The Economic and Financial Analysis Study for the Jute

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					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

  Estimation of the Jute Chemical Pulp Production Cost in Bangladesh (US$/ Adt)
                                          Whole Jute            W hole Kenaf
                                      Case 1     C ase 2     Case 3      C ase 4
  Variable Costs      Raw materials    147         147        118          118
                      Energy            37          37         37           37
                      Chemicals         80          57         80           57
                      Others            18          18         18           18
  Total Variable Cost                  282         259        253          230
  Fixed Costs         Labor             10          10         10           10
                      Maintenance       23          23         23           23
                      Administration     5           5          5            5
                      Depreciation      82          82         82           82
  Total Fixed Cost                     120         120        120          120
  Factory Manufacturing Cost           402         379        373          350


  Mechanical Pulp Manufacturing Cost                 Unit : US$/ Adt
                                Whole Jute         Whole Kenaf
                                 Case 1    C ase 2   Case 3     C ase 4
  Variable Costs Raw materials      77        77       62          62
                 Energy             43        43       43          43
                 Chemicals          78        65       78          65
                 Others             14        14       14          14
  Total Variable Cost              212       199      197         184
  Fixed Costs Labor                  9         9        9           9
                 Maintenance        20        20       20          20
                 Administration      5         5        5           5
                 Depreciation       60        60       60          60
  Total Fixed Cost                  94        94       94          94
  Factory Manufacturing Cost       306       293      291         278




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.
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   VAT
Case A               0.9%        0.0    %     Case1 Chemical Price BangladeshJute
Case B               4.9%        0.0    %     Case2 Chemical Price India     Jute
Case C               0.9%       15.0    %     Case3 Chemical Price BangladeshKeanf
Case 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 Japan
Interest 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 A
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     18     18     18    18    13     13     13     13    12       12
     VAT                           0      0      0     0     0      0      0      0     0        0
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         435    412    405   383   332    319    317    304   670      550
Case B
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     96     96     96    96    71     71     71     71    66       66
     VAT                           0      0      0     0     0      0      0      0     0        0
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         513    491    484   461   390    377    375    361   724      604
Case C
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     18     18     18    18    13     13     13     13    12       12
     VAT                          60     57     56    53    46     44     44     42    96       78
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         495    469    461   435   378    363    360    345   766      628
Case D
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     96     96     96    96    71     71     71     71    66       66
     VAT                          60     57     56    53    46     44     44     42    96       78
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total 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      106
   Case B                          54    68     73    87    22     30     32     40    91       72
   Case C                          66    82     87   103    29     39     40     50    65       57
   Case D                          17    33     38    54    -7      3      4     14    31       24
Red Letter indicates not feasible

Minimum Profit ( after Tax ) Level, Feasible for the Project
              10%of the Annual return on Equity and repayment of the Loan during 20years
Chemical Pulp                     56 US$/ADT
Mechanical Pulp                   50 US$/ADT
Fine Paper                        50 US$/ADT
Newsprint Paper                   50 US$/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 ;
IJSG/BCIC Bio-Bleaching X-D-E-D
           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     10.1


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 ;

CTP Bio-Bleaching X-E-D-E-D
           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  18.0


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
ClO2 was calculated on the base of ClO2 Manufacturing Chemical cost.
IJSG/BCIC Bio-Bleaching Chemical Cost X-D-E-D
                                     D-E-D                   X-D-E-D
                                                      Cost            Cost
                    Unit Price            Kg/Adt     US$/Adt Kg/Adt US$/Adt
ClO2 : NaClO3       US$1,000.00/Adt         29.48      29.78    26.50  26.77
ClO2 : H2SO4        US$138.00/Adt           13.87       1.93    12.47   1.74
ClO2 : CH3OH        US$1,310.00/Adt          3.47       4.59     3.12   4.13
Caustic Soda(100%) US$414.00/Adt             20.00         8.36    20.00    8.36
Total Bleaching Chemical Cost                            44.66             41.00
Cost Reduction in Bleaching Chemical                 44.66 - 41.00   =     3.66

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
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

  Estimation of the Jute Chemical Pulp Production Cost in Bangladesh (US$/ Adt)
                                          Whole Jute            W hole Kenaf
                                      Case 1     C ase 2     Case 3      C ase 4
  Variable Costs      Raw materials    147         147        118          118
                      Energy            37          37         37           37
                      Chemicals         80          57         80           57
                      Others            18          18         18           18
  Total Variable Cost                  282         259        253          230
  Fixed Costs         Labor             10          10         10           10
                      Maintenance       23          23         23           23
                      Administration     5           5          5            5
                      Depreciation      82          82         82           82
  Total Fixed Cost                     120         120        120          120
  Factory Manufacturing Cost           402         379        373          350

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.

Estimated Selling Cost of Jute Chemical Pulp in Bangladesh         (US$/ Adt)
                               Case 1     C ase 2     Case 3         C ase 4
Total Variable Cost             282         259         253            230
Total Fixed Cost                120         120         120            120
Factory Manufacturing Cost      402         379         373            350
Total Head Office Cost           32          32         32              32
Total Manufacturing Cost        434         411         405            382
On the other hand, current Market Pulp Price is generally known as follows on the base of
CIF Northern Europe and the Market is in the tight condition on/from Second Quarter 2004.
Market Price of Market Pulp                                 (US$/ Adt)
                                       Mar- 03    Mar- 04     Apr- 04
Softwood Bleached Pulp Northern         520        590       620- 640
Hardwood Bleached Pulp Southern         490      490- 500    520- 530
Price : CIF N. Eurpoe

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.
Bangladesh : Imported Pulp Price ( including Tax )
Bleached Pulp Softwood US$647/ Adt Tk. 37,500/ Adt
Bleached Pulp Hardwood US$540/ Adt Tk. 31,300/ Adt
               Average US$593/ Adt
Data ; March 2004

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 ;


Forecast : Market Pulp Price
Softwood Bleached Pulp Northern US$560- 630/ Adt Average US$600/ Adt
Hardwood Bleached Pulp Southern US$455- 540/ Adt Average US$500/ Adt

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.

Forecast : Imported Pulp Price in Bangladesh
Bleached Pulp Softwood US$720/ Adt
Bleached Pulp Hardwood US$600/ Adt
                 Average     US$660/ Adt

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
Expected Profit from Chemical Pulp Business in Bangladesh            Unit: US$/ Adt
                                Case 1         Case 2       Case 3       Case 4
Total Manufacturing Cost     434     434     411    411   405    405  382     382
Sales Price in the Market    600     660     600    660   600    660  600     660
Business Profit              166     226     189    249   195    255  218     278
Income Tax 37.5%              62      85      71     93    73     96   82      104
Profit After Tax             104     141     118    156   122    159  136     174
Cashflow                     186     223     200    238   204    241  218     256
( Cashflow = Profit after Tax + Depreciation )



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.

Jute Chemical Pulp Cost with Export Costs                   Unit : US$/ Adt
                                      Case 1      Case 2    Case 3     Case 4
Total Variable Costs                   282         259       253         230
Total Fixed Costs                      120         120       120         120
Factory Manufacturing Cost             402         379       373         350
Head Office Costs                       27          27        27          27
Total Manufacturing Cost               429         406       400         377
Export Costs Inland Transportation       5          5         5           5
                Loading                  5           5         5           5
                Ocean Transportation    70          70        70          70
Total Export Cost                       80          80        80          80
Total Cost with Export Cost            509         486       480         457

As indicated at 2 – 2 – 2, the following international average prices of Softwood Pulp and
Hardwood Pulp are estimated on CIF Northern Europe.
Forecast : Market Pulp Price
Softwood Bleached Pulp Northern US$560- 630/ Adt Average US$600/ Adt
Hardwood Bleached Pulp Southern US$455- 540/ Adt Average US$500/ Adt

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$500/Adt is applied for Export
Sales Price and the business results is estimated as follows ;
Chemical Pulp : Export Business                                      Unit : US$/ Adt
                                               Case 1   Case 2     Case 3     Case 4
Total Manufacturing Cost with Export Costs      509      487        480         457
Export Sales Price                              500      500        500         500
Bsiness Profit                                   -9       13         20          43
Profit after Tax 37.5%                            0        5          8          16
Profit after Tax                                 -9        8         12          27
Cashflow ( Profit after Tax + Depreciation )     73       90         95         109


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
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.

Production Cost & Profit of Fine Paper
Variable Cost                         US$550/ Adt
Fixed Cost                             US$ 90/ Adt
Factory Paper Manufacturing Cost      US$640/ Adt
Head Office Cost                       US$ 30/ Adt
Total Paper Manufacturing Cost        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.

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

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

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

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.
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

Mechanical Pulp Manufacturing Cost                 Unit : US$/ Adt
                              Whole Jute         Whole Kenaf
                               Case 1    C ase 2   Case 3     C ase 4
Variable Costs Raw materials      77        77       62          62
               Energy             43        43       43          43
               Chemicals          78        65       78          65
               Others             14        14       14          14
Total Variable Cost              212       199      197         184
Fixed Costs Labor                  9         9        9           9
               Maintenance        20        20       20          20
               Administration      5         5        5           5
               Depreciation       60        60       60          60
Total Fixed Cost                  94        94       94          94
Factory Manufacturing Cost       306       293      291         278

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.
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$304 – 332/Adt as follows ;
( each case in the list is same as difference in the Bleaching as well as Raw Material )
Estimated Selling Cost of Jute Mechanical Pulp in Banglades (US$/ Adt)
                              Case 1   C ase 2     Case 3     C ase 4
Total Variable Cost            212        199       197         184
Total Fixed Cost                94         94        94          94
Factory Manufacturing Cost     306        293       291         278
Total Head Office Cost          26         26        26          26
Total Manufacturing Cost       332        319       317         304

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.

