Facility Investment Amount Facility Investment $64,376,000.-

Depreciation STRAIGHT-LINE METHOD Depreciation Last Book Value Depre.Ratio

Machinery 20years 10% 4.50% Construction 30years 5% 3.17%

Inv.Amount Depre.Ratio Annual Amount Machinery $58,469,000.- 4.50% $2,631,105.-/Y Construction $ 5,907,000.- 3.17% $ 187,055.-/Y Total $64,376,000.- $2,818,160.-/Y

* 3 Years for Construction. Depreciation starts in 4th Project Year. *In Bangladesh, Depreciation Year is as follows, but the depreciation is calculated in

this report according to the international average depreciation year. Depreciation Last Book Value Depre.Ratio

Machinery 10years 0% 10% Construction 15years 0% 6.7%

6-4-10-3 Capital and Loan Capital： $10,000,000.- ( Assumption ) Loan ： $67,382,000

Terms : 30 years Grace Period ; 10 years Interest Rate : 0.9% P.A Payment starts on the commencement of

Operation. If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country.

6-4-10-4 Land Acquisition and Working Capital, etc Social welfare 150,000 Contingency 3% on Investment 1,931,000 Additional Works 2% on Investment 1,287,000 Preoperational Expenses ( Investigation, F/S, etc ) 250,000 Legal Fees ( Registration, Establishment, Contracting, etc ) 200,000 Working Capital $500/ADTX101ADT/DX180Days 9,090,000 Land Acquisition $7,000/haX14ha 98,000 Total 13,006,000

6-4-10-5 Tax System Fixed Asset Tax % 0 Income Tax % 37.5（ against Profit ） Property Tax % 0 Import Tax % 22.5(depend on the Commodity) 6-4-10-6 Administration : 2% on Sales 6-4-10-7 Product Selling Price is set at US$600.- 660/Adt in Bangladesh

7. Jute Mechanical Pulp

7-1 Manufacturing Process of Mechanical Pulp 7-1-1 Manufacturing Process 7-1-1-1 Receptions of Raw Materials The green Jute will be reaped and left on the spot to dry. When the water content drops to 20%, the plants will be bundled into a 350mm-diameter and tied with a rope to be transported to the storage area at the Mill site. Bundles of Jute will be stored until they are ready to be transported to the chipping plant according to the production requirement. The volume of stored Jute is 0.75 Ton/M2 of the storage space and is 1.35 Ton/M2 of the floor space used for actual piling. The average water content of Jute is 10% on arrival at the Mill site and is 15% at the time of chipping in the Mill. The estimate period from the time of cultivation to harvesting will be 2.5 months and a regulated schedule will be established for seeding, harvesting, and storing accordingly. The storage space of 60,000M2 within the Mill site will serve to store 1-year volume of the harvest. 7-1-1-2 Cutting & Dust Removal A truck or belt conveyer will be used to transport the 350mm-diameter bundles of Jute from the storage to the processing room. The bundle will be untied and the Jute pieces will be laid on the belt conveyer by manpower. On the way to the drum chipper, Jute pieces will go through a spray of water to wash off dirt and soil. A rotary drum-shaped chipper will then cut the Jute pieces to approximately 30mm in length. Processed chips are, then, sent from the chipper to the dust-separator by a blower. After light dusts are removed, they will be stored in a chip silo. The standard length of chips is 30 ± 5mm, but Core part of Jute is fragile and will easily crack and break off. On the other hand, Fiber portion is difficult to be cut and chip size is prone to differ. Water Content in Jute (at the time of harvesting) % Avg. 75.0 Water Content in Jute (at the time of reception) % Avg. 20.0 Water Content in Jute (After drying at the mill) % Avg. 10.0 Water Content in Jute (at the time of chipping)

after water shower cleaning % Avg. 15.0

Storing volume (against total space) ADT/M2 0.75 Storing volume (against actual space taken for piling) ADT/M2 1.35 Consumed volume of Whole Jute ADT/D 124.5 (moi.10%) Consumed volume of Whole Jute ADT/Yr 42,703.5(moi.10%) Volume weight of Whole Jute Kg/M3 150 Ave Chip density Kg/M3 240 Volume weight of chips Kg/M3 77(moi.15%) Length of chips mm 30±5 Material loss (dust, etc.) % 4.0

Raw material storage at Mill site ha 6.0 56,938M2 = 42,703.5 DT / 0.75 ADT/M2 7-1-1-3 Mechanical Pulping Wood chipping for the Mechanical Pulping are classified as follows ;

Classification Pre-treatment Heating Chemical

Mechanical processing 1st refining 2nd refining

ＲＭＰ Refiner mechanical pulp Over 100℃ Atmospheric pressure (AP) ＴＭＰ Thermo-mechanical pulp Over 100℃ Over 100℃ Over 100℃ ＣＴＭＰ Chemi-thermo-Mechanical pulp Over 100 ℃

Na2SO4/NaOH Atmospheric pressure or Over 100℃ Over 100℃

APMP Alkaline peroxide mechanicalpulp

Impregnation NaOH H2O2 DTPA Silicate

Over 100℃ Over 100℃ Atmospheric pressure

TMP is produced with a steam pressured refining, instead of atmospheric pressure first stage of refining of RMP. In other words, TMP Process is consisted that Chip to be heat-pretreated with a steam, as pretreatment of refining, The bonding between the fiber cell of the chip is softened and refining of the fiber become easy. The long fiber pulp of the good strength characteristic is obtained When a refining temperature exceeds over Glass transition point of lignin, ligin becomes soft. The fiber is separated completely between middle lamella with few energy, without almost receiving fiber damage. Fiber that was separated under this high temperature as a result is covered by a smooth lignin membrane. The fiber strength is weak due to the difficulty of fibrillation and the fiber is not suited for paper manufacture because of low brightness with brown color. This fiber is used for a fiber board . On the other hand, the chip of TMP for paper manufacture is preheated to the temperature that does not exceed the glass transition point of lignin. which exists as glass condition although lignin softens. In this case the fiber is separated between primary wall and outer layer of secondary wall Fiber surface becomes rough and show the nature of the cellulose , in other words, hydrophilic nature. The fiber strength is strong due to the easy of fibrillation and the fiber containing long fiber is suited for paper manufacture. Also Brightness may not be lower in this process. CTMP Process is to produce Pulp with a first pressured refining process after Chemical treatment of Chip and with a second refining with atmospheric pressure. Pulp quality is improved by softening of the chip by heating and chemical treatment. In this study APMP Process will be applied for Jute Mechanical Pulping. This a process of producing Mechanical Pulp by defiberating Chip with the use of hydrogen peroxide and Caustic soda and further with CTMP Process.

The following Pulping and Bleaching Condition is set in this study ;

APMP Process Impregnation and Refining Jute Chip will be washed to take out soils or metals at the chip-washer to protect the refiner from the foreign materials and is sent to the drainer to dehydration. Jute Chip is mixed with Caustic soda, hydrogen peroxide, sodium silicate and DTPA and heated with a steam to 80℃ and sent to Impregnator for treatment of 20 minutes at 80℃ with 2 bar pressure. After Impregnator Jute Chip is sent to Vertical Steaming Vessel with a screw feeder to dehydrate and to remove the surplus Chemicals. Temperature of Jute Chip to be increased to 110 – 125℃ at the pre-heater by using a steam from the first refiner and be kept at the vessel for 2 minutes and sent to the primary pressured refiner. The pressure in the pre-heater is controlled by the discharging of the surplus steam. Pulp is sent to the blow cyclone after the first refining and to decrease pressure to atmospheric condition. Pulp is added dilution water and further sent to the secondary refiner for refining. Pulp is treated with the screen and cleaner. Pulp left on the screen is sent back to the secondary refiner for re-refining. Pulp after the cleaning is to be filtered for 12% concentration. Annual days of operation D/Yr 343 Operation hours per day hrs/D 24 Bleached APMP pulp - manufacturing volume ADT/D 100 Bleached APMP pulp - manufacturing volume ADT/Yr 34,300=100*343 Bleached APMP pulp – Yield % 80.3 Chip Yield 96 % Refining/Washing Yield 88% Bleached APMP Yield 81.1% Bleaching Yield 96% 80.3% Dry Pulp Yield 99%

Stage Chemical charge Consistency Temperature Time 1.Impregnation

NaOH 3.0% H2O2 1.0% Silicate 4.0% DTPA 0.5%

18-24%

80℃ Pressure 2 bar

20min.

2.Primary refiner 3.Secondary refiner 4.Hydrogen eroxide Bleaching

H2O2 3.0% NaOH 1.5%

Silicate 4.0 % DTPA 0.5%

10%

70℃

120min

7-1-1-4 Screening Pulp after refining is sent, though the cleaning chest, to the vibrating screen to take off the knots and the dusts is removed at first-step pressurized screen . The pulp rejected by the first-step screen is sent to the second-step pressurized screen Accepted pulp then goes back to the first-step screen, and the rejected ones are sent to the vibrating screen. Further, the rejects is sent back to the secondary refiner for refining again. The accepted ones are then processed by the centrifugal cleaner, and those accepted ones will be returned to the second-step screening. The ones that passed the first-step screening are sent for further cleaning done in 4 steps by the centrifugal cleaner. Only the screened pulp is stored in a screen chest. 7-1-1-5 Bleaching Pulp sent to the screen Chest after washing and screening process will be dehydrated to 10% concentration and sent to High Density Stock Tank. The Pulp pulled out from the high-consistency tank will have Hydrogen peroxide, Caustic soda, sodium silicate and DTPA added to it by a static mixer and will up-flow through the bleaching tower and sent to the vacuum washer to be washed. The final Pulp product is then stored in the high-consistency tank.

