Plantations, poverty and power - Critical Information Collective

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management was facing a bankruptcy suit over a debt of more than 100 million baht. Three members of
the Dumnernchanavit family (Yothin, Anurat and Siriwan) were included in the suit, which was filed by
Thai institution National Finance. 217
In November 2002, the Securities and Exchange Commission of Thailand fined Trairat Dumnernchanavit
1.2 million baht for manipulating the price of Advance Agro stock between April and August 1998.
Trairat used companies in his group to buy and sell shares in Advance Agro creating the impression that
trade volume had increased significantly. Trairat was put on the Stock Exchange Commission’s black list
and was not allowed to act as manager, director or major shareholder of any listed company “for at least
five years”. 218 Today, Trairat is once again on the board of directors of Advance Agro.
In 2006, Stora Enso sold its shares in Advance Agro to private investors based in Hong Kong for US$80
million. 219 The relationship between Advance Agro and Stora Enso had been a stormy one. Stora Enso
had first offered to sell its shares in October 2001. A Thai newspaper, The Nation, reported that Stora
Enso was “unable to work with the management of Advance Agro”. 220
In 2004, Stora Enso questioned Advance Agro’s 2003 financial results, particularly the transactions
between Advance Agro and affiliated companies. Shortly afterwards, Advance Agro dismissed one of
Stora Enso’s representatives from the company’s board. The Nation quotes sources as saying that Stora
Enso had questions about Advance Agro and its business transactions, “particularly those with entities
controlled by the Dumnernchanavit family”. Agro Lines is owned by the Dumnernchanavit family and
supplies fibre to Advance Agro. National Power Supply supplied electricity. Logistics system is
supported by Hi-Speed Trans Co Ltd – all these companies are affiliated with Advance Agro. 221
Three years earlier, the South China Morning Post reported analysts as saying that “Advance Agro was
forced to buy some of its wood and other raw materials from the Soon Hua Seng Group at a premium to
the market price of up to 15 per cent.” The South China Morning Post notes that “The company failed to
respond to questions about these claims.” 222
Stora Enso may also have had concerns about the social and environmental impacts of Advance Agro’s
plantations. In 2001, Stora Enso carried out a survey of the social and environmental impacts of all their
plantation operations in the global South, including Advance Agro. 223 But despite several requests for a
copy of the report, Stora Enso has declined to make the report public.
In April 2007, Advance Agro announced plans to build a new 420,000 tonnes a year paper mill at its
existing site in Prachinburi, at a cost of 12 billion baht. The new mill will increase Advance Agro’s
capacity to one million tonnes a year. Construction was planned to start in 2007 and the plant is planned
to start production in 2009. Half of the money is to come from capital funds and loans. The remainder
coming from the company’s working capital. Finnish consulting firm Pöyry produced a feasibility study
217 “Thai tale told by default on bond issue”, South China Morning Post (Hong Kong), 19 June 2001.
218 “SEC fines two investors and four companies for stock manipulation”, fnWEB.com, 4 November 2002.
219 “Stora Enso Interim Review January-September 2006”, Canadian Corporate Newswire, 26 October 2006.
220 Nareerat Wiriyapong (2001) “Enso offers to sell stake in pulp firm”, The Nation (Thailand), 8 October 2001.
221 “Advance Agro: Boardroom row erupts over deals”, The Nation (Thailand), 28 April 2004.
222 “Thai tale told by default on bond issue”, South China Morning Post (Hong Kong), 19 June 2001.
223 Chris Lang (2002) “The Pulp Invasion. The international pulp and paper industry in the Mekong Region”, World
Rainforest Movement, December 2002. http://chrislang.org/2002/12/01/the-pulp-invasion-thailand/#storaenso