Expected Profit from Mechanical Pulp Business in Bangladesh                Unit:US$/ Adt
                                 Case 1         Case 2            Case 3      Case 4
Total Manufacturing Cost          332             319              317          304
Sales Price in the Market         425             425              425          425
Business Profit                    93             106              108          121
Profit Tax 37.5%                   35              40               41           45
Profit After Tax                   58              66               68           76
Cashflow                          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.
Production Cost & Profit of Newprint Paper
Variable Cost                            0/
                                  US$43 Adt
Fixed Cost                        US$ 90/ Adt
Factory Paper Manufacturing Cost US$520/ Adt
Head Office Cost                  US$ 30/ Adt
Total Paper Manufacturing Cost     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.
Profit Estimation on Domestic Sales for Newsprint Paper
Total Manufacturing Cost     US$550/ Adt

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

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

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.
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   VAT
Case A               0.9%        0.0    %     Case1 Chemical Price BangladeshJute
Case B               4.9%        0.0    %     Case2 Chemical Price India     Jute
Case C               0.9%       15.0    %     Case3 Chemical Price BangladeshKeanf
Case 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 Japan
Interest 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 A
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     18     18     18    18    13     13     13     13    12       12
     VAT                           0      0      0     0     0      0      0      0     0        0
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         435    412    405   383   332    319    317    304   670      550
Case B
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     96     96     96    96    71     71     71     71    66       66
     VAT                           0      0      0     0     0      0      0      0     0        0
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         513    491    484   461   390    377    375    361   724      604
Case C
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     18     18     18    18    13     13     13     13    12       12
     VAT                          60     57     56    53    46     44     44     42    96       78
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total Manufacturing Cost         495    469    461   435   378    363    360    345   766      628
Case D
Factory manufacturing Cost       402    380    372   350   306    293    291    278   640      520
 Intrest Cost                     96     96     96    96    71     71     71     71    66       66
     VAT                          60     57     56    53    46     44     44     42    96       78
  Other Head offe cost            15     15     15    15    13     13     13     13    18       18
Total 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      106
   Case B                          54    68     73    87    22     30     32     40    91       72
   Case C                          66    82     87   103    29     39     40     50    65       57
   Case D                          17    33     38    54    -7      3      4     14    31       24
Red Letter indicates not feasible

Minimum Profit ( after Tax ) Level, Feasible for the Project
              10%of the Annual return on Equity and repayment of the Loan during 20years
Chemical Pulp                     56 US$/ADT
Mechanical Pulp                   50 US$/ADT
Fine Paper                        50 US$/ADT
Newsprint Paper                   50 US$/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                100             100
                                                Adt/Year           34,300           34,300
Volume of Jute, necessary for Pulp Manufacturing Adt/day             238               125
                                                Adt/Year           81,565           42,704
                                       GT(moi75%)/Year            293,608          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 :
                   orld
2001 Movement of W Paper, Paper Board & W     astes                                                                   Unit : 1,000 M/ t
                         Paper & Paper Board                                               Waste Paper
  Country         Production              Consumption   Recovery Ratio %=Recovery/ Consumption Utilization %= Consumption/ Production
           Production     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            9,556
China        37,929        1.194       44,130        34    16,344        37.00        23,718             63.50    7,580            206
Japan        30,717        0.990       30,931       243    14,841        48.00        13,569             44.20     214            1,488
Canada       19,828        1.045        9,132       294     1,478        16.20         3,647             18.40    2,171             3
Germany      17,879        1.122       18,543       226    11,526        62.20         9,105             50.90    1,599           4,020
Finland      12,503        1.029        1,949       376      698         35.80          635               5.10      37             100
Sweden       10,535        1.080        2,419       274     1,454        60.10         2,014             19.10     699             139
France        9,630        1.053       10,926       184     5,566        50.90         5,777             60.00    1,088            876
Korea         9,332        1.120        7,534       160     5,251        69.70         6,767             72.50    1,517             1
Italy         8,924        1.111       10,981       191     5,089        46.30         5,499             61.60     667             257
  orld
W Total 320,256            0.988      322,043        53   138,011        42.90       143,428             44.80   29,370          23,953
Total 1997  301,413                   300,563             111,157        37.00       112,645             37.40   18,687          17,199
Total 1998  301,736                   299,976             117,598        39.20       120,761             40.00   21,358          18,194
Total 1999  315,678                   319,945             128,093        40.00       131,227             41.60   23,582          20,448
Total 2000  324,046                   325,136             137,225        42.20       140,620             43.40   27,367          23,971



World Non- W ood & Wood Pulp Production and Consumption
 Year Non- W   ood Pulp 1,000M/ t    Wood Pulp 1,000M/ t  Total Pulp 1,000M/ t Non- Wood/ Total Pulp %
        Production Consumption Production Consumption Production Consumption Production Consumption
 1997      19,055       19,149      162,686      162,007 181,741       181,156   10.48        10.57
 1998      20,434       20,521      159,935      159,774 180,369       180,295   11.33        11.38
 1999      18,303       18,316      163,623      163,226 181,926       181,542   10.06        10.09
 2000      19,565       19,581      171,433      171,109 190,998       190,690   10.24        10.27
 2001      19,794       19,719      166,314      167,015 186,108       186,734   10.64        10.56
Base Data : FAO/ Year Book 2001 Forestry


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.
                                                                                      3
W orld Production of Lumber                                               Unit : 1,000M
   Year     Round Logs Fuel & Char Timber/ Veneer Pulp Logs       Others Pulp Log Share
                 A             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       13.83
   1999      3,333,574     1,778,235      946,633     459,257    149,449       13.78
   2000      3,377,282     1,788,952      962,030     478,025    148,275       14.15
   2001      3,327,617     1,784,294      924,035     469,505    149,783       14.11
Base Data : FAO/ Year Book 2001, Forestry
* Estimated
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 )

China : W ood Pulp : Production, Import, Export, Consumption
    Year        1997      1998      1999     2000     2000
Production       2,210     2,240     3,590     3,700   4,075
Import           2,567     3,150     3,985     4,031   5,814
Export               30       19        19        51       32
Consumption      4,748     5,371     7,556     7,680   9,857
Base Data : FAO/ Year Book 2001, Forestry
Unit : 1,000 Mt
China : Wood Pulp Share, Yearly Changes                      Unit : 1,000 Mt
            Year              1997      1998      1999      2000       2001
Wood Pulp Consumption           4,748    5,371     7,556      7,680      9,857
Non W ood Pulp Consumption 15,994 15,999          13,659    14,327 14,334
Total Pulp Consumption         20,742 21,370      21,215    22,007 24,191
Wood Pulp %in Total Pulp        22.89    25.13     35.62      34.90      40.75
Base data : FAO/ Year Book 2001, Forestry

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%.
2004 Outlook Domestic Demand for Paper and Paperboard                            Unit : 1,000 M/ t
                            2001               2002          2003(Preliminary)    2004 Outlook
        Grade                  Change %           Change %            Change %              Change %
Newsprint               3,736      1.0      3,702    - 0.9      3,671    - 0.8      3,702      0.8
Uncoated Printing       3,416     - 2.7     3,271    - 4.2      3,178    - 2.8      3,134     - 1.4
Coated Printing         6,376     - 1.3     6,314    - 1.0      6,535     3.5       6,640      1.6
Communication           1,867     - 1.3     1,888     1.1       1,939     2.7       1,956      0.9
Print/ Comu Total      11,659     - 1.7    11,473    - 1.6     11,652     1.6     11,730       0.7
Ubleached Packaging       622     - 5.5       595    - 4.3        596     0.2         594     - 0.3
Bleached packaging        367     - 4.2       359    - 2.2        349    - 2.8        343     - 1.7
Package Total             989     - 5.0       954    - 3.5        945    - 0.9        937     - 0.8
Hygienic                1,740      1.2      1,705    - 2.0      1,683    - 1.3      1,686      0.2
Others                  1,047     - 4.5     1,059     1.1       1,042    - 1.6      1,045      0.3
Paper Total            19,171     - 1.3    18,893    - 1.5     18,993     0.5     19,100       0.6
Linerboard              5,582     - 2.4     5,538    - 0.8      5,546     0.1       5,612      1.2
Corrugating Med         3,600     - 2.0     3,607     0.2       3,646     1.1       3,688      1.2
Container Total         9,182     - 2.2     9,145    - 0.4      9,192     0.5       9,300      1.2
W hite Board            2,010     - 3.0     2,025     0.7       2,030     0.2       2,031      0.0
Recycle Board             223     - 8.2       209    - 6.3        210     0.5         207     - 1.4
Folding Carton          2,233     - 3.5     2,234     0.0       2,240     0.3       2,238     - 0.1
Other Paperboard          946     - 6.0       878    - 7.2        881     0.3         878     - 0.3
Paperboard Total       12,361     - 2.8    12,257    - 0.8     12,313     0.5     12,416       0.8
Paper & Paperboard     31,532     - 1.9    31,150    - 1.2     31,306     0.5     31,516       0.7
Source : Japan Paper Association Jan 2004

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.
                         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. :


Non W ood Pulp Demand Forecast
                   Production (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 W    ood Pulp                                   73,647
Source : Non W   ood Paper Promotion Association
( ) included in main item
Target means %of Non W    ood Pulp to be applied
Mixing means %for Non W   ood Pulp to be mixed in the products

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
Pulp, Paper and Board Consumption and Production of 5 Major Jute / Kenaf Producing countris
  Country     Year      Number of Mills      Consumption            Production    Per Capita
                        Paper              Paper      000Mt     Paper      000Mt Consumption
                       & Board    Pulp    & Board      Pulp    & Board      Pulp        Kg
Bangladesh 2001           23       6        389        300        312        150         3
China         2001      4,700    4,500    37,581      22,464    33,400     17,570       29
India         2001       395      120       444       2,888     4,049       2,645        5
Nepal         2001         3       3         34         33         8          5        1.5
Thailand      2001        45       5       2,070       895       2,445       919       32.5

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.
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.

