Norske Skog will indirectly own a third of a new paper mill in China. The new factory will cost NOK 2.2 billion, and produce 330,000 tonns a year.
The production will be strictly based on recycled paper.
It was the Pan Asia Paper Co. Pte Ltd, a 50-50 per cent joint venture between Norske Skogindustrier ASA and Abitibi-Consolidated Inc., which Wednesday announced the creation of a 65-35 per cent joint venture with Hebei Longteng Paper Corporation of China to build and operate a newsprint mill in the industrially developed Hebei Province of China, 280 km southwest of Beijing.
The name of the joint venture is Hebei Pan Asia Long-Teng Paper Co., Ltd. Construction of the mill will begin during the fourth quarter of 2003 and it is expected to start production during the third quarter of 2005 with a rated capacity of 330,000 tonnes per year.
The newsprint will be produced from 100 per cent recycled fiber.
The project represents an investment of approximately US$300 million.
“PanAsia Paper has been a success from the very beginning,” says
Norske Skog’s President and CEO, Mr. Jan Reinaas.
“This new commitment in China gives us an even stronger position in the world’s most interesting growth region. The project has low investment cost, and we are convinced it will add value to our shareholders. PanAsia Paper has today a 25 per cent market share in non-Japan Asia and markets paper that was delivered from a number of different companies just a few years ago. PanAsia Paper has already a strong position in China through Shanghai PanAsia Potential Paper, and this position will be
further enhanced by the Hebei mill,” Reinaas said.