Hydrogen peroxide Bleaching(Up flow) Hydrogen peroxide Kg/ADT 30.0 Caustic soda Kg/ADT 15.0 Sodium silicate Kg/ADT 40.0 DTPA Kg/ADT 5.0 Pulp Consistency % 10.0 Retention time min 120 Temperature ℃ 70 Final PH - 10.2 Tank Capacity M3 110 (105=101.0/0.1/1440*120/0.8(effective))

7-1-2 Auxiliary equipment 7-1-2-1 Power equipment The electricity power is generated by the extracted condensing turbine, using a steam from Natural Gas Boiler and a steam is used as additional heat for the Processing. Steam Consumption volume of each process

Steam pressure Unit consumption Kg/cm2 Of Steam T/ADT

Impregnation 4 0.46 Refining 4 0 Bleaching 4 0.76 Drying (pulp sheet) 4 1.60 Boiler 4 1.50

Total 4.32 Steam Consumption T/Hr 18.2=4.32*101.0/24 Produced steam volume Heat recovery of refiner (30%) 1.22 T/ADT 5.13T/Hr Natural gas boiler (70%) 3.10 T/ADT 13.05T/Hr 4.32 T/ADT 18.18T/Hr Natural gas boiler Produced steam pressure, Temperature Kg/cm2*℃ 50*500 Produced steam volume T/Hr 30.0 Natural gas Unit consumption M3/Hr 2,627.6=30.0/0.65*56.9M3/TonHr Natural gas Consumption M3/ADT 624.4=2627.6*24/101

7-1-2-2 Compressor Air system supplied from the air center will be separated into three channels - cooking and bleaching, drying, and caustic processing. 3 screw compressor, 20 Nm3/min, will be installed with 1 being reserved for emergencies. Air used for instrumentation and for operation will be separated and the air for instrumentation will be free of moisture and dust. 7-1-3 Electrical Receiving and Transforming Facility and Electrical Equipment Impregnation KWh/ADT 30 Refining KWh/ADT 1,100 Blenaching KWh/ADT 40 Drying(dry pulp) KWh/ADT 150 Other KWH/ADT 30

Total 1,350

Impregnation Power load Ave. KW 126 =30*101.0/24 Refining KW 4,629 =1,100*101.0/24 Bleaching KW 168 =40*101.0/24 Drying(dry pulp) KW 631 =150*101.0/24 Other KW 126 =30*101.0/24

Total 5,680

Power supply 6.3KV High-Voltage motor 3.3KV Low-Voltage (less than 37KW) 400V Lighting, etc. 200V Turbine Extracted condensing turbine

AC generator 6,000KWＸ4000V

7-1-4 Instrumentation and Process Control 7-1-4-1 Automation Guide Instrumentation and automated control system will be selected according to the quality of Pulp. In any rate, the foundation will be an independent style control panel style and will not employ a total control system, having a centralized control operation room. Basically it will be a facility with employees as the axis and will not place much importance in placing workers in departments. As a result , first priority is to minimize the cost of facility investment. 7-1-4-2 Quality Control System Aside from the basis of quality control involving such elements as consistency, flow rate, and temperature in each process, the system will be automatically measure and control moisture content in the drying process 7-1-5 Water and Effluent The water intaken from the river is first sent to a raw water pond. The fresh water in water pond will be added chemicals by Alminium oxide before dirt and sand are removed and disposed in a sedimentation pond. Clear water will then be stored in the clean water tank to be utilized for the factory purposes 7-1-5-1 Water Supply Water supply for the Pulpmill is intaken directly from the river with 10M3/min pump and stored in a pond. The raw water is then drained to a water pit for removal of soil and sand. Then a macromolecule flocculant is added and in the sedimentation pond, suspended solid will be flocculated. Cleansed water is stored in a pond and is pumped to impregnation, refining and bleaching processing, and Pulp board processing as necessary.

Unit of water supply Average water intake M3/ADT M3/D

Impregnation 5 640= 5*101/0.8 Refining 5 505= 5*101.0 Bleaching 10 1,010=10*100.0 Drying 15 1,500=15*100.0 Total 35 3,655 Capacity of planned water intake M3/D 6,000 7-1-5-2 Effluent Treatment Effluent volume M3/D Avg. 4,000 Effluent temperature (summer) ℃ 28 The total volume of effluent will be 4,000M3/D. Effluent from the Pulpmill will pass through a drain and be collected in a pond. Large and rough disposing items will be removed by a rotary screen and be neutralized in a neutralized pit. After the effluent passes the first-step

clarifier, and activated sludge will be removed in a aeration pit and sent to the secondary clarifier. Treated water will then be drained to the nearby river. Impurities left at the bottom of the refinery will be sludge will be disposed on the Pulp mill site. If the temperature of effluent can rise to nearly 30°C., the bacterial growth inside the Aeration Pit will diminish and there is a threat that the unit consumption of chemical source may rise. If this may be the case, a cooling tower to lower the temperature of the effluent water may be necessary. No effluent Regulation Value in Bangladesh. Keeping Normal effluent discharge load in South East Asia. 7-1-6 Building

Floor space (M2) ①Raw material impregnation room 400M2 ②Chipping room 300M2 ③Chipping room, iron reinforced 2 stories building 600M2 ④Refining room 800M2 ⑤Screening & Bleaching room 1,000M2 ⑥Pulp drying room 4,800M2 ⑧Pulp Warehouse 3,000M2 ⑨Boiler room 1,000M2 ⑩Office 400M2 ⑪Social welfare facility 600M2 ⑫Maintenance room 400M2 ⑬Material warehouse 200M2 ⑭Chemical warehouse 400M2 7-1-7 Employment Plan This Pulp Mill will be in operation 24 hours a day with 4-shift rotation system employed. No. of employees Shifts x workers Material yard 20 1 × 20

Chipping process 32 4 × 8 Cooking process 12 4 × 3 Screening, bleaching process 12 4 × 3 Pulp sheet manufacturing process 20 4 × 5 Power generating process 16 4 × 4 Water supply, effluent treatment process 16 4 × 4 Maintenance staff 20 1 × 20 Product shipping staff 8 1 × 8 Storage and shipping management staff 5 1 × 5 Administration management, customer service 20 1 × 20

Total 181

7-2 Investment 7-2-1 Basis of Investment Calculation

Investment is calculated according to the following conditions. ① Machineries shall be purchased outside of Bangladesh and transported to Bangladesh. ②Civil Works can be procured in Bangladesh. Calculation of Investment is based on chapter 7-1 Manufacturing Process. Exchange Rates are applied as follows, 1 US$ = 58TK= 110 JPY The Investment Calculation includes following items,

-- All Facilities are listed in this report -- Engineering Fees, Construction Site Supervising fees and Other Expenses to implement the Project -- Transportation Cost for Machineries -- Import and Export Charges -- Cost for Spare Parts -- Social and Welfare Facilities -- Contingency（for Price Variation of Machineries） -- Additional works -- Pre-Operational Expenses (Investigating fees, F/S Fees） -- Legal Fees (Registration Fees, Establishment fees, Contracting Arrangement, Lawyers Fees) -- Working Capital -- Cost of Land Acquisition

The following costs or expenses are not included in the Investment Calculation. -- Facilities outside of the Mill, Roads and Port Facility, except Water Intake and Effluent facility. -- Inflation -- Money Interest during Construction Period

The Investment cost was calculated on the basis of data from the survey in Bangladesh, and Engineering Cost Data of TECHNO FOREST CORP.

7-2-2 Summary of the Facilities 小計 (US$) Raw Materials receiving, seasoning Chipping, Screening APMP Pulping Screening H2O2 Bleaching Dry Pulp Gas Boiler, Power Receiving, Transforming, Generating Water Intake Effluent Treatment Compressor Spare Parts Civil Works, Architect Works and Foundations for Machineries

250,000 2,440,000 9,040,000 2,343,000 3,310,000 8,045,000 9,545,000 466,000 1,030,000 290,000 31,800 4,675,000

Direct Construction Cost Total 41,465,800 Engineering Fees Construction Supervising Fees Transportation and Others

2,695,000 2,488,000 829,000

Construction Other Cost Total 6,012,000 Total Construction Cost 47,477,800

Others Social and Welfare Facilities Contingency (3% of Total Construction cost for Price Fluctuation）

Additional Works（2% of Total Construction cost）

Pre-Operation Cost（Investigating Cost, F/S Fees) Legal Fees （Registration Fees, Establishment fees, Contract arrangement, lawyers Fees) Working Capital $500/ADTX101ADT/DX180Days Land Acquisition $7,000/haX9ha

150,000 1,424,000 950,000 250,000 200,000 9,090,000 63,000

Others Total

12,127,000


7-2-3 Facility Cost Calculation of Each Process 7-2-3-1 Raw materials receiving and seasoning

(US$) Storage yard in the Mill 40,000m2 Truck scale Receiving facility/Transportation conveyor600W*500mL

2 sets

20,000 80,000

150,000 Total 250,000

7-2-3-2 Chipping & Screening Rotary Drum Chipper 12T/hr Knife grinder 7.5KW Dust separating unit Chip Conveyors Chip Silo 9mφ*15mH concrete 950m3 Discharge Conveyor Steel fabricating 20Ton SS Piping 2,000BM SS Installation 40Ton Electricity 250KW (Low voltage)

2sets 1set 1set 4sets 1set 1set 1set 1set 1set 1set

800,000 10,000 900,000 200,000 60,000 150,000 60,000 30,000 30,000 200,000

Total 2,440,000 7-2-3-3 Pulping APMP

Chip Bin 10m3 SS 2000Kg Screw feeder 500mmφ*15KW Chip Washer Drainer Screw Press Impregnator Feed Screw Primary Refiner 5000kw Blow Cyclon & Feeder Secondary Refiner 2500kw Heat recovery System Refiner Chest & Agitator Tanks SUS 25Ton Pumps & Others Steel fabricating SS10Ton, SUS 5Ton Piping SUS 2,800BM, SS3,000BM Installation 300Ton Electricity 450kw(Low voltage), 8000kw(High voltage) Instrumentation 50loops