                                    Jute                      Kenaf             Pine     Poplar
                           Core     Bast    Whole     Core    Bast     Whole
Ash Content %                1.89    4.43      3.58    3.12     5.07     3.89     0.27    0.49
Cold Water Solubility % 2.44         4.51       4.12 9.29      13.15    10.82    4.45 1.55
Hot Water Solubility % 2.98          8.57       4.88 9.39      13.16    10.88    6.03 3.13
1/10 NaOH Solubility % 23.30        30.05      26.21 33.77    29.38    32.03    17.41 22.15
Alcohol Benzene %       2.75         3.73       2.65 2.79       2.45     2.66    2.62 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


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.
Fiber properties of Jute and Kenaf
                                      Jute                Kenaf            Pine       Poplar
                             Core Bast Whole      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       3.10
CPPRI 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             CPPRI              Kenaf      HW         SW
                      Un-       Un-                       Target     BKP        BKP
                      bleached bleached Bleached
Freeness    SR           17       32       30             25         14         20
            CSF ml      650       400      440            500        700        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        100%        60%              40%           0%
                  KENAF         0%        40%              60%         100%
 Basis Weight      g/m2          59.9          61.1        61.4        61.3
 Density           g/cm3          0.65         0.66        0.67        0.63
 Brightness        %              78.3         78.1        78.8        78.6
 Opacity           %              76.9         74.5        72.7        70.0
 Burst Index g/cm2/g/m            41.2         44.8        45.0        51.2
 Breaking Length      Km          6.20         6.60        6.99         7.26
 Tear Index       g/g/m2          89           123         141         170
 Folding endurance    time        53           113         177         356
 Air Permeability     sec         66           211         227         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
  Chemical pulp       Bio-Pulping           X                               X
                      Pulping               X        X            X                X
                      Bleaching             X        X            X                X
                      Pilot Scale           X        X
  Mechanical pulp Pulping                                                   X      X
                      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 Unscreened      Screen       Kappa
                         %         PH       yield %      rejects %     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
 Alkal     AQ     Cooking     Unscreene   Screen    K.      Burst        Tear       Tensile   Free-   Bright
 i                Time(min)   d           rejects   No.     Index        Index      index     ness    ness
   %                            yield                       Kpam2/g      MNm2/      Nm/g       SR
                                                                         g
 17.0      0.05     90          47.50       0.50    20.5        2.78         8.55   41.04       15    23.3
                                                    0
 15.5      0.05     90          48.00       0.85    24.2        2.07         13.4   44.68       14    22.1
                                                    0                    1
 17.0      0.05     60          46.80       1.38    21.0
                                                    0
 15.5      0.05     60          48.00       5.00    41.0
                                                    0
         C. subvermisipora-2
 Alkal     AQ     Cooking     Unscreene   Screen    K.      Burst        Tear       Tensile   Free-   Bright
 i                Time(min)   d           rejects   No.     Index        Index      index     ness    ness
   %                            yield                       Kpam2/g      MNm2/      Nm/g       SR
                                                                         g
 17.0      0.05      90          44.20     0.00     16.0        3.68     15.30      57.12       20    29.8
                                                    0
 15.5      0.05      90          44.25     0.00     18.7        3.58     14.33      58.76       20    27.7
                                                    3
 17.0      0.05      60          46.80     0.00     17.3        -            -        -         -      -
                                                    2
 15.5      0.05        60       46.66     0.00     18.1    -          -       -         -      -
                                                   8
         F. lignosus
 Alkal     AQ     Cooking    Unscreene   Screen    K.     Burst     Tear    Tensile   Free-   Bright
 i                Time(min   d           rejects   No.    Index     Index   index     ness    ness
   %              )            yield                      Kpam2/g   MNm2/   Nm/g       SR
                                                                    g
 17.0      0.0         90       42.12     0.00     17.5    3.56     14.80   51.00       21    29.6
                                                   0
 15.5      0.05        90       42.40     0.00     17.5    2.87     12.20   51.52       21    28.7
                                                   0
 17.0      0.05        60       43.60     0.00     19.3        -      -       -         -      -
                                                   5
 15.5      0.05        60       43.00     0.00     24.0        -      -       -         -      -
                                                   0


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     Chip were divided to moisture content of 66% with medium
   treatment           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    &       After the microbiological treatment, the jute was soaked in water
   Beating            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



                       Chip were divided to moisture content of 66% with medium
   Microbiological     medium: KH2PO4         100 mg/L
   treatment                    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
                     1.DTPA                  0.6%      60℃         1.0hr         5%
   Bleaching         2.H2O2                 5%         70℃         1.5hr        14%
   H2O2                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.    Yield     Burst    Tensile Dnsity Freeness
                                                           Tear
    %       %                  No.     %        Index    Index
                                                           Index
                                          Kpam2/g mNm2/g KN/m    Kg/m3 °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               520        17
                                                                       45.21


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
  Cooking M:L       NaOH      AQ           Yield       K.                 Cellulose      Cellulose
    Time              %             Unscreene screened No.                   DP          Viscosity
                   Chage                   d                                                MPa.s
                   Consum
    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     Screened
   %       %                      Yield %       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%         AQ        Cooking        Cooking     Yield     M:L     Kappa
              as Na2O                   Temperature    Time(min)                     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         30            30
                             100℃ to 165℃    min       90            90
                             At 165℃         min       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    Temperature    PH       Consis-tenc
                                            Time(min)       ℃                   y
                                                                                %
      X       2 IU/g of pulp                  60            50          5-8         10
      D1      70%    of    total   active     60            70        3.5-4.0       08
              chlorine
      E       NaOH 2%                         60            70        11-12         10
      D2      30%    of    total   active     60            70        3.5-4.0       08
              chlorine
Results DED with and without enzyme (Soda-AQ Process) From IJSG / BCIC report
table27
  Bleaching D1 ClO2 %     D2 ClO2 %     TotalClO2 Bright- Bleaching Viscosity
  Sequence  as active Cl2 as active Cl2 Reduction  ness    Yield    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 Cl2               Alkali       Hypo Added Brightness Viscosity
  Sequence     consumption    Added        %                          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 D1 ClO2 % D2ClO2 %    TotalClO2       Bright-     Bleaching
               Sequence as   active as  active Reduction        ness       Yield
                         Cl2        Cl2
 Check         DED           2.70         1.80          -        78.31
                                                                           95.45
 Not fungi     X-DED         2.60         1.73        3.78%      80.13
 Treatment                                                                 95.55
 Fungi         X-DED         2.50         1.66        7.56%      81.25
 treatement                                                                94.75
Condition of pulp bleaching in X- DED                                             From IBFC report table4
 Symbol      Initial           Final           Reactio        Temperatur          PH          Consistency
             K.No              K.No          n                e                                   %
                                             Time(min)          ℃
   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                      Reactio   Temperatur             PH           Consis-
             Charge                 Consumed        n             e                                    tency %
                                                    Time(min)          ℃
   D1        ClO2      1.74%      ClO2                   60                70             5.5          10
                                  1.64%
   E         NaOH 2.29%                                  60                60            11.7          10
   D2        ClO2      1.00%      ClO2                  120                70             3.3          10
                                  0.91%
    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                      Reactio   Temperatur             PH        Consis-
             Charge                 Consumed        n             e                                    tency %
                                                    Time(min)          ℃
   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
 Bleaching          D1 ClO2 %            D2 ClO2 %        TotalClO2    Bright-           Bleaching
 Sequence         0.25*K/2.63                             Reduction        ness          Yield
 DED                   1.64                  0.91               -           81.7                94.3
 XE-DED                1.15                  0.94             18.0%         83.9                93.1

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
delignification.
Bleaching Condition is summarized as follows

Cooking condition of each bleaching stage
 Symbol         Institution Reaction      Temperature PH             Consistency NaOH
                             Time(min)       ℃                          %         %
                 IJSG/BCIC    60               50        5-8           10
       X         IBFC         60               50        6.5            5
                 CTP         120               50        7.1            5
                 IJSG/BCIC    60               70      3.5-4.0          8
       D         IBFC         60               70                       7
                 CTP          60               70        2.9           10
                 IJSG/BCIC    60               70      11-12           10        2.0
       E         IBFC         60               60                       5
                 CTP          60               60       11.6           10        2.5
                 IJSG/BCIC    60               70      3.5-4.0          8
       D         IBFC         60               70                       7
                 CTP         120               70       3.3            10

Reduction Effect of Chlorine Dioxide (ClO2) by adding Xylanase
 Institution Bleaching D1                D2            TotalClO2       Bright- Bleaching
              Sequence ClO2 %            ClO2 %        Reduction        ness    Yield
                           as active Cl2 as active Cl2
 IJSG/BCIC DED                3.20           1.36                       79.15   95.12
              X4-DED          2.87           1.23        10.09%         82.15   94.72
 IBFC         DED             2.70           1.80                       78.31   95.45
              X-DED           2.60           1.73         3.78%         80.13   95.55
 CTP          DED             1.64           0.91                       81.7    94.3
              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       Tempera PH         Consistency % Chemical
            Time(min)   ture ℃                            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 ;

