A new paper mill under construction in China’s Hebei province will allow PanAsia Paper Company, which is owned 50 per cent by Norske Skog, to more than triple its annual newsprint output in China.
From the autumn of 2005, this new facility 280 kilometres south of Beijing and the company’s existing Shanghai mill will be producing 475 000 tonnes per year for China’s fast-growing newsprint market.
“The new paper machine at the Hebei mill will be the biggest and most efficient newsprint machine in Asia,” explains chief executive Jan Oksum at Norske Skog.
“The Chinese market for newsprint is expanding sharply, and we expect further growth towards the Beijing Olympics in 2008.”
No less than 70 per cent of output from the new facility will be delivered to customers within a 500-kilometre radius.
The total Chinese newsprint market is expected to reach 2.65 million tonnes in 2005, and market forecasts predict an annual growth of about eight per cent until 2010.
Production at the new Hebei facility will be based wholly on recovered paper, with half of this material due to be collected in China.
Construction of the mill is on schedule, and contracts covering almost 90 per cent of the required deliveries have already been awarded.
Total investment in the Hebei project comes to USD 300 million, corresponding to less than USD 1 000 per tonne of production capacity.
The new mill is owned 80 per cent by PanAsia Paper Company and 20 per cent by the local Long-Teng Paper Company.
PanAsia currently holds 24 per cent of the Asian newsprint market, and the Hebei involvement will further strengthen its position as the biggest paper supplier in Asia outside Japan.