1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set 1set

10,000 150,000 250,000 200,000 250,000 1,000,000 30,000 1,500,000 300,000 900,000 750,000 20,000 200,000 150,000 100,000 140,000 150,000 2,500,000 350,000

Total 9,040,000

7-2-3-4 Screening Over head Crane 30Ton 22KW Centrifugal Screens 75KW,30KW Tail Cleaner Centricleaners 4stages 100T/D Thickner with extractor 40m2+50m2 11KW､30KW Tanks 20m3,15m3,60m3 Agitators Pumps Pulp conveyer 600W*15,000L*5.5KW Steel fabricating SS 7Ton, SUS 2Ton Piping SUS 4,000BM, SS 1,000BM Installation 10Ton Electricity 450KW (Low Voltage) Instrumentation 15Loops

1set 1set 1set 1set 1set 1set 1sets 10sets 1set 1set 1set 1set 1set 1set

200,000 200,000 15,000 130,000 750,000 100,000 18,000 35,000 45,000 40,000 150,000 10,000 450,000 200,000

小計 2,343,000 7-2-3-5 Bleaching H2O2 Bleaching

Extractor 30m2X18.5KW Valveless filter 50m2X22KW Double washer 50m2X22KW Steam Mixer 400φ*2,000L*25KWSUS Feed Tank SUS 60m3 Medium consis. Pump 100T/D 22KW Medium consis. Mixer 100T/D 22KW SUS Auxiliaries/Chemicals Stock Tank 120m3 SUS304

1set 1set 1set 1set 1set 1set 1set 1set 1set

200,000 500,000 1,500,000 170,000 100,000 120,000 120,000 250,000 350,000

Total 小計 3,310,000

7-2-3-6 Dry Pulp Double Wire Machine 2,300W*55KW Squeezing Press High Nip Press Flakt Dryer Hood Air Supply Fan 500m3/min*700mmAQ*90KW Exhaust Fan 800m3/min*85mmAQ*37KW Cutter 130T/D Press & Wrapping 130T/D Chest Agitators 900φ*22KW Pumps Broke Extractor 11KW Over Head Crane 5.0TON*5.5KW Folk Lift 1.5TON Steel fabricating SS 10Ton, SUS 5Ton Piping SUS 4,000BM, SS 2,000BM Installation 300Ton Electricity 810KW (Low Voltage) Instrumentation 15 Loops

1set 1set 1set 1set 1set 1set 1set 1set 4sets 20sets 1set 1set 2sets 1set 1set 1set 1set 1set

900,000 900,000 3,500,000 250,000 20,000 10,000 450,000 450,000 61,000 125,000 100,000 100,000 50,000 60,000 142,000 180,000 567,000 180,000

Total 8,045,000 7-2-3-7 Gas Boiler, Electricity Receiving & Transformer Facility

Natural Gas Boiler 50Kg/Cm2 450℃

Steam 30T/Hr Auxiliaries / Condenser Duct work Steel fabricating SS15Ton, SUS 3Ton Piping SS 7,000BM, SUS 2,000BM Steam Piping SS 10,000BM Installation 30Ton Electricity without Boiler 300kw Instrumentation without Boiler 25 Loops

1set 1set 1set 1set 1set 1set 1set 1set 1set

3,000,000 500,000 200,000 45,000 150,000 130,000 100,000 300,000 420,000

Sub-Total 4,845,000 Electricity Generator

Extracted Condensing Turbine for Recovery Boiler AC Generator 6,000KWＸ4000V。

Electricity

3,500,000 500,000

Sub-Total 4,000,000 Receiving, Transformer Facility

30KV outside, Open Type Cable,Trans,Bass Duct,Switch & etc

1set

700,000

Sub-Total 700,000

Gas Boiler, Electricity, Receiving & Transformer Facility Total 9,545,000 7-2-3-8 Auxiliary Water Intake Facility (6,000m3/D)

Water Pond 5,000m3 Stone Lining Water Intake Pump 6m3/minX10mX30KW Water Pit Concrete 100m3 Water Pump 6m3/minX10mX30KW Flocculant Sedimentation Pit Concrete 100m3 Water Pump 3.0m3/min*30m*30KW Steel fabricating SS 2Ton Piping SS 4,000BM Installation 5 Ton Electricity 100KW

1set 1set 1set 2sets 1set 3sets 1set 1set 1set 1set

200,000 14,000 35,000 14,000 35,000 8,000 8,000 48,000 4,000 100,000

Total 小計 466,000 Effluent Treatment Facility (6,000m3/D)

Effluent Pit 15m3 Conical Filter 3.7KW Neutralized Pit 20m3 Primary Clarifier 25mDia. 11KW Aeration Pit 1,800m3 80KW Secondary clarifier 25mDia. 11KW Chemical Supply Unit 10KW Pumps Belt Filter 30KW Steel fabricating SS 2Ton Piping SS 10,000BM Installation 8 Ton Electricity 200KW (Low Voltage) Instrumentation 5 Loops

1set 1set 1set 2sets 1set 2sets 1set 6sets 1set 1set 1set 1set 1set 1set

25,000 25,000 35,000 100,000 200,000 100,000 10,000 60,000 100,000 10,000 100,000 5,000 200,000 60,000

Total 1,030,000 Others

Compressor 20 Nm3/min Receiver Tank, Air Dryer Spare parts, Tools, etc

3set 1set 1set

240,000 50,000 31,800

Total 321,800

7-2-3-9 Civil Engineering & Architect Work Overall Area Unit Cost No. Cost Raw Material Preparation Room Chipping Room Chip Screening Room Refining Room Screening & Bleaching Room Pulp Drying Room Pulp Warehouse Boiler Room Office Social & Welfare facility Maintenance Room Material Warehouse Chemical Warehouse

400m2 300m2 600m2 800m2 1,000m2 4,800m2 3,000m2 1,000m2 400m2 600m2 400m2 200m2 400m2

@250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @250$/m2 @350$/m2 @350$/m2 @250$/m2 @250$/m2

1 1 1 1 1 1 1 1 1 1 1 1 1

100,000 75,000 150,000 200,000 250,000 1,200,000 750,000 250,000 140,000 210,000 100,000 50,000 100,000

Total 3,575,000

Foundation for Machineries Civil works around the site/Sewer, Fence, etc

1set 1set

800,000 300,000

Total 1,100,000 Civil and Construction Total 4,675,000

Direct Construction Cost Total 8-2-3-1～8-2-3-9 Direct Cost 41,465,800

7-2-3-10 Others

Engineering Fees 1set 6.5% of Direct Construction Cost

2,695,000

Construction Managing Cost 1set 6.0% of Direct Construction Cost (Supervising Fees, Site Management, Consulting Fees, Insurance Project Implementation Cost, Temporary Facility)

2,488,000

Transportation & etc 1set 2.0% of Direct Construction Cost

829,000

Total 6,012,000


Social and Welfare facility 1set 150,000 Contingency (Preparation for Machineries Variable) 1set 3.0% of Total Construction Cost

1,424,000

Additional Works 1set 2.0% of Total Construction Cost

950,000

Pre-Operation Expenses (Investigating Fees, F/S Fees)1set 250,000 Legal Expenses 1set (Registration, Establishment, Contracting Arrangement, Lawyer)

200,000

Working Capital $500/ADTX101ADT/DX180Days 9,090,000 Land Acquisition $7,000/haX9ha 63,000 Total 12,127,000

7-3.Profitability 7-3-1 Basis for Profit & Loss Calculation The Profit Calculation of this Project is based on the Manufacturing Cost Analysis by Techno-Forest Co Operation Ratio, related to Productivity, is assumed Normal Operation, after having a reasonable Trial Operation. The Exchange Rate used in the Calculation is as follows ;

US$1.00 = 58TK = Japanese ¥ 110 Pulpmill’s Manufacturing Cost is consisted of the Variable Costs, including Materials, Electricity, Steam, Chemicals, Transporting Equipment as well as Packing Costs and the Fixed Costs including Wages, Maintenance Costs and Mill’s Administrative Cost. Total Manufacturing is consisted of the Variable Costs, Fixed Costs and Head Office Cost, including Interest, Selling Expenses and Transportation Costs. Depreciation Cost is calculated on Straight Line Method. Basis for Cost Calculation is on domestic Sales in Bangladesh. Total Assets is estimated US$59,604,800, which is consisted as follows ;

Capital Contribution US$10,000,000 Loan Arrangement US$49,604,800

Loan Arrangement were considered in the following way; If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country. Loan Interest Rate Terms Grace Period

0.9% 30 years 10 years In case of local Pulp Sales, VAT (15%) may be applicable on basis of Pulp Tariff Value but there is no study on actual transaction of Pulp so that in this study, VAT is not included in the Head Office Cost. Manufacturing Cost Table 7-3-7 is to be made, when Pulp mill is in stable for Manufacturing and Selling. Depreciation Terms are 20 years for Machineries and 30 years for Building Facilities, and further Final Book Value is considered 10% and 5%. Fig. 7-3-8 is for Profit & Loss and Cash flow. Operation Ratio is estimated for each year, and apply Profit and Depreciation amount to a repayment of the Loan. This Figure shows Profit & Loss for each year. 7-3-2 Variable Costs 7-3-2-1 Raw Materials Material Price at Pulp mill $68.97/BDT = $62.07/ADT

(including Storage and Handling)

7-3-2-2 Energy Steam Steam for Impregnation, Bleaching and Drying will be generated and supplied by Natural Gas Boiler. Natural Gas Boiler: T/Hr 30.0 Natural Gas Consumption : m3/Hr 2,627=(39.1-16.7)/0.65*56.9m3/TonHr Natural Gas Consumption : m3/ADT 624.4=2,627*24/101

Natural Gas $/Km3 67.76 Energy Costs: $/ADT 42.74=67.76*0.6244 Electricity

Purchased electricity fee: $/KWH 0.0691 Unit of electricity source: KWH/ADT 1,350 Purchased electricity volume: KWH/ADT 0 (On premise that100% electricity is privately generated) Electricity cost: $/ADT 0.00

Impregnation KWh/ADT 30 Refining KWh/ADT 1,100 Bleaching KWh/ADT 40 Drying (dry pulp) KWh/ADT 150 Miscellaneous 30

Total 1,350 7-3-2-3 Chemicals Chlorine Dioxideused in Bleaching Process will be self produced. Xylanase as bio-bleaching and other chemicals will be procured in Bangladesh.