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

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

                                         IBFC
Bio-Bleaching X-D-E-D
                 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                      5 US$/L     -       -        1.00              5.00
ClO2    NaClO3          1,000 US$/T  29.48   29.78       26.50            26.77
ClO2 H2SO4                138 US$/T  13.87    1.93       12.47             1.74
ClO2    CH3OH           1,310 US$/T   3.47    4.59        3.12             4.13
Caustic Soda(50%)         414 US$/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

                                                                        IJSG BCI
Bio-Bleaching X-D-E-D                                       /                C
                                             D-E-D                  X-D-E-D
                       Unit                          Cost                 Cost
                      price
                                     kg/ADT US$/ADT kg/ADT US$/ADT
Enzyme                      5 US$/L      -       -       1.00  5.00
ClO2    NaClO3          1,000 US$/T   29.09   29.38     27.99 28.27
ClO2 H2SO4                138 US$/T   13.69    1.91     13.17  1.84
ClO2    CH3OH           1,310 US$/T    3.42    4.53      3.29  4.36
Caustic Soda(50%)         414 US$/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 ;


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

                                                                           IJSG / BCIC
Bio-Bleaching X-C-E-H
                                       C-E-H                     X-C-E-H
                    Unit price                           Cost                 Cost
                                          kg/ADT US$/ADT          kg/ADT US$/ADT
Enzyme                       5 US$/L        -              -       1.00       5.00
Cl2                       505 US$/T       44.00          22.44    37.60      19.18
Ca(OCl)2                  800 US$/T       26.79          21.65    26.79      21.65
Caustic Soda(50%)         414 US$/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        32.0           16.95
                                       0.35-0.50mm        25.0           20.00
                                       0.50-0.75mm        25.0           32.40
                                       0.75-1.00mm          8.0          15.30
                                       1.00-2.00mm        10.0           13.00
                                       2.00-3.00mm          0.5           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,
because alkali removed the xylans in the pulp during impregnation.
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
                                                JUTE 108ml CSF
  Chelation       Consisitency    %                 5
   DTPA           Temperature      ℃               70
                  Time            min.             30
                  DTPA charge     %                0.5
                  PH final                         7.9
                  Brightness      %               45.7
                  ISO
  Hydrogen        Consisitency    %                  10
  Peroxide        Temperature     ℃                  70
  Bleaching
                  Time            min.              120
                  Cahrge     H2O2   %                3.0
                             NaOH %                  1.5
                                                     4.0
                  Silicate   %                       0.5
                             DTPA %
                  Consume    H2O2 %                  1.76
                  Final PH                           10.2
                  Brightness                         59.2


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
  Stage                Chemical charge   Consistency Temperature   Time
1. Impregnation        NaOH      3%
                       H2O2     1%        18 – 24%      80℃        20 min
                       Silicate 4%                   Pressure 2
                       DTPA      0.5%                bar

2. Primary refiner
3. Secondary refiner
4. Hydrogen peroxide   H2O2     3.0%      10%            70℃       120min
   Bleaching           NaOH       1.5%
                       Silicate  4.0 %
                       DTPA      0.5%
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.     Yield    Burst       Tear          Tensile    Dnsity     Freeness
                    No.     %       Index       Index         Index      Kg/m3      °SR
                                    Kpam2/g     mNm2/g        KN/m
 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& pulp sheet chemical recovery total
                                       bleaching                 recovery  boiler
 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                                 270,000
        Chipping, Screening                                              2,440,000
        Cooking                                                          3,729,000
        Washing & Screening                                              5,518,000
        Enzyme Bleaching                                                 3,210,000
        Bleaching                                                        8,956,000
        Dry Pulp                                                         8,045,000
        Vacuum Evaporator                                                1,602,000
        Recovery Boiler                                                  3,782,000
        Causticizing                                                       855,000
        Kiln                                                             1,420,000
        Power Receiving, Transforming, Generating                        7,560,000
        Water Intake                                                       530,000
        Effluent Treatment                                               1,130,000
        Compressor                                                         350,000
        Spare Parts    46,015,000*0.02=920,000                             920,000
        Civil Works, Architect Works and Foundations for Machineries     5,907,000
                                   Direct Construction Cost Total       56,224,000
        Engineering Fees                                                 3,655,000
        Construction Supervising Fees                                    3,373,000
        Transportation and Others                                        1,124,000

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

        Others
        Social and Welfare Facilities                                      150,000
        Contingency                                                      1,931,000
                (3% of Total Construction cost for Price Fluctuation)
        Additional Works(2% of Total Construction cost)                  1,287,000
        Pre-Operation Cost(Investigating Cost, F/S Fees)                   250,000
        Legal Fees (Registration Fees, Establishment fees,                 200,000
                     Contract arrangement, lawyers Fees)
        Working Capital              $500/ADTX101ADT/DX180Days           9,090,000
        Land Acquisition               $7,000/haX14ha                       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                                 40,000
          Truck scale                                            2 sets     80,000
          Receiving facility/Transportation conveyor600W*500mL             150,000
          Total                                                            270,000

6-2-3-2     Chipping & Screening
          Rotary Drum Chipper              12T/hr                 2sets     800,000
          Knife grinder                    7.5KW                  1set       10,000
          Dust separating unit                                    1set      900,000
          Chip Conveyors                                          4sets     200,000
          Chip Silo                9mφ*15mH concrete 950m3        1set       60,000
          Discharge Conveyor                                      1set      150,000
          Steel fabricating              20Ton SS                 1set       60,000
          Piping                        2,000BM SS                1set       30,000
          Installation                  40Ton                     1set       30,000
          Electricity                   250KW (Low voltage)       1set      200,000
          Total                                                           2,440,000

6-2-3-3     Cooking
          Chip Bin            5m3 SS 800Kg                        1set        3,000
          Screw feeder        500mmφ*160KW                        1set      500,000
          Pandia Digester     1,450φ*13,600L*5.5KW*Double         3set    2,000,000
          Discharger                                              1set      150,000
          Tanks               SS   25Ton                          1set       85,000
          Agitators                                               1set       20,000
          Pumps                                                   1set       10,000
          Steel fabricating    SS 10Ton, SUS 2Ton                 1set       40,000
          Piping               SUS 3,000BM, SS 3,000BM            1set      141,000
          Installation        100Ton                              1set       60,000
          Electricity         600KW (Low voltage)                  set      420,000
          Instrumentation     25 Loops                             set      300,000
          Total                                                           3,729,000
6-2-3-4    Washing & Screening
          High Density Cleaner       1.5m3/min                  3sets        20,000
          Vacuum Drum Washer         50m2*30KW       @850,000   3sets     2,550,000
                                      with repulper 11KW,15KW
          Foam Breaker                22KW with cyclone         2sets        15,000
          Black Liquor Filter         1,200φ*1,200L 2.2KW       1set         40,000
          Filtrated Tanks            SS    50Ton                1set        100,000
          Pumps & Blowers                                      16sets        55,000
          Over head Crane              15Ton 11KW               1set         60,000
          Vibrating Screen Knotter    2m2*3.7KW                 3sets        90,000
          Centrifugal Screens         75KW,30KW                 1set        200,000
          Vibrating Screen             3.7KW                    1set          4,000
          Centricleaners 4stages      100T/D                    1set        130,000
          Thickner with extractor     40m2+50m2 11KW、30KW       1set        750,000
          Tanks                      20m3, 15m3, 60m3           1set        100,000
          Agitators                                             2sets        18,000
          Pumps                                                12sets        35,000
          Pulp conveyer               600W*15,000L*5.5KW        1set         45,000
          Steel fabricating           SS 10Ton, SUS 2Ton        1set         45,000
          Piping                      SUS 4,000BM, SS 2,000BM   1set        165,000
          Installation               25Ton                      1set          6,000
          Electricity                1,055KW (Low Voltage)      1set        850,000
          Instrumentation            20 Loops                   1set        240,000
                                                             小 計          5,518,000

6-2-3-5    Bleaching
          Enzyme Bleaching
          Extractor                   30m2X18.5KW           1set            200,000
          Valveless filter           50m2X22KW              1set            500,000
          Double washer               50m2X22KW             1set          1,500,000
          Steam Mixer                 400φ*2,000L*25KWSUS   1set            170,000
          Feed Tank                   SUS 30m3              1set              50,000
          Medium consis. Pump        100T/D 22KW            1set            120,000
          Medium consis. Mixer       100T/D 22KW SUS        1set            120,000
          Enzyme Reactor             50m3 SUS304L           1set            350,000
          Auxiliaries                                       1set            100,000
          Stock Tank                 100m3 SUS304           1set            100,000
          Enzyme washer filtrated pit 30m3 Concrete         1set        Civil work
          Total                                           小 計             3,210,000
          Bleaching
ClO2 Washer                 45m2/unit*22KW             2sets     1,400,000
Alkali Washer               45m2/unit*22KW             1set        700,000
Medium Con. Pump             100T/D                    2sets       230,000
Static Mixer                                           1set           4,000
Medium Con.Mixer            100T/D 22KW SUS            1set        120,000
Enzyme Bleaching HDT         500m3 Concrete            1set        100,000
Chlorine Dioxide Tower      100m3 Concrete             1set          60,000
Alkali Tower                100m3 Concrete             1set          60,000
Chlorine Dioxide Tower      160m3 Concrete             1set          80,000
High Density Tank           450m3 Concrete             1set        100,000
Filtrated Pit               30m3 Concrete + Tiles      3sets   Civil work
D Tower Agitator           650φ*22KW Rubber Lining     2sets         60,000
Chlorine Dioxide Mixer      700φ*2,200L*30KW           1set          20,000
Alkali Mixer                Double Shaft*22KW*2sets    1set          24,000
D Tower Top Scraper        3,600φ*22KW                 1set          40,000
EO Tower Top Scraper        3,600φ*22KW                1set          40,000
D Tower Top Scraper        4,500φ*22KW                 1set          45,000
HDT Agitators               1,300φ*30KW                4sets       140,000
Pumps & Blowers                                       20sets         85,000
Screw Conveyers            450φ*10,000L*5.5KW          2sets         50,000
Chlorine Dioxide Generator 3.0T/D                      1set      4,300,000
Steel fabricating         SS 10Ton, SUS 5Ton           1set          60,000
Piping                    SUS 5,000BM, SS 1,500BM      1set        193,000
Installation             20Ton                         1set          12,000
Electricity              790KW (Low Voltage)           1set        553,000
Instrumentation          40 LOOPS                      1set        480,000
Sub Total                                                        8,956,000
6-2-3-6     Dry Pulp
          Double Wire Machine     2,300W*55KW               1set      900,000
          Squeezing Press         High Nip Press            1set      900,000
          Flakt Dryer                                       1set    3,500,000
          Hood                                              1set      250,000
          Air Supply Fan          500m3/min*700mmAQ*90KW    1set       20,000
          Exhaust Fan             800m3/min*85mmAQ*37KW     1set       10,000
          Cutter                  130T/D                    1set      450,000
          Press & Wrapping       130T/D                     1set      450,000
          Chest Agitators        900φ*22KW                  4sets      61,000
          Pumps                                            20sets     125,000
          Broke Extractor        11KW                       1set      100,000
          Over Head Crane        5.0TON*5.5KW               1set      100,000
          Folk Lift              1.5TON                     2sets      50,000
          Steel fabricating      SS 10Ton, SUS 5Ton         1set       60,000
          Piping                 SUS 4,000BM, SS 2,000BM    1set      142,000
          Installation          300Ton                      1set      180,000
          Electricity           810KW (Low Voltage)         1set      567,000
          Instrumentation       15 Loops                    1set      180,000
          Total                                                     8,045,000

6-2-3-7     Chemical Recovery
          Vacuum Evaporator     4 effects                   1set      800,000
          Weak Liquor Tank      400m3 8500φX7000H           1set      200,000
          High Con. Black TK    180m3 5500φX7600H           1set      100,000
          Pumps                                            14sets      47,000
          Steel fabricating      SS 10Ton                   1set       30,000
          Piping                 SS 4,000BM                 1set       48,000
          Installation          25Ton                       1set       15,000
          Electricity            175KW (Low Voltage)        1set      122,000
          Instrumentation       20 Loops                    1set      240,000
          Total                                                     1,602,000
 Recovery Boiler
Recovery Boiler         50Kg/Cm2 100ADT/D               1set    2,500,000
Electric Precipitator                                   1set      300,000
Stack                  Concrete 45m High                1set      100,000
Duct Work for Boiler                                    1set      100,000
Steel fabricating       SS15Ton, SUS 3Ton               1set       70,000
Piping                 SS 5,000BM, SUS 1,000BM          1set       90,000
Steam Piping            SS 5,000BM                      1set       60,000
Installation            Auxiliary only 20 Ton           1set       12,000
Electricity without Boiler 250KW                        1set      250,000
Instrumentation without Boiler 25 Loops                 1set      300,000
Total                                                           3,782,000

Causticizing
 Green Liquor Clarifier     SS 200M3 1.5KW              1set      50,000
 Dregs Filter                1,000φ*1,000L 0.75KW       1set      15,000
 Lime slaker                 2,000φ*2,000H 1.5KW        1set      20,000
 Causticizer                20m3                        3sets     20,000
 Lime Mud Washer           1.5KW                        1set      15,000
 White Liquor Clarifier    300m3 5KW、3.7KW              1set     100,000
 Lime Mud Filter          2,000φ*1,500L 2.2KW           1set      35,000
 Tanks/            1,200φ*1,400H,1,350φ*2,000H,100m3    3sets     20,000
 Others                                                 1set       5,000
 Pumps                                                 12sets     10,000
 Screw Conveyers           2T/H 2.2KW                   3sets      5,000
 Steel fabricating        SS 5Ton, SUS 5Ton             1set      40,000
 Piping                   SS 2,500BM, SUS 3,000BM       1set     150,000
 Installation            30 Ton                         1set      20,000
 Electricity             150KW (Low Voltage)            1set     150,000
 Instrumentation         20 LOOPS                       1set     200,000
 Total                                                           855,000
           Kiln
          Lime Crasher                 3T/H 22KW                       1set       20,000
          Lime Stone Crasher           22KW、100KW                      1set       50,000
          Rotary Kiln                2,500mmφ*70,000mmL                1set      600,000
          Exhaust Gas Scrubber       300m3/min、SUS                     1set       50,000
          Lime Stone Hopper           10m3、0.2KW、0.2KW                 1set       10,000
          Lime Stone Storage          50m3、0.2KW、0.1KW                 1set       20,000
          Incinerated Lime Hopper    24m3                              1set       10,000
          Tank                       6m3                               1set       10,000
          Pumps & Fans                                                 4sets       5,000
          Conveyer                   4T/H,5T/H、2.2KW                   4sets     110,000
          Shovel Loader               Lime Mud                         1set       20,000
          Steel fabricating           SS 5Ton                          1set       15,000
          Piping                     SS 2,000BM SUS 1,000BM            1set       50,000
          Installation               200 Ton                           1set      100,000
          Electricity                250KW (Low Voltage)               1set      200,000
          Instrumentation             15 Loops                         1set      150,000
          Total                                                                1,420,000

6-2-3-8     Gas Boiler, Electricity Receiving & Transformer Facility
          Natural Gas Boiler             50Kg/Cm2 450℃                 1set    2,000,000
                                          Steam 20T/Hr
          Duct work                                                    1set      100,000
          Steel fabricating              SS15Ton, SUS 3Ton             1set       45,000
          Piping                         SS 5,000BM, SUS 1,000BM       1set       95,000
          Steam Piping                   SS 5,000BM                    1set       60,000
          Installation                  20 Ton                         1set       10,000
          Electricity without Boiler    250KW                          1set      250,000
          Instrumentation without Boiler 25 Loops                      1set      300,000
          Sub-Total                                                            2,860,000

          Electricity Generator
          Extracted Back Pressure Turbine for Recovery Boiler
                                  AC Generator 2,500KWX4000V。                  1,900,000
          Back Pressure Turbine for Gas Boiler
                                  AC Generator 2,500KWX4000V。                  1,900,000
          Electricity                                                            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  1set      200,000
          Water Intake Pump               10m3/minX10mX45KW      1set       20,000
          Water Pit                      Concrete 100m3          1set       35,000
          Water Pump                      10m3/minX10mX45KW      2sets      20,000
          Flocculant Sedimentation Pit   Concrete 100m3          1set       35,000
          Water Pump                     3.0m3/min*30m*30KW      4sets      10,000
          Steel fabricating               SS 2Ton                1set        8,000
          Piping                         SS 4,000BM              1set       48,000
          Installation                   5 Ton                   1set        4,000
          Electricity                    150KW                   1set      150,000
          Total                                                小 計         530,000

          Effluent Treatment Facility (13,000m3/D)
          Effluent Pit                        15m3               1set       25,000
          Conical Filter                      3.7KW              1set       25,000
          Neutralized Pit                    20m3                1set       35,000
          Primary Clarifier                  25mDia.   11KW      2sets     100,000
          Aeration Pit                       2,500m3 110KW       1set      250,000
          Secondary clarifier                25mDia.   11KW      2sets     100,000
          Chemical Supply Unit              10KW                 1set       10,000
          Pumps                                                  6sets      60,000
          Belt Filter                       30KW                 1set      100,000
          Steel fabricating                 SS 2Ton              1set       10,000
          Piping                            SS 10,000BM          1set      100,000
          Installation                     8 Ton                 1set        5,000
          Electricity                      280KW (Low Voltage)   1set      250,000
          Instrumentation                  5 Loops               1set       60,000
          Total                                                          1,130,000



          Others
          Compressor 25 Nm3/min                                  3set      300,000
          Receiver Tank, Air Dryer                               1set       50,000
          Spare parts, Tools, etc                                1set      920,000
          Total                                                          1,270,000
6-2-3-9    Civil Engineering & Architect Work
                                           Overall Area     Unit Cost   No.    Cost
          Raw Material Preparation Room        400m2       @250$/m2      1       100,000
          Chipping Room                        300m2       @250$/m2      1        75,000
          Chip Screening Room                  600m2       @250$/m2      1       150,000
          Cooking Room                         800m2       @250$/m2      1       200,000
          Pulping Room                       2,025m2       @250$/m2      1       507,000
          Bleaching Room                     3,000m2       @250$/m2      1       750,000
          Pulp Drying Room                   4,800m2       @250$/m2      1     1,200,000
          Pulp Warehouse                     3,000m2       @250$/m2      1       750,000
          Recovery Boiler Room               1,500m2       @250$/m2      1       375,000
          Office                              400m2        @350$/m2      1       140,000
          Social & Welfare facility           600m2        @350$/m2      1       210,000
          Maintenance Room                    400m2        @250$/m2      1       100,000
          Material Warehouse                  200m2        @250$/m2      1        50,000
          Chemical Warehouse                 400m2         @250$/m2      1       100,000
          Total                                                                4,707,000