In Bangladesh In India NaOH(100%) $/T 414.00 348.00 H2O2(100%) $/KL 920.00 980.00 Sodium Silicate $/T 260.00 130.00 DTPA $/T 3000.00 3000.00 Slime control $/kg 9.50 8.70

7-3-2-4 Supply and Packing Costs The Cost of Supplies such as Conveyor Belt, Chipper Knife, Refiner Plate, Screen Plate, Washer Wire, Screen Basket, Pulp Machine Wire, and Felt up to the Bleaching Process is $6.00/ADT and $6.00/ADT in Pulp Sheet Process. Supply Cost

Bleached Pulp $6.00 /ADT Pulp Sheet $6.00 /ADT

7-3-2-5 Utilities The water supply for industrial purposes will be taken from the river. For other purposes, water will be taken from the newly built well on site.

River water cost: $/m3 0.01 sulfuric acid band fee Effluent treatment fee: $/m3 0.02 pH control, cohesion drugs Electricity Cost is included in Energy Costs.

7-3-3 Fixed Costs 7-3-3-1 Labor Cost 209 Workers will be employed, the Annual Labor costs will be $841,000/Yr. including the Costs of Social Security and Insurance. Annual Salary ($) No. of Positions

Mill Managers 20,000 2 40,000 Production Manager 14,000 3 42,000 Supervisor 1,800 18 32,400 Employee 1,200 138 165,600 Field Workers 745 20 14,900

Total annual cost $294,900 7-3-3-2 Maintenance Costs Repairing Parts are budgeted at 1% of the Equipment Costs and will be kept as spare parts in the storage.

Parts Costs for repair : Slurry pulp - $5.00 /ADT

Pulp sheet - $5.00 /ADT The Maintenance Staff conduct simple repairs but Specialized Mechanical Engineer will be hired for Periodic Maintenance.

Costs of out-source maintenance: Slurry pulp - $5.00 /ADT

Pulp sheet - $5.00 /ADT 7-3-3-3 Depreciation Costs The Straight-Line Method will be applied for calculating the depreciation costs.

Terms Book Value Depreciation Rate

Machinery 20 Years 10% 4.5% Building facilities 30 Years 5% 3.17%

Construction period is expected to take 3 years and the first year of payment will commence on the 4th year after the commencement of the Project.

Investment Depreciation Rate

Annual Depreciation

Costs

Machinery $42,802,800 4.5% $1,926,126

Building Facilities

$ 4,675,000 3.17% $148,042

o Total $47,477,800 $2,074,168 7-3-3-4 Interest Loan : $49,604,800

Terms : 30 years Grace Period ; 10 years Interest Rate : 0.9% P.A Payment starts

on the commencement of Operation. If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country. Source of Funds

Capital: $10,000,000 Loan: $49,604,800

Total Investment Facility Investment Sum: $47,477,800 Social Welfare: $150,000 Reserve : $1,424,000

(Fluctuation of Currency Exchange rate / 3% of Facility costs) Additional Work Costs: $950,000 (2% of Facility costs)

Pre-operation Expenses: $250,000 ( Survey and Others ) Legal Fees: $200,000 Working Capital: $9,090,000

=$500/ADTX101ADT/DX180Days Land Purchase: $63,000 ($7,000/haX9ha)

7-3-3-5 Administration Cost and Selling Expenses

Administration Cost $5.00/ADT Selling Expenses $8 (2% of $400).

7-3-4 Transportation Costs Domestic sale Inland freight $/ADT 5.00 7-3-5 Selling Price and Turn-Over

Selling Price for Domestic estimated at $400-500/ADT.

7-3-6 Taxation Export Subsidy: Not considered Corporate tax: 37.5% of Operating Profit Local Taxes Not considered

7-3-7 Manufacturing Costs Refer to attached 7-3-7 (Case 1 - 4) Manufacturing Cost Charts.

Case 1 APMPChemical Price in Bangladesh Whole Jute

Dry Bleached pulp production 100 ADt/D 34,300 ADt/YearBleached pulp production 101 ADt/D 34,643 ADt/Year

Unit Price Unit Consumption Cost %/Total CostVariable Cost US$/ADT

Raw Material Jute(100%) 62.07 US$/ADT 1.25 ADT/ADT 77.30 23.3%0.803 Yield

Energy Steam/Natural Gas 67.76 US$/Km3 624.40 m3/T 42.74 Electric power Self generating 0.00 KWH/ADT - Sub-total 42.74 12.9%

Chemical EnzymeNaOH (゙100%) 414.00 60.00 kg/ADT 25.09 H2O2 920.00 US$/KL 25.00 L/ADT 23.23 Sodium Silicate 260.00 US$/T 80.00 kg/ADT 21.01 DTPA 3,000.00 US$/T 1.00 kg/ADT 3.03 Slime control 9.50 US$/kg 0.10 kg/ADT 0.96 Antiseptic agent 5.05 Sub-total 78.37 23.6%

Others Water supply 0.010 US$/m3 60.00 m3/ADT 0.60 Effluent 0.020 60.00 1.20 operating supplies 6.00 packaging 6.00 Sub-total 13.80 4.2%


Fixed Cost US$/Year Number WagesWages Mill manager 20,000 2 40,000





Administration 5.00 Total Fixed Cost 94.07 28.3%Total Mill Cost 306.28 92.2%

Head office costInterest $49,604,800*0.9/100/34300 13.02Sales cost 2％ on sales 8.00Inland freight 5.00

Total Head Office Cost 26.02 7.8%Total Manufacturing Cost 332.29 100.0%


Business Profit 92.71Profit Tax 37.5% 34.77Profit after Tax 57.94Cash Flow 118.41

Case 2 APMPChemical Price in Indea Whole jute


Unit Price Unit Consumption Cost %/Total CosVariable Cost US$/ADT

Raw Material Jute(100%) 62.07 US$/ADT 1.25 ADT/ADT 77.30 24.2%0.803 Yield


Chemical EnzymeNaOH (゙100%) 348.00 US$/T 60.00 kg/ADT 21.09 H2O2 980.00 US$/KL 25.00 L/ADT 24.75 Sodium Silicate 130.00 US$/T 80.00 kg/ADT 10.51 DTPA 3,000.00 US$/T 1.00 kg/ADT 3.03 Slime control 8.70 US$/kg 0.10 kg/ADT 0.88 Antiseptic agent 5.05 Sub-total 65.30 20.5%








Administration 5.00 Total Fixed Cost 94.07 29.5%


Head office cost Interest $49,604,800*0.9/100/34300 13.02Sales cost 2％ on sales 8.00Inland freight 5.00

Total Head Office Cost 26.02 8.1%

Total Manufacturing Cost 319.22 100.0%



Case 3 APMPChemical Price in Bangladesh Whole Kenaf


Unit Price Unit Consumption Cost %/Total CosVariable Cost US$/ADT

Raw Material Kenaf(100%) 49.66 US$/ADT 1.25 ADT/ADT 61.84 19.5%0.803 Yield


Chemical EnzymeNaOH (゙100%) 414.00 60.00 kg/ADT 25.09 H2O2 920.00 US$/KL 25.00 L/ADT 23.23 Sodium Silicate 260.00 US$/T 80.00 kg/ADT 21.01 DTPA 3,000.00 US$/T 1.00 kg/ADT 3.03 Slime control 9.50 US$/kg 0.10 kg/ADT 0.96 Antiseptic agent 5.05 Sub-total 78.37 24.7%










Head office cost Interest $49,604,800*0.9/100/34300 13.02Sales cost 2％ on sales 8.00Inland freight 5.00

Total Head Office Cost 26.02 8.2%

Total Manufacturing Cost 316.83 100.0%Sales Unit Price　(Domestic) 425.00


Case 4 APMPChemical Price in Indea Whole Kenaf


Unit Price Unit Consumption Cost %/Total CosVariable Cost US$/ADTRaw Material Kenaf(100%) 49.66 US$/ADT 1.25 ADT/ADT 61.84 20.4%

0.803 YieldEnergy Steam/Natural Gas 67.76 US$/Km3 624.40 m3/T 42.74

Electric power Self generating 0.00 KWH/ADTSub-total 42.74 14.1%

Chemical EnzymeNaOH (゙100%) 348.00 US$/T 60.00 kg/ADT 21.09 H2O2 980.00 US$/KL 25.00 L/ADT 24.75 Sodium Silicate 130.00 US$/T 80.00 kg/ADT 10.51 DTPA 3,000.00 US$/T 1.00 kg/ADT 3.03 Slime control 8.70 US$/kg 0.10 kg/ADT 0.88 Antiseptic agent 5.05 Sub-total 65.30 21.5%










Head office costInterest $49,604,800*0.9/100/34300 13.02Sales cost 2％ on sales 8.00Inland freight 5.00