          Foundation for Machineries                                    1set      900,000
          Civil works around the site/Sewer, Fence, etc                 1set      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                 3,655,000
          6.5% of Direct Construction Cost
       Construction Managing Cost                           1set                3,373,000
         6.0% of Direct Construction Cost
       (Supervising Fees, Site Management, Consulting Fees, Insurance
           Project Implementation Cost, Temporary Facility)
          Transportation & etc                                1set              1,124,000
            2.0% of Direct Construction Cost

           Total                                                                8,152,000


           Grand Total                                                         64,376,000



          Social and Welfare facility                          1set               150,000
Contingency (Preparation for Machineries Variable)   1set        1,931,000
  3.0% of Total Construction Cost
Additional Works                                  1set           1,287,000
  2.0% of Total Construction Cost
Pre-Operation Expenses (Investigating Fees, F/S Fees)1set         250,000
Legal Expenses                                     1set           200,000
(Registration, Establishment, Contracting Arrangement, Lawyer)
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             Annual
                                          Rate          Depreciation
                                                             Costs

     Machinery          $58,469,000        4.5%           $2,613,105
     Building
                        $ 5,907,000       3.17%             $187,055
     Facilities
   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-D
                 Chemical Price in Bangladesh                 Jute
Dry pulp production                        100 ADt/D                 34,300 ADt/Year
Bleached pulp production                   101 ADt/D                 34,643 ADt/Year
                                       Unit price             Unit consumption             Cost %/TotalCost
Variable 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 Depreciation
    Depreciation 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    $67,382,000*0.9/100/34300                                                 17.68
    Sales cost    2% of sales price                                                         10.00
   Inland freight                                                                            5.00
Total Head office cost                                                                      32.68     7.5%
Total Manufacturing Cost                                                                  434.63    100.0%
Sales Unit Price (Domestic)                                                               600.00
Business Profit                                                                           165.37
Profit Tax                      37.5%                                                      62.01
Profit after Tax                                                                          103.35
Cash Flow                                                                                 185.52
Cash Flow = Profit after Tax + Depreciation
            Case2 Bio-Bleaching X-D-E-D
                   Chemical Price in India                       Jute
Dry pulp production                              100 ADt/D              34,300 ADt/Year
Bleached pulp production                         101 ADt/D              34,643 ADt/Year
                                              Unit price         Unit consumption           Cost   %/TotalCost
Variable Cost                                                                              US$/ADT
     Raw material Juet(100%)                   62.07 US$/ADT          2.38    ADT/ADT       147.43    35.8%
                                                                      0.421   Yield
           Energy Steam/Natural gas         67.76 US$/Km3          466.69     m3/T            31.94
                  Kiln/Natural Gas          67.76 US$/Km3            75.90    m3/T             5.19
                  Electric power          Self generated Electricity
                  Sub-total                                                                   37.14     9.0%
Chemical
          Cooking Caustic Soda(100%)       348.00 US$/T             43.70     kg/ADT          15.36
                   Anthraquinone(22%)      478.00 US$/T              4.85     kg/ADT           2.34
        Bleaching Enzyme                     5.00 US$/L              1.00     L/ADT            5.05
                   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
              Kiln Lime                     16.30 US$/T           206.90      kg/ADT           3.41
          Dry pulp Slime control             8.70 US$/kg             0.10     kg/ADT           0.88
                   Antiseptic agent etc                                                        5.05
                   Sub-total                                                                  57.38    13.9%
           Others Water Supply              0.010 US$/m3          129.00      m3/ADT           1.29
                   Effluent                 0.020                 129.00                       2.58
                   Other: Pulping Recovery division: wire/screen plate                         8.00
                   Others: Dry pulp division wire, felt, canvas                                6.00
                   Sub-total                                                                  17.87     4.3%
Total Variable Cost                                                                          259.82    63.0%
Fix cost                                 US$/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     2.3%
      Maintenance Maintenance material                                                        13.00
                  Maintenance cost                                                            10.00
                  Sub-total                                                                   23.00     5.6%
                                                                 Investment Depreciation
      Depreciation 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    19.9%
   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
Business Profit                                                                              187.76
Profit Tax                         37.5%                                                      70.41
Profit after Tax                                                                             117.35
Cash Flow                                                                                    199.51
Cash Flow = Profit after Tax + Depreciation
           Case3 Bio-Bleaching X-D-E-D
                Chemical Price in Bangladesh              Kenaf
Dry pulp production                     100 ADt/D            34,300 ADt/Year
Bleached pulp production                101 ADt/D            34,643 ADt/Year
                                       Unit price         Unit consumption            Cost %/TotalCost
Variable Cost                                                                       US$/ADT
  Raw material Kenaf(100%)                49.66 US$/ADT          2.38    ADT/ADT     117.95   29.1%
                                                                 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     9.2%
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$/kg             0.10   kg/ADT        0.96
                Antiseptic agent etc                                                   5.05
                Sub-total                                                             79.77     19.7%
         Others Water Supply            0.010 US$/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      4.4%
Total Variable Cost                                                                  252.73     62.4%
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     2.4%
   Maintenance Maintenance material                                                    13.00
               Maintenance cost                                                        10.00
               Sub-total                                                               23.00     5.7%
                                                          Investment Depreciation
   Depreciation 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     20.3%
 Administration                                                                        5.00
Total fixed Cost                                                                     119.74     29.6%
Total Mill Cost                                                                      372.47     91.9%
Head office Cost
      Interest    $67,382,000*0.9/100/34300                                            17.68
   Sales cost     2% of sales price                                                    10.00
   Inland freight                                                                       5.00
Total Head office cost                                                                 32.68     8.1%
Total Manufacturing Cost                                                             405.15    100.0%
Sales Unit Price (Domestic)                                                          600.00
Business Profit                                                                      194.85
Profit Tax                     37.5%                                                  73.07
Profit after Tax                                                                     121.78
Cash Flow                                                                            203.95
Cash Flow = Profit after Tax + Depreciation
           Case4 Bio-Bleaching X-D-E-D
                  Chemical Price in India                  kenaf
Dry pulp production                       100 ADt/D            34,300 ADt/Year
Bleached pulp production                  101 ADt/D            34,643 ADt/Year
                                        Unit price         Unit consumption           Cost   %/TotalCost
Variable Cost                                                                        US$/ADT
    Raw material Kenaf(100%)               49.66 US$/ADT        2.38    ADT/ADT       117.95     30.8%
                                                                0.421   Yield
           Energy Steam/Natural gas    67.76 US$/Km3         466.69     m3/T            31.94
                  Kiln/Natural Gas     67.76 US$/Km3           75.90    m3/T             5.19
                  Electric power    Self generated Electricity
                  Sub-total                                                             37.14      9.7%
Chemical
        Cooking Caustic Soda(100%) 348.00 US$/T                 43.70   kg/ADT          15.36
                  Anthraquinone(22%) 478.00 US$/T                4.85   kg/ADT           2.34
       Bleaching Enzyme                    5.00 US$/L            1.00   L/ADT            5.05
                  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
             Kiln Lime                    16.30 US$/T          206.90   kg/ADT           3.41
        Dry pulp Slime control             8.70 US$/kg           0.10   kg/ADT           0.88
                  Antiseptic agent etc                                                   5.05
                  Sub-total                                                             57.38     15.0%
          Others Water Supply             0.010 US$/m3         129.00   m3/ADT           1.29
                  Effluent                0.020                129.00                    2.58
                  Other: Pulping Recovery division: wire/screen plate                    8.00
                  Others: Dry pulp division wire, felt, canvas                           6.00
                  Sub-total                                                             17.87      4.7%
Total Variable Cost                                                                    230.33     60.2%
Fix cost                           US$/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      2.5%
     Maintenance Maintenance material                                                   13.00
                 Maintenance cost                                                       10.00
                 Sub-total                                                              23.00      6.0%
                                                           Investment Depreciation
     Depreciation 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     21.5%
  Administration                                                                         5.00
Total fixed Cost                                                                       119.74     31.3%
Total Mill Cost                                                                        350.07     91.5%
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
Business Profit                                                                        217.25
Profit Tax                      37.5%                                                   81.47
Profit after Tax                                                                       135.78
Cash Flow                                                                              217.94
Cash Flow = Profit after Tax + Depreciation
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
        B. Return on Equity ( Profit after Tax / Paid Capital + Cash Surplus )
                                     In 10th Year
        C. IRR : Internal Rate of Return
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 4 th 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/M   3      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               Mechanical processing
                                           Heating Chemical        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        ℃ Atmospheric pressure or Over
                                           Na2SO4/NaOH             100℃    Over 100℃
APMP       Alkaline peroxide               Impregnation NaOH       Over 100℃       Over 100℃
                     mechanicalpulp        H2O2 DTPA Silicate      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 ;



  Stage                Chemical charge        Consistency   Temperature        Time
1.Impregnation           NaOH        3.0%
                         H2O2        1.0%       18-24%         80℃             20min.
                         Silicate    4.0%                   Pressure 2 bar
                         DTPA        0.5%
2.Primary refiner
3.Secondary refiner
4.Hydrogen eroxide       H2O2        3.0%       10%                70℃         120min
  Bleaching              NaOH         1.5%
                         Silicate    4.0 %
                         DTPA        0.5%


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%
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        M 3          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     M 3/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                                 250,000
        Chipping, Screening                                              2,440,000
        APMP Pulping                                                     9,040,000
        Screening                                                        2,343,000
        H2O2 Bleaching                                                   3,310,000
        Dry Pulp                                                         8,045,000
        Gas Boiler, Power Receiving, Transforming, Generating            9,545,000
        Water Intake                                                       466,000
        Effluent Treatment                                               1,030,000
        Compressor                                                         290,000
        Spare Parts                                                         31,800
        Civil Works, Architect Works and Foundations for Machineries     4,675,000
                                   Direct Construction Cost Total       41,465,800
        Engineering Fees                                                 2,695,000
        Construction Supervising Fees                                    2,488,000
        Transportation and Others                                          829,000