Total Head Office Cost 26.02 8.6%Total Manufacturing Cost 303.76 100.0%



7-3-8 Profit and Loss / Cashflow Cashflow Projection, Estimated Profit & Loss, Estimated Balance Sheet were prepared for Mechanical Pulp which are shown in the Supplement attached, in order to see the realistic Profitability of the Project. Mechanical pulp Profitability Analysis, made by the use of Financial Factors, such as Cashflow, Profit & Loss and Balance Sheet, had the following Results :

Profitability of Mechanical Pulp Case 1 Case 2 Case 3 Case 4 A) Return of Asset 2.77 % 3.06 % 3.11 % 3.37 % B) Return of Equity 7.42 % 7.73 % 7.78 % 8.03 % C) IRR 5.36 % 5.92 % 6.03 % 6.56 %

C. Return on Assets ( Profit after Tax / Total Assets ) In 10th Year


7-4 Design Standards ( Unit Consumption ) of Mechanical Pulp 7-4-1 Pulp 7-4-1-1 Production and Yield Yearly Working Days D/Yr 343(Shutdown:1Day/MonthX12+10d) Daily Working Hours hrs/D 24 Dry Pulp ADTBDP/D 100.0 (BDP:Bleached Dry Pulp) Dry Pulp ADTBDP/Yr 34,300.0=100.0*343 Chip Yield % 96 Refining &Screened Yield % 88 Bleached Yield after Screen % 96 Dry Pulp Yield % 99 Total Yield % 80.3 Whole Jute ADTChip/D 124.5 (moi.10%)=100/0.803 Whole Jute BDTChip/D 112.1 =124.5*0.9 Whole Jute ADTChip/Yr 42,703.5 (moi.10%)=124.5*343

7-4-1-2 Jute as Pulp Material Jute Harvest BDT/ha 10.0 Jute Harvest ADT/ha 11.1=10.0/0.9 Cultivation Area ha 4,000≒3,843=42,703/11.1 Jute Purchase Price $/BDT 68.97 1000TK=17.24$/(1-moi75%) Jute Purchase Price $/ADT 62.07=67.97*0.9 Jute Moisture % Avg. 10.0 at Mill Jute Moisture % Avg. 15.0 at Chipping

Storage Area ADT/m2 Avg. 0.75(0.7～0.8) Storage Area (Net) ADT/m2 Avg. 1.35(1.3～1.4) Jute Consumption ADT/D 124.5 (moi.10%)=100/0.803 Jute Consumption ADT/Yr 42,703.5 (moi.10%)=124.5*343

Jute Specific Weight Kg/m3 Avg. 150(140～160) Chip Weight Kg/m3 240 Chip Specific Weight Kg/m3 77(moi.15%) Chip Length mm 30±5 Loss Rate of Material % 4.0 ( dust and others ) Storage Yard in Mill ha 6.0 42,703.5/0.75=56,938m2 7-4-1-3 Quality of Pulp Quality Data APMP process Unbleached Pulp From CTP report table n-10

Freeness CSF ml 57 115 148 205

Bulk cm3/g 1.45 1.47 1.55 1.53 Breaking Length km 6.72 6.40 6.59 6.13 Tear Index mN･m2/g 5.12 5.64 6.32 6.25

7-4-2 Cooking 7-4-2-1 Impregnation Conditions NaOH % 3.0 H2O2. % 1.0 Silicate % 4.0 DTPA % 0.5 Temperature ℃ 80 Reaction Time min 20 Consisitency % 18-24 7-4-2-2 Refiner Primary Refiner 5000kw Secondary Refiner 2500kw Heat Recovery System 7-4-2-4 Washing Process Vacuum Washer Capacity Ton/D･m2 2.5 7-4-3 Pulp Bleaching Process 7-4-3-2 Bleaching Facility H2O2 bleaching NaOH % 3.0 H2O2 % 1.5 Silicate % 4.0 DTPA % 0.5 Pulp Density % 10.0 Retention Time min 120 Temperature ℃ 70 Tank Capacity m3 120 (105=101.0/0.10/1440*120/0.8(effective)) 7-4-4 Dry Pulp Process Drainage ﾟSR 25 (After Bleaching, before Beating) Average Fiber Length mm 1.3 Pulp Sheet Weight g/m2 850 Pulp Sheet Size mmW*mmL 720*830 Pulp Sheet Packing mmW*mmL*mmH 720*830*467.5 Pulp Sheet Pack Weight Kg/Pack 250 Moisture % 15.0±1 Working Days D/Yr 343

Working Hours hrs/D 24.0 Total Efficiency % 90 Operating Efficiency % 94 Machine Efficiency % 98 Finishing Efficiency % 98 Pulp Yield % 99.0 Pulp Production ADT 101 Pulp Bleached Ton

Pulp Sheet Machine Width mm 2,300 Pulp Sheet Finish Width mm 2,160 Pulp Sheet Machine Speed m/min Max. 50 ( designed ) Pulp Sheet Machine Speed m/min 41.6 ( operating ) Pulp Sheet Production ADT/Yr 34,300=100ADT/D*343D/Yr Pulp Sheet Production ADT/D 100

(Design120=2.16m*49.9m/min*850g/m2*1.44*0.90) Water m3/P.B.Ton 15.0 Electricity KWh/P.B.Ton 180 Steam Ton/P.B.Ton 1.6 7-4-5 Boiler Facilities Natural Gas Boiler Steam Pressure/Temp. Kg/cm2*℃ 50*450 Steam Volume T/Hr 30 Natural Gas Consumption L/Hr 2627=30.0/0.65*56.9L/TonHr Natural Gas Consumption L/ADT 624=2,627*24/101 7-4-6 Steam, Electricity, Water 7-4-6-1 Steam

Steam Consume Pressure Ton/ADT Kg/cm2

Impregnation 0.46 13/4 Refining 0 Bleaching 0.76 4 Drying (Pulp Sheet) 1.6 4 Boilers 1.5 4 Total 1.32 Steam Production Recovery of refiner T/Hr 5.13 Natural Gas Boiler T/Hr 13.05 Total T/Hr 39.1

7-4-6-2 Electricity Electricity Consumption for each Unit Impregnation KWh/ADT 30 Refining KWh/ADT 1,100 Screening & bleaching KWh/ADT 40 Drying (Pulp Sheet) KWh/ADT 150 Others 30 Total 1,350

Impregnation avg. KW 126=30*101.0/24 Refining avg. KW 4,629=1100*101.0/24 Screening & Bleaching avg. KW 168=40101.0/24 Pulp Sheeting avg. KW 631=150*100.0/24 Others avg. KW 126=30*101.0/24 Total Requirement avg. KW 5,680 Electricity can be generated by Steam from Natural Gas Boiler Natural Gas Boiler Turbine Steam Pressure/Temp. Kg/cm2*℃ 50*450 Steam T/Hr 30 Extracted Condensing Turbine 4Kg/cm2-----------------13.05T/Hr AC Generator 6,000KWＸ4000V Electricity Generation 5,680KW

Electricity Consumption 5,680KW

Electricity Purchase KW 0 Self Generation 100% Electricity Reception, Transforming Facilities

Electricity Supply 6.3KV Hi Voltage Motors 3.3KV Low Voltage Motors 400V Lighting and Others 200V

7-4-6-3 Water Supply Water Consumption Average In-Take

m3/ADT m3/D Impregnation 5 640=5*101.0/0.8 Refining 5 505=5*101.0 Bleaching 10 1,010=10*101.0 Drying 15 1,500=15*100.0 Total 125 3,655 Water Supply Capacity m3/D 6,000 ( Designed3655*1.5 ) 7-4-7 Effluent

Effluent m3/D Avg. 4,000 Temp. of Effluent ℃ 28 ( Summer ) Original Effluent SS BOD5 CODcr PH PPM Avg. Treated Effluent

PPM Avg.

7-4-8 Work Forces Wage No.

Mill Manager 20,000$/Yr 2 $ 40,000/Yr Prod.Manager 14,000$/Yr 3 $ 42,000/Yr Chief 1,800$/Yr 18 $ 32,400/Yr Operator 1,200$/Yr 138 $165,600/Yr Yard Operator 745$/Yr 20 $ 14,900/Yr

181 $294,900/Yr The Mill is designed for Facility Industry of 24 Hours Operation and operates in 4 groups with 3 shifts/day.

No. Shift X No. Material Yard 20 1 × 20 Chipping Process 32 4 × 8 Refining Process 12 4 × 3 /Screen/Bleach Process 12 4 × 3 Pulp Sheet Process 20 4 × 5 Boiler/Power 16 4 × 4 Water Supply/Effluent 16 4 × 4 Maintenance 20 1 × 20 Delivery/Transportation 8 1 × 8 Warehouse/Despatch 5 1 × 5 Administration 20 1 × 20

Total 181

7-4-9 Production Cost 7-4-9-1 Unit Cost applied Jute $/BDT 68.97 at Mill Gate NaOH(100%) $/T 414.00 H2O2(100%) $/KL 920.00 Sodium silicate $/T 260.00 DTPA $/T 3000.00 Water In-Take $/m3 0.00 Fresh Water $/m3 0.00 Electricity $/KWH 0.0691( for Purchase )

Natural Gas $/Km3 67.76 7-4-9-2 Facility Investment Amount Facility Investment $47,477,800.-

Depreciation STRAIGHT-LINE METHOD Depreciation Last Book Value Depre.Ratio

Machinery 20years 10% 4.50% Construction 30years 5% 3.17%

Inv.Amount Depre.Ratio Annual Amount Machinery $42,802,800.- 4.50% $1,926,126.-/Y Construction $ 4,675,000.- 3.17% $ 148,042.-/Y Total $47,477,800.- $2,074,168.-/Y

* 3 Years for Construction. Depreciation starts in 4th Project Year. *In Bangladesh, Depreciation Year is as follows, but the depreciation is calculated in

this report according to the international average depreciation year. Depreciation Last Book Value Depre.Ratio

Machinery 10years 0% 10% Construction 15years 0% 6.7%

7-4-9-3 Capital and Loan Capital： $10,000,000.- ( Assumption ) Loan : $49,604,800.-

Terms : 30 years Grace Period ; 10 years Interest Rate : 0.9% P.A Payment starts on the commencement of

Operation. If the loan condition of Japan Bank for International Cooperation will be adopted in Bangladesh as LDC country.