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

        Others
        Social and Welfare Facilities                                      150,000
        Contingency                                                      1,424,000
                (3% of Total Construction cost for Price Fluctuation)
        Additional Works(2% of Total Construction cost)                    950,000
        Pre-Operation Cost(Investigating Cost, F/S Fees)                   250,000
        Legal Fees (Registration Fees, Establishment fees,                 200,000
                     Contract arrangement, lawyers Fees)
        Working Capital              $500/ADTX101ADT/DX180Days           9,090,000
        Land Acquisition               $7,000/haX9ha                        63,000
                                                Others Total            12,127,000

                                              Grand Total               59,604,800
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                                 20,000
       Truck scale                                            2 sets     80,000
       Receiving facility/Transportation conveyor600W*500mL             150,000
       Total                                                            250,000
7-2-3-2 Chipping & Screening
       Rotary Drum Chipper               12T/hr                2sets     800,000
       Knife grinder                      7.5KW                1set       10,000
       Dust separating unit                                    1set      900,000
       Chip Conveyors                                          4sets     200,000
       Chip Silo                  9mφ*15mH concrete 950m3      1set       60,000
       Discharge Conveyor                                      1set      150,000
       Steel fabricating                 20Ton SS              1set       60,000
       Piping                            2,000BM SS            1set       30,000
       Installation                      40Ton                 1set       30,000
       Electricity                      250KW (Low voltage)    1set      200,000
       Total                                                           2,440,000
7-2-3-3 Pulping APMP
       Chip Bin                      10m3 SS 2000Kg            1set       10,000
       Screw feeder                 500mmφ*15KW                1set      150,000
       Chip Washer                                             1set      250,000
       Drainer                                                 1set      200,000
       Screw Press                                             1set      250,000
       Impregnator                                             1set    1,000,000
       Feed Screw                                              1set       30,000
       Primary Refiner              5000kw                     1set    1,500,000
       Blow Cyclon & Feeder                                    1set      300,000
       Secondary Refiner            2500kw                     1set      900,000
       Heat recovery System                                    1set      750,000
       Refiner Chest & Agitator                                1set       20,000
       Tanks                        SUS 25Ton                  1set      200,000
       Pumps & Others                                          1set      150,000
       Steel fabricating           SS10Ton, SUS 5Ton           1set      100,000
       Piping                      SUS 2,800BM, SS3,000BM      1set      140,000
       Installation 300Ton                                     1set      150,000
       Electricity 450kw(Low voltage), 8000kw(High voltage)    1set    2,500,000
       Instrumentation 50loops                                 1set      350,000
       Total                                                           9,040,000
7-2-3-4     Screening
          Over head Crane           30Ton 22KW                  1set     200,000
          Centrifugal Screens       75KW,30KW                   1set     200,000
          Tail Cleaner                                         1set       15,000
          Centricleaners 4stages     100T/D                    1set      130,000
          Thickner with extractor    40m2+50m2 11KW、30KW       1set      750,000
          Tanks                     20m3,15m3,60m3             1set      100,000
          Agitators                                            1sets      18,000
          Pumps                                               10sets      35,000
          Pulp conveyer              600W*15,000L*5.5KW        1set       45,000
          Steel fabricating          SS 7Ton, SUS 2Ton         1set       40,000
          Piping                     SUS 4,000BM, SS 1,000BM   1set      150,000
          Installation              10Ton                      1set       10,000
          Electricity               450KW (Low Voltage)        1set      450,000
          Instrumentation           15Loops                    1set      200,000
                                                            小 計        2,343,000
7-2-3-5    Bleaching         H2O2 Bleaching
          Extractor                 30m2X18.5KW           1set           200,000
          Valveless filter          50m2X22KW             1set           500,000
          Double washer             50m2X22KW             1set         1,500,000
          Steam Mixer               400φ*2,000L*25KWSUS   1set           170,000
          Feed Tank                 SUS 60m3              1set           100,000
          Medium consis. Pump      100T/D 22KW            1set           120,000
          Medium consis. Mixer     100T/D 22KW SUS        1set           120,000
          Auxiliaries/Chemicals                           1set           250,000
          Stock Tank               120m3 SUS304           1set           350,000
          Total                                         小 計            3,310,000
7-2-3-6  Dry Pulp
       Double Wire Machine         2,300W*55KW                    1set      900,000
       Squeezing Press             High Nip Press                 1set      900,000
       Flakt Dryer                                                1set    3,500,000
       Hood                                                       1set      250,000
       Air Supply Fan              500m3/min*700mmAQ*90KW         1set       20,000
       Exhaust Fan                 800m3/min*85mmAQ*37KW          1set       10,000
       Cutter                      130T/D                         1set      450,000
       Press & Wrapping           130T/D                          1set      450,000
       Chest Agitators            900φ*22KW                       4sets      61,000
       Pumps                                                     20sets     125,000
       Broke Extractor           11KW                             1set      100,000
       Over Head Crane           5.0TON*5.5KW                     1set      100,000
       Folk Lift                 1.5TON                           2sets      50,000
       Steel fabricating         SS 10Ton, SUS 5Ton               1set       60,000
       Piping                    SUS 4,000BM, SS 2,000BM          1set      142,000
       Installation             300Ton                            1set      180,000
       Electricity              810KW (Low Voltage)               1set      567,000
       Instrumentation          15 Loops                          1set      180,000
       Total                                                              8,045,000
7-2-3-7 Gas Boiler, Electricity Receiving & Transformer Facility
       Natural Gas Boiler              50Kg/Cm2 450℃              1set    3,000,000
                                        Steam 30T/Hr
       Auxiliaries / Condenser                                    1set      500,000
       Duct work                                                  1set      200,000
       Steel fabricating               SS15Ton, SUS 3Ton          1set       45,000
       Piping                          SS 7,000BM, SUS 2,000BM    1set      150,000
       Steam Piping                    SS 10,000BM                1set      130,000
       Installation                   30Ton                       1set      100,000
       Electricity without Boiler     300kw                       1set      300,000
       Instrumentation without Boiler 25 Loops                    1set      420,000
       Sub-Total                                                          4,845,000

          Electricity Generator
          Extracted Condensing Turbine for Recovery Boiler
                                 AC Generator 6,000KWX4000V。              3,500,000
          Electricity                                                       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  1set            200,000
          Water Intake Pump               6m3/minX10mX30KW       1set             14,000
          Water Pit                      Concrete 100m3          1set             35,000
          Water Pump                      6m3/minX10mX30KW       2sets            14,000
          Flocculant Sedimentation Pit   Concrete 100m3          1set             35,000
          Water Pump                      3.0m3/min*30m*30KW     3sets             8,000
          Steel fabricating               SS 2Ton                1set              8,000
          Piping                         SS 4,000BM              1set             48,000
          Installation                   5 Ton                   1set              4,000
          Electricity                    100KW                   1set            100,000
          Total                                                小 計               466,000

          Effluent Treatment Facility (6,000m3/D)
          Effluent Pit                         15m3                    1set       25,000
          Conical Filter                       3.7KW                   1set       25,000
          Neutralized Pit                     20m3                     1set       35,000
          Primary Clarifier                   25mDia.      11KW        2sets     100,000
          Aeration Pit                        1,800m3     80KW         1set      200,000
          Secondary clarifier                 25mDia.      11KW        2sets     100,000
          Chemical Supply Unit               10KW                      1set       10,000
          Pumps                                                        6sets      60,000
          Belt Filter                        30KW                      1set      100,000
          Steel fabricating                  SS 2Ton                   1set       10,000
          Piping                             SS 10,000BM               1set      100,000
          Installation                      8 Ton                      1set        5,000
          Electricity                       200KW (Low Voltage)        1set      200,000
          Instrumentation                   5 Loops                    1set       60,000
          Total                                                                1,030,000




          Others
          Compressor 20 Nm3/min                                        3set      240,000
          Receiver Tank, Air Dryer                                     1set       50,000
          Spare parts, Tools, etc                                      1set      31,800
          Total                                                                  321,800
7-2-3-9    Civil Engineering & Architect Work
                                           Overall Area     Unit Cost   No.     Cost
          Raw Material Preparation Room        400m2       @250$/m2      1        100,000
          Chipping Room                        300m2       @250$/m2      1         75,000
          Chip Screening Room                  600m2       @250$/m2      1        150,000
          Refining Room                        800m2       @250$/m2      1        200,000
          Screening & Bleaching Room         1,000m2       @250$/m2      1        250,000
          Pulp Drying Room                   4,800m2       @250$/m2      1       1,200,000
          Pulp Warehouse                     3,000m2       @250$/m2      1        750,000
          Boiler Room                        1,000m2       @250$/m2      1        250,000
          Office                              400m2        @250$/m2      1        140,000
          Social & Welfare facility           600m2        @350$/m2      1        210,000
          Maintenance Room                    400m2        @350$/m2      1        100,000
          Material Warehouse                  200m2        @250$/m2      1         50,000
          Chemical Warehouse                 400m2         @250$/m2      1        100,000
          Total                                                                 3,575,000