7-4-9-4 Land Acquisition and Working Capital, etc Social welfare 150,000 Contingency 3% on Investment 1,424,000 Additional Works 2% on Investment 950,000 Preoperational Expenses ( Investigation, F/S, etc ) 250,000 Legal Fees ( Registration, Establishment, Contracting, etc ) 200,000 Working Capital $500/ADTX101ADT/DX180Days 9,090,000 Land Acquisition $7,000/haX9ha 63,000 Total 12,127,000

7-4-9-5 Tax System Fixed Asset Tax % 0 Income Tax % 37.5（ against Profit ） Property Tax % 0 Import Tax % 22.5(depend on the Commodity) 7-4-9-6 Administration : 2% on Sales 7-4-9-7 Product Selling Price is set at US$400.- 500/Adt in Bangladesh

Annex 7

Minutes of the dissemination workshop of the Project on “Biotechnological application of enzymes for making paper pulp from green jute/kenaf (the whole plant)”

held on Tuesday, 11th May 2004 at 10 AM at Dhaka Sheraton Hotel The dissemination workshop was held on technologies developed under the project “Biotechnological Application of Enzymes for Making Paper Pulp from Green Jute/Kenaf (the Whole Plant)” at the Ball Room of Dhaka Sheraton Hotel under the Chairmanship of Mr. Md. Abdur Rahim, Secretary, Ministry of Jute, Govt. of the People’s Republic of Bangladesh on 11th May 2004. The objective of the dissemination workshop was to disseminate project results and raise awareness of the industry and other target groups on the outcome of the project. The workshop was held for two days; May 11 and 12, 2004. On the 11th, inaugural and technical sessions were held at Sheraton and on the 12th, a one-to-one discussion was held where interested participants/entrepreneurs/investors had an opportunity to meet/interact with the resource persons on matters relating to activities and outcome of this project. A list of participants is given in Annex-1.

INAUGURAL SESSION After the recitation from the Holy Quran, Mr. T. Nanda Kumar, Secretary General, International Jute Study Group (IJSG) welcomed the Distinguished Guests, Scientists, Delegates and entrepreneurs and gave an overview on the project activities. Mr. Getachew Gebre-Medhin, Principal Project Manager, Common Fund for Commodities (CFC), the Netherlands gave an account of the project. He said that the project is one in a series that CFC had financed over the years in collaboration with jute organizations and other partners in an effort to open up new market outlets for diversified and new end use of jute products. He noted that technological changes in the logistics industry and in the efficiency of supply chain management have brought about dramatic shift, substituting the use of jute in the packaging industry. As a consequence, jute progressively lost its market share in the international markets. He mentioned that the Project Completion Report (PCR) provides technical details of important results attained in pulping and bleaching as well as storing of jute fiber and black liquor management. The results obtained in pulping and bleaching, in particular, have been subjected to pilot and commercial trials with positive and competitive results vis-à-vis other comparable raw materials. He appreciated all the participating institutes for successfully completing the project as per the work plan. He expressed his heartfelt thanks to the Project Leader, Secretary General and Dr. Tzotzos, PEA and Ms. Tamara Babayan of UNIDO for completing the project successfully within the stipulated time. H E Mr. Michel Lummaux, Ambassador, Embassy of the Republic of France, Bangladesh was very much delighted to say a few words on the occasion. He wished that the successful implementation of the project will facilitate bulk use of jute/kenaf as raw material for pulp and paper. He also thanked all the participating institutes, CFC, IJSG, Govt. of France and UNIDO for initiating this project.

Dr. Shoaib Ahmed, Secretary, Ministry of Industries, Govt .of Bangladesh expressed his pleasure to say few words in the dissemination workshop. He mentioned that jute provides livelihood for millions of farmers, industrial workers and traders and at present it is facing severe competition. He expressed his strong belief that the workshop would encourage the entrepreneurs of Bangladesh and other countries to invest in pulp and paper industries. Further he added that Ministry of Industries will cooperate and give all supports to the interested entrepreneurs. Dr. Kamal Uddin Siddiqui, Principal Secretary to the Hon’ble Prime Minister, Govt. of Bangladesh mentioned that jute/kenaf is an environment friendly, biodegradable product and it has been a major foreign exchange earner for Bangladesh. He emphasized that as jute sector facing difficulties for its survival, it has become imperative to find newer uses of jute in bulk quantity. Dr. Siddiqui was fully confident that the technologies developed by the participating institutes would pave the way for finding out the solution of the great problem. He also mentioned that technical dissemination workshop in Bangla regarding the research results could be held and all the supports regarding this would be provided from the Prime Minister’s Office. He expressed his sincere thanks and gratitude to Mr. T. Nanda Kumar, SG, IJSG and Dr. G. Mohiuddin, Project Leader. Mr. Shajahan Siraj, MP, Hon’ble Minister for Textiles and Jute said that jute is a renewable source of raw material. According to him, the project was completed at such a time when the world was searching for an alternative raw material for producing pulp and paper. He strongly believed that this was a break through for jute sector. Speaking on the occasion, the Hon’ble Minister for Industries Mr. Motiur Rahman Nizami, MP, said that the workshop was undoubtedly an important event on a number of accounts because it would facilitate the use of renewable resources as raw material and generate entrepreneurship and also large scale employment. He expressed his heartfelt thanks to Ministry of Textiles and Jute and the IJSG for organizing such an important workshop. He also thanked UNIDO for successfully completing the project under able supervision of IJSG with technical support from A&FI, CTP, CPPRI, IBFC, BCIC and BJRI. He expressed his gratitude to CFC, Government of France and EC for funding the project. He hoped that BCIC would explore the possibility of utilizing the process in its existing paper mills for making pulp and paper from the green jute. He also encouraged the entrepreneurs to set up new paper mills based on the project results achieved. Finally he declared the opening of the dissemination workshop. Mr. Md. Abdur Rahim, Secretary, Ministry of Jute, Govt. of Bangladesh thanked the scientists of participating institutes for completing the project as per the work plan. He was happy to note that technologies have been developed to make paper pulp commensurate with the objectives envisaged in the project. He commented that the project rightly addressed the issues like storage of whole jute/kenaf plants, cost-effectiveness of the technologies developed, viability and economic feasibility of the technologies. Mr. Md. Afzal Hossain, Joint Secretary, Ministry of Jute gave vote of thanks.

TECHNICAL SESSION The technical session was chaired by Dr. George T. Tzotzos, Head of Biotechnology Unit, UNIDO. Dr. Tzotzos expressed his thanks to Mr. T. Nanda Kumar, Secretary General, International Jute Study Group (IJSG) for inviting him to preside over the session as Executing Agency. He also thanked Common Fund for Commodities (CFC), the Netherlands for involving UNIDO in this project, which they feel worthwhile as it meets numerous human development objectives from many perspectives; from the perspective of developing new economics, protecting environment and generating employment. He also thanked IJSG for providing guidance and the Project Leader (PL) Dr. G. Mohiuddin for his tireless effort in completing project successfully. He thanked all the participating institutes for their high quality works that led to generate viable input for decision makers, like the entrepreneurs to make up their mind on to what extent they would like to enter this new commercial opportunity that was opened through this project. He specified that the project demonstrated significant environmental benefits of using biopulping and biobleaching, which can also generate adequate quality paper. However, he stressed that although technological potential had been demonstrated through this project, at the end of the day economics will determine the viability. Then Mr. Chairman invited the PL, Dr. Mohiuddin to present the overall findings of the project. Dr. Mohiuddin started by stating the main objective of the project, which was to utilize whole jute/kenaf as a raw material for pulp and paper. He added that using eco-friendly process to make the product cost effective and environment friendly was also intended in the project. Then the activities carried out to achieve the objectives of the project were explained. In this regard, Dr. Mohiuddin informed the audience that:

Micro-organisms suitable for biopulping were selected and the conditions of biopulping were optimized.

All the participating institutes optimized the condition to produce bleachable grade pulp of kappa no. 20 (considered to be suitable for good quality pulp) by two chemical processes.

Biopulping experiments were conducted to reduce chemical requirement, cooking time and energy requirement.

Application of bio-technology in the chemical process reduced the kappa no. by 20% at the same cooking condition both in the Soda-AQ and in the Kraft pulping process.

Physical properties of paper (burst, tear and tensile index) improved significantly. In both the Soda-AQ and Kraft processes cooking time can be reduced (from 120 minutes to 60 minutes in kraft process and from 90 minutes to 60 minutes in Soda-AQ process).

A&FI and CTP optimized the condition of Alkaline Peroxide Mechanical Pulping (APMP) to produced newsprint grade of paper.

In the mechanical process (at A&FI) application of biopulping reduced energy requirement by 20-25%.

Various institutes (IJSG/BCIC, CTP, CPPRI and IBFC) conducted bleaching with conventional bleaching sequence, Elemental Chlorine Free sequence (ECF) and Total

Chlorine Free (TCF) sequence with and without enzyme. Target brightness of 80%+ was achieved in most of the sequences.

Application of xylanase reduced the chlorine requirement by 15%. Application of xylanase followed by alkali reduced the chlorine requirement by 30%. Application of oxygen reduced the chlorine requirement by 40-45%.