          Foundation for Machineries                                    1set      800,000
          Civil works around the site/Sewer, Fence, etc                 1set      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                 2,695,000
          6.5% of Direct Construction Cost
       Construction Managing Cost                           1set                2,488,000
         6.0% of Direct Construction Cost
       (Supervising Fees, Site Management, Consulting Fees, Insurance
           Project Implementation Cost, Temporary Facility)
          Transportation & etc                                1set                829,000
            2.0% of Direct Construction Cost

           Total                                                                6,012,000


           Grand Total                                                         47,477,800



          Social and Welfare facility                         1set                150,000
          Contingency (Preparation for Machineries Variable)   1set              1,424,000
            3.0% of Total Construction Cost
          Additional Works                                  1set                   950,000
            2.0% of Total Construction Cost
Pre-Operation Expenses (Investigating Fees, F/S Fees)1set         250,000
Legal Expenses                                     1set           200,000
(Registration, Establishment, Contracting Arrangement, Lawyer)
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             Annual
                                          Rate          Depreciation
                                                             Costs
      Machinery         $42,802,800       4.5%            $1,926,126
     Building
                         $ 4,675,000       3.17%              $148,042
     Facilities
   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 APMP
               Chemical Price in Bangladesh                  Whole Jute
Dry Bleached pulp production            100 ADt/D               34,300 ADt/Year
Bleached pulp production                101 ADt/D               34,643 ADt/Year
                                          Unit Price      Unit Consumption               Cost %/Total Cost
Variable 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$/Km3             624.40    m3/T           42.74
               Electric power     Self generating                  0.00    KWH/ADT          -
               Sub-total                                                                  42.74    12.9%
     Chemical Enzyme
               NaOH゙  (100%)         414.00                       60.00    kg/ADT         25.09
               H2O2                  920.00 US$/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%
Total Variable Cost                                                                      212.21    63.9%
Fixed 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    138               165,600
              Field worker            745     20                14,900
              Sub-total                      181               294,900                     8.60      2.6%
  Maintenance Maintenance material                                                        10.00
              Maintenance cost                                                            10.00
              Sub-total                                                                   20.00      6.0%
                                                             Investment Depreciation
  Depreciation Machinery                   20 years    4.50% 42,802,800   1,926,126       56.16
               Building facilities         30 years    3.17% 4,675,000      148,042        4.32
               Sub-total                                      47,477,800  2,074,168       60.47    18.2%
Administration                                                                             5.00
Total Fixed Cost                                                                          94.07    28.3%
Total Mill Cost                                                                          306.28    92.2%
Head office cost Interest                 $49,604,800*0.9/100/34300                       13.02
                 Sales cost               2% on sales                                      8.00
                 Inland freight                                                            5.00
Total Head Office Cost                                                                    26.02      7.8%
Total Manufacturing Cost                                                                 332.29   100.0%
Sales Unit Price (Domestic)                                                             425.00
Business Profit                                                                          92.71
Profit Tax                        37.5%                                                  34.77
Profit after Tax                                                                         57.94
Cash Flow                                                                               118.41
        Case 2 APMP
               Chemical Price in Indea                   Whole jute
Dry Bleached pulp production           100 ADt/D              34,300 ADt/Year
Bleached pulp production               101 ADt/D              34,643 ADt/Year
                                      Unit Price      Unit Consumption                Cost %/Total Cos
Variable Cost                                                                       US$/ADT
 Raw Material Jute(100%)                 62.07 US$/ADT          1.25      ADT/ADT     77.30   24.2%
                                                                0.803      el
                                                                          Yi d
       Energy Steam/Natural Gas       67.76 US$/Km3           624.40      m3/T         42.74
               Electric power     Self generating                0.00     KWH/ADT        -
               Sub-total                                                               42.74    13.4%
      Chemical Enzyme
               NaOH゙  (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$/kg                0.10   kg/ADT       0.88
               Antiseptic agent                                                        5.05
               Sub-total                                                              65.30     20.5%
        Others Water supply           0.010 US$/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      4.3%
Total Variable Cost                                                                  199.14     62.4%
Fixed 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    138             165,600
              Field worker            745     20              14,900
              Sub-total                      181             294,900                    8.60     2.7%
  Maintenance Maintenance material                                                     10.00
              Maintenance cost                                                         10.00
              Sub-total                                                                20.00     6.3%
                                                         Investment Depreciation
  Depreciation Machinery               20 years    4.50% 42,802,800   1,926,126        56.16
               Building facilities     30 years    3.17%   4,675,000    148,042         4.32
               Sub-total                                  47,477,800  2,074,168        60.47    18.9%
Administration                                                                          5.00
Total Fixed Cost                                                                       94.07    29.5%
Total Mill Cost                                                                       293.20    91.9%
Head office cost Interest             $49,604,800*0.9/100/34300                        13.02
                 Sales cost           2% on sales                                       8.00
                 Inland freight                                                         5.00
Total Head Office Cost                                                                 26.02     8.1%
Total Manufacturing Cost                                                              319.22   100.0%
Sales Unit Price (Domestic)                                                          425.00
Business Profit                                                                      105.78
Profit Tax                    37.5%                                                   39.67
Profit after Tax                                                                      66.11
Cash Flow                                                                            126.58
         Case 3 APMP
                Chemical Price in Bangladesh                 Whole Kenaf
Dry Bleached pulp production            100 ADt/D               34,300 ADt/Year
Bleached pulp production                101 ADt/D               34,643 ADt/Year
                                          Unit Price      Unit Consumption               Cost %/Total Cos
Variable Cost                                                                          US$/ADT
  Raw Material Kenaf(100%)                   49.66 US$/ADT         1.25    ADT/ADT       61.84   19.5%
                                                                   0.803    el
                                                                           Yi d
        Energy Steam/Natural Gas       67.76 US$/Km3             624.40    m3/T           42.74
                Electric power     Self generating                  0.00   KWH/ADT          -
                Sub-total                                                                 42.74    13.5%
       Chemical Enzyme
                NaOH゙  (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%
         Others Water supply           0.010 US$/m3               60.00 m3/ADT            0.60
                Effluent               0.020                      60.00                   1.20
                operating supplies                                                        6.00
                packaging                                                                 6.00
                Sub-total                                                                13.80      4.4%
Total Variable Cost                                                                     196.75     62.1%
Fixed Cost                        US$/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    138              165,600
               Field worker            745     20               14,900
               Sub-total                      181              294,900                     8.60     2.7%
   Maintenance Maintenance material                                                       10.00
               Maintenance cost                                                           10.00
               Sub-total                                                                  20.00     6.3%
                                                             Investment Depreciation
   Depreciation Machinery                 20 years     4.50% 42,802,800   1,926,126       56.16
                 Building facilities      30 years     3.17% 4,675,000      148,042        4.32
                 Sub-total                                    47,477,800  2,074,168       60.47    19.1%
 Administration                                                                            5.00
Total Fixed Cost                                                                          94.07    29.7%
Total Mill Cost                                                                          290.82    91.8%
Head office cost Interest                 $49,604,800*0.9/100/34300                       13.02
                 Sales cost               2% on sales                                      8.00
                 Inland freight                                                            5.00
Total Head Office Cost                                                                    26.02     8.2%
Total Manufacturing Cost                                                                316.83    100.0%
Sales Unit Price (Domestic)                                                             425.00
Business Profit                                                                         108.17
Profit Tax                        37.5%                                                  40.56
Profit after Tax                                                                         67.61
Cash Flow                                                                               128.08
       Case 4 APMP
               Chemical Price in Indea                   Whole Kenaf
Dry Bleached pulp production           100 ADt/D              34,300 ADt/Year
Bleached pulp production               101 ADt/D              34,643 ADt/Year
                                      Unit Price       Unit Consumption                 Cost %/Total Cos
Variable Cost                                                                         US$/ADT
 Raw Material Kenaf(100%)                49.66 US$/ADT              1.25    ADT/ADT     61.84   20.4%
                                                                    0.803    el
                                                                            Yi d
       Energy Steam/Natural Gas       67.76 US$/Km3               624.40    m3/T         42.74
               Electric power     Self generating                    0.00   KWH/ADT
               Sub-total                                                                 42.74   14.1%
     Chemical Enzyme
               NaOH゙  (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$/kg                 0.10    kg/ADT        0.88
               Antiseptic agent                                                           5.05
               Sub-total                                                                 65.30   21.5%
       Others Water supply             0.010 US$/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    4.5%
Total Variable Cost                                                                     183.68   60.5%
Fixed 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    138              165,600
             Field worker            745     20               14,900
             Sub-total                      181              294,900                      8.60     2.8%
 Maintenance Maintenance material                                                        10.00
             Maintenance cost                                                            10.00
             Sub-total                                                                   20.00     6.6%
                                                         Investment Depreciation
  Depreciation Machinery               20 years    4.50%   42,802,800 1,926,126          56.16
               Building facilities     30 years    3.17%    4,675,000   148,042           4.32
               Sub-total                                   47,477,800 2,074,168          60.47   19.9%
Administration                                                                            5.00
Total Fixed Cost                                                                         94.07   31.0%
Total Mill Cost                                                                        277.75    91.4%
Head office costInterest              $49,604,800*0.9/100/34300                          13.02
                Sales cost            2% on sales                                         8.00
                Inland freight                                                            5.00
Total Head Office Cost                                                                   26.02     8.6%
Total Manufacturing Cost                                                               303.76    100.0%
Sales Unit Price (Domestic)                                                            425.00
Business Profit                                                                        121.24
Profit Tax                    37.5%                                                     45.46
Profit after Tax                                                                        75.77
Cash Flow                                                                              136.25
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
        B. Return on Equity ( Profit after Tax / Paid Capital + Cash Surplus )
                               In 10th Year
        C. IRR : Internal Rate of Return
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.