The results of the large scale trials were also presented by Dr. Mohiuddin. He noted that: A large scale trial for the production of kraft paper (14 MT of dried jute plant which is equivalent to 56 MT of green jute plant) using 12% alkali as Na2O and 20% sulfidity and one commercial trial for the production of writing paper (80 MT of dried jute plant equivalent to 320 MT of green jute plant) using 15.5% alkali as Na2O and 20% sulfidity were carried out. Bleaching was conducted in the conventional bleaching sequence chlorine-alkali-hypochlorite (CEH): chlorine (0.22 of kappa no. of pulp), 2% NaOH, 1.5% hypochlorite. Bleached pulp was used for making paper (70 gsm) in a paper machine of speed of 175-200 meter /minutes.

The results showed: • 52% yield of kraft pulp. • The physical properties of kraft paper were comparable to those of bamboo or even

superior. • 45-48% yield of pulp for writing paper. • The physical properties of paper in the kraft process were comparable to those of

bamboo and hard wood or even superior. • The brightness of the paper was 80-83% ISO. After the deliberation of Dr. Mohiuddin, Dr. Tzotzos further summarized the findings and then requested Dr. A. G. Kulkarni to present his findings.

Dr. Kulkarni highlighted the activities that had been conducted at CPPRI, such as:

• optimization of chemical pulping • biopulping • optimization of bleaching • management of black liquor and • pilot scale chemical pulping. At first, he explained how the industry would grow in the Asia. Then he presented the results achieved at CPPRI and mentioned that the results of the biopulping conducted at CPPRI showed no reduction in chemical demand, yield loss by 1%, but brightness gain by 2 units. He also explained the suitability of different pulping process like Soda process for small mills, Soda-AQ process for medium – size mills and kraft process for large mills. Dr. Kulkarni noted that with jute it is possible to get better physical properties of paper (such as, tensile, burst and tear index) compared to other raw materials. For pilot scale trial, they collected the plant from Kolkata, which is about 2000 km away from CPPRI. He mentioned that care has to

be taken in chipping the whole jute plant. If the barks are separated from the core during chipping then the properties of the pulp will be affected. He also mentioned that using of xylanase in various bleaching sequences resulted similar finding as mentioned by Dr. Mohiuddin. Dr. Kulkarni explained in details of the importance of black liquor management. According to him, it is required primarily to recover cooking chemicals and to recover the energy as by products to eliminate the pollution. He also mentioned that one of the components of black liquor is lignin, which has got a very good fuel value. He stressed the importance of chemical recovery as US$ 200 per ton can be saved if it is recovered. He informed the audience that:

For a category of mill size of 30-50 TPD chemical recovery system is not economically viable. For a mill size of 50-100 TPD a conventional chemical recovery is not economically viable as

the capital and operational cost will be very high. For a mill size 100-150 TPD chemical recovery system can be used.

Next Mr. Bernard Brochier from CTP was called upon to present the highlights of the work of CTP. He presented a paper on chemical pulping in Soda and Soda-AQ process and bio-treated pulp (supplied by IJSG). He described the various bleaching sequences of chemical pulping with and without enzyme. He pointed out that CTP compared the results of chemical pulping in Soda and Soda-AQ processes and considered Soda-AQ process is suitable in terms of yield and kappa no. In case of bleaching, Mr. Brochier informed that CTP initially conducted bleaching in conventional (CEH), Elementary Chlorine Free (DED) and Total Chlorine Free sequences. Experiments were also conducted with and without commercial enzyme (Xylanase from NOVO and Laccase). The results were: • Reduction of Kappa number (30-35%) when Xylanase was used followed by alkali. • Reduction of Kappa number was about 50% when two enzymes (Xylanase and Laccase)

were used followed by alkali. • There was no change of viscosity with the enzyme treatment. • The DED sequence showed the highest brightness. • The ECF and TCF sequences with Xylanase – Laccase improved the brightness and

physical properties of handsheets. CTP also conducted bleaching experiments in CEH, DED, OCEH and ODED sequences with Soda-AQ and Soda-AQ pretreated Pulp (C. subvermispora) and the findings were: • Application of oxygen reduced the chlorine requirement in the CEH sequence by

50-40% with untreated and treated pulp respectively. • Oxygen delignification also improved the brightness by 4.8 and 3.5 units with untreated

and treated pulp respectively. • Brightness was higher in the DED than the CEH sequences in both the treated and

untreated pulp. • Prior application of oxygen in DED improved the brightness from 83.6% to 87.1% and

85.2% to 87.4% with untreated & treated pulp.

CTP also conducted bleaching experiment with xylanase(X), enzyme followed by alkali (XE) and alkali followed by CEH (XECEH) and DED (XEDED). All these experiments were conducted with Soda-AQ pulp and pretreated Soda-AQ pulp of the project. Some of the important findings that were mentioned: • Xylanase followed by alkali reduced chlorine use by 25% (pretreated) and 39%

(untreated). • There was a drop of Viscosity (from 8.3 to 6.5) with XECEH sequence. • Oxygen followed by enzyme led to reduction of chlorine by 62% and 43% in conventional

and ECF sequences respectively. • The pulp produced with treated chips bleached to higher brightness. • The ECF bleaching sequence resulted in less COD and BOD. • Oxygen delignification prior to bleaching reduced chemical consumption significantly. • There was an increase of COD & BOD in the effluents prior to the bleaching sequences

by O, XE and OXE. Then Mr. Bernard explained the findings of CTP regarding their mechanical pulping experiments. CTP used two mechanical pulping processes to determine the suitability of whole jute for high-yield pulping. One process is Thermo-Mechanical Pulping (TMP) and the other process is Alkaline Peroxide Mechanical Pulping (APMP). CTP’s high yield pulp making pilot plant facility operates under industrial conditions and simulates a mill process. The results obtained from pilot plant studies can be up-scaled directly. The results of the TMP process were: • The TMP pulp that was obtained had weak mechanical properties. However, the pulp

bleaching led to 70% ISO brightness with 5% hydrogen peroxide charge. • A chelation stage was necessary prior to the bleaching stage. Furthermore, three

commercial enzymes were tested prior to the bleaching stage with little effect. The results of the APMP process were: • Pulps were obtained with different chemical charges leading to pulp of mechanical

properties suitable for newsprint papers. • The brightness target of 60-65% ISO was achieved. • The best chemical charge was 3% sodium hydroxide and 1% hydrogen peroxide for the

impregnation stage and 3% hydrogen peroxide and 1.5% sodium hydroxide applied at the bleaching stage. However, these chemical charges can only be slightly reduced.

Dr. Ed De Jong was called upon next to present the findings of A&FI. He explained that their aim was to look into mechanical pulping (high yield pulping) basically which means they were to transform the whole jute stick into paper with minimum of losses. Their findings were:

In TMP process, the strength of paper is too low. Trials were conducted in APMP process which resulted in good quality pulp. APMP pulp is suitable as newsprint grade of paper. The average yield in this process after

bleaching refining and washing was 78-90%.

Then Dr. Jong mentioned about the biological treatment in the mechanical process. The findings were:

The microbial strain, F. lignosus, supplied by Dr. Mohiuddin was very efficient in reducing energy requirement. They got very good results with these microbial strain, which improved the physical properties and improved the brightness by 1 to 2 units.

He also compared the biopulping in RMP and APMP processes.

There was loss of some yield due to pretreatment with fungal strain. But in APMP process this loss was reduced.

Use of xylanase in the bleaching can improve the brightness by 2-3% or alternatively can reduce chemical requirement.

Dr. Jong concluded that APMP is suitable for producing good quality of newsprint and addition of microorganism will make the product more economical. After the presentation from Dr. Jong from the Netherlands, the representative from IBFC, Dr. Wang Chaoyun was invited to deliberate their findings from this project. Dr. Wang Chaoyun highlighted the activities of IBFC and the findings were:

IBFC isolated a large number of fungal strains (94) and collected 8 strains from the Dr. G. Mohiuddin, Project Leader.

F. lignosus and S4 grew very rapidly on kenaf. F. lignosus and S4 were found suitable for biopulping experiments. S4 exhibited high enzyme activities and F. lignosus exhibited weak Laccase activities. Strain No S4, C2 and ST were found suitable for the production of enzymes. S4 and F. lignosus were suitable for kenaf biopulping. There was a 5.5% yield loss of

unscreened pulp compared to control pulp. Pulp treated with strain P1 and P3 exhibited higher brightness compared to strain S4 and F.

lignosus. They conducted bleaching trials in the ECF bleaching sequence (DED) with kraft and biokraft pulp using a commercial enzyme. They have indicated that application of xylanase reduced the kappa no. 2.4 units of biokraft pulp and 0.84 unit of untreated kenaf pulp. From their results, it was indicated that pre-treatment of chips with white rot fungi prior to pulping modified the lignin content of chips and reduced chlorine requirement. They have conducted storing activities and they isolated 32 different strains. Out of these strains, 5 strains predominated in degradation of fibre. They used 8 different fungicides to control the growth of microorganism. The best result with these fungicides was found with the combination of flusilaz and horizon. On the basis of fungicide trials, small scale storing experiments were carried out. Kenaf plants were dried out in the open air with moisture content below 15%. The

dried plants were bundled in a diameter of about 30 cm. The kenaf bundles were placed on brick racks layer across layer with a provision of ventilation. After the presentation, IBFC, Dr. Mohiuddin was again called upon to present the findings of experiments on storing protocol. He stated that the objectives of the storing protocol activities were:

To isolate fungal strains responsible for the degradation of jute plants; To find out the enzymes normally secreted by these organisms during rotting of jute plant; To evaluate in vitro test the efficacy of some commercial fungicides in controlling the

growth of these fungi; To estimate the time required for reduction of moisture content (15-18%) after harvesting

jute plant; and To develop proper model for storing dried jute plants.

During the experiments 12 strains were isolated. Out of all these strains, Sclerotium sp. was found to be the main strain responsible for degradation of jute plants after harvesting. IJSG scientists studied the enzyme secretion activities of Sclerotium sp., Macrophomina sp. and Aspergillus sp. to find out the reasons for degradation. Among the fungi tested, Sclerotium sp. secret the highest enzyme activity. After comparing the degradation by different fungi, five fungicides were evaluated for their fungitoxicity on isolated microbial strains. It has been observed that Tilt and Diathane can be used as fungicides to stop the growth of Sclerotium sp. and Macrophomina sp. Two models were suggested for long term storing with a minimum cost of investment:

In one model, the bundled jute plants are kept horizontally on two/three storied bamboo / concrete frames.

In another model, bundles of jute plants are kept in several layers crisscrossed to one another. Piled jute plants can be covered with a shade made of polythene sheet or straw to protect them from rain.

Then Dr. Tzotzos requested Mr. N. Saeki from Techno Forest Co., Japan, to present the techno-economic feasibility study of the project. At first, Mr. Saeki explained the chemical pulping process of which he calculated the cost in Soda-AQ process. He mentioned about the total investment cost of chemical based paper mill. According to him, the cost of the machineries would be around US$ 50 million and construction cost would be US$ 8 million. He also mentioned around US$ 13 million would be required for other costs like acquisition of land, working capital, etc. So, he estimated that for setting up a 100 TPD mill, total cost would be US$ 77 million. Mr. Saeki mentioned that he calculated the cost using four cases. In case 1, the cost of jute and chemical cost of Bangladesh using xylanase in the ECF bleaching sequence (XDED). He mentioned that in case 1, total manufacturing cost would be US$ 400/ton. In case 2, he

calculated on the basis of raw material cost of jute and chemical cost of India, where total manufacturing cost would be US$ 380/ton. In case 3, he calculated the cost of raw material of kenaf and the chemical cost of Bangladesh. In this case, the total manufacturing cost would be US$ 372/ton. In case 4, he considered the raw material cost of kenaf and chemical cost of India, where the total manufacturing cost would be US$ 350/ton. Then Mr. Saeki commented that case 4 is the cheapest and the cost is close to hardwood kraft pulp of Chile. Next he talked about the cost of mechanical pulping in the APMP process of 100 TPD mill. After explaining various sequences of mechanical pulping, Mr. Saeki gave an estimate of the investment required in mechanical pulping. According to him cost of machineries would be US$ 41 million, construction cost approximately US$ 6 million (mostly construction supervising, transportation and engineering fees) and other cost, like working capital, contingency, etc. would be US$ 12 million. So the total cost would be around US$ 60 million. Then he again presented the manufacturing cost of mechanical pulping in APMP process on the basis of four cases. In case 1, the raw material cost of using jute and chemical price of Bangladesh were considered. In this case, the total manufacturing cost would be around US$ 300/ton and the total production cost would be about US$ 278/ton. In case 4, the raw material cost of using kenaf and chemical price of India were considered. He commented that cost of case 4 is similar to softwood mechanical pulping of Canada.

DISCUSSION After the deliberation from all the speakers, Dr. Tzotzos requested the audience to participate in the discussion. Mr. Akhteruzzaman, Ex Director of Forest Research Institute raised the question that the cost of chemical pulp is higher than hardwood pulp and also the mechanical pulp is costlier than chemical pulp. He also mentioned that conifer mechanical pulp is of much superior quality than the pulp from jute. The cost of jute pulp is higher and quality of jute pulp compared to other pulp is lower. Dr. Tzotzos requested Mr. Saeki to respond to the question. Mr. Saeki replied that in countries like US, Brazil the production of a paper mill is about some million tons/year, which reduces the production cost. But normally non-wood pulp mill has a capacity of 100 TPD for which production cost is higher. Then Dr. Akhteruzzaman wanted to know how the pulp produced from jute will compete in the international market? Dr. Tzotzos replied that we targeted domestic market and not the export market. So the figures basically relate to substituting imports of pulp and paper. Mr. Saeki finally added that the comparison between wood pulp produced in Sarawaki and Chile and non-wood pulp produced Bangladesh and India cannot be done because of the difference of the situations in those countries. Dr. S. L. Keswani from India mentioned that jute cannot be compared with other raw materials. It is a regional plant and it cannot be used 100% as raw material for pulp and paper. It can only be used as reinforcement for pulp making.

Mr. Getachew Gebre-Medhin mentioned that in terms of cost the processing of jute is comparable and competitive to other raw materials. He wanted to know from the consultant whether the production of pulp from green jute is much more expensive than hard wood pulp. Mr. S. Jagadeesan from India mentioned that the cost of raw material in Bangladesh is lower than India, while chemical cost is higher than India. So, he suggested taking off all the taxes, only the fixed cost and raw material cost should be considered and then working out the total cost of product. This will help in deciding the domestic tariff, which will make the industry viable and competitive. Mr. Saeki further clarified that jute/kenaf has potential to make pulp and paper. Mr. Saeki also mentioned that due to the transportation cost of jute/kenaf, the mill should be setup near the jute/kenaf growing areas. Mr. Jagadeesan agreed that transportation cost of using jute as a raw material is very high. So he wanted to know how to calculate different capacity of mill and to work out their viability. Dr. Tzotzos wanted to know jute being an annual plant whether it is possible to run a mill throughout the year with proper storing and then produce pulp. Mr. Jagadessan ensured that there is a possibility of two harvesting a year and storing of green jute plant for six months is possible. Mills can be run for at least 10 months a year. Dr. Tzotzos wanted to know whether existing mills, which are using other raw material, can use green jute as raw material. Mr. Jagadessan replied that an incremental cost benefit analysis is required to determine whether existing mills can be used for the production of pulp using jute as raw material. Mr. M. A. Halim, Ex EC Representative commented that with jute, various grades of paper can be produced and it can be made competitive. Dr. Tzotzos commented that if there are adequate data then the economic feasibility study may be made more sophisticated and comprehensive. Mr. T. Nanda Kumar wanted to know the current price of pulp internationally for those comparable grades of pulp. Mr. Saeki informed that hardwood pulp in the international market is US$ 500 and in Bangladesh due to heavy import tax the market price is about US$ 600. Mr. Jagadessan mentioned that if a policy decision can be made to exempt taxes on chemical import, then pulp production from jute can be made viable. In reply to a question from Dr. Akhteruzzaman, Dr. Mohiuddin informed that in Europe and North America bleaching cost can be reduced US$ 2.5/ton in addition to other environmental benefits. Mr. Gebre-Medhin recommended that more emphasis should be given to the techno economic feasibility study of processing and whether this is economically feasible or not. So, an in-depth feasibility study is required. Dr. Mohiuddin mentioned that IJSG, BCIC, CTP and CPPRI optimized the conditions of pulping

and all these institutes were able to produce bleachable grade of pulp from jute with yield of 45-48%. In this project, storing protocol had been developed in which jute can be stored with and without fungicides for about 9 months. Mr. Jagadessan informed that if any kind of techno feasibility study is carried out in the future, Govt. of India would like to provide fund for that project. Mr. Till Grether from Switzerland wanted to know whether in addition to packaging there is a possibility of using jute in various other products. He wanted to know whether the impact on the farmers for this new opportunity of getting rid of jute in green state was taken into account in the feasibility study. Dr. Tzotzos replied that this kind of social impact was not considered in the feasibility study. He commented that for further refinement this impact should also be taken into consideration. Mr. T. Nanda Kumar commented that some of the numbers should be refined. Then he wanted to know from the panel that what should be the recommendation to an investor. What kind of paper should be produced, unbleached paper for wrapping or newsprint grade paper from mechanical APMP process or writing/printing paper from chemical process? Looking at the market today Mr. Kumar wanted to know what would be the best set of 3 recommendations. Dr. Ed de Jong of A&FI suggested in reply that APMP (mechanical pulping) could be a valuable option to the investors for the production of newsprint. Mr. Bernard from CTP mentioned that jute plant is a mixture of hardwood and softwood. So it is very suitable for the production of newsprint in APMP process. Dr. Kulkarni remarked that jute/kenaf can be used for production of food packaging material. As regard to newsprint production from mechanical pulping, he mentioned that newsprint produced from kenaf in mechanical process demand more ink. He added that more focus should be given for developing improved techniques a raw material handling and transportation which will play a key role in increasing productivity. Dr. Tzotzos raised a few questions of his own. He remarked that the project result indicated that there had been reduction of chemical and energy consumption as well as pollution in the effluent using biotechnological method. Then he asked whether biotechnological method significantly reduced the cost. He wanted to know the premium of using biotechnology. In response, Mr. Jagadeessan commented that biotechnological method was primarily experimented considering the environmental benefits. And the experiments were conducted to reduce the cost to at least at per with the conventional process. Dr. Kulkarni mentioned that they could not get any significant result from biopulping. But in bleaching chemical can be reduced by 20-30%. Dr. Mohiuddin remarked that in Finland and North America it had been calculated that production cost of bleaching would be reduced by US$ 2.25 per ton due to the application of xylanase, in addition to reduction of pollution in the effluent. He also mentioned that if there is an in house production of xylanase in the mill, the production cost of bleaching can be reduced by US$ 1.75

per ton of pulp. Dr. Jong however, remarked that although biotechnological methods have its benefits, at the moment concentration should be on mechanical pulping in APMP process. First, this APMP process should be established, then biotechnological methods can be focused on. Mr. Bernard commented that oxygen can reduce the chemical requirement very significantly, but the investment cost for using oxygen is very high. But the use of xylanase in existing mills, would not require much of capital investment. So Dr. Tzotzos commented that locally isolated microorganism or enzymes will substantially reduce the chemical requirement. Finally, Dr. Tzotzos thanked the participants for the enlightening discussion. On 12th May, there was one to one discussion with scientists, entrepreneurs and consultants on matter relating to activities, achievements and outcome of this project.

the economic and financial analysis study for the jute / kenaf pulp

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