SHANGHAI, Feb 12, 2015 (RISI) - China's Fujian Qingshan Paper Industry plans to add 500,000 tonnes/yr of food packaging paper and board capacity at its mill in Qingzhou city, Fujian province.
The project will include a rebuild of its idle PM 3, which used to produce 200,000 tonnes/yr of recycled fluting.
The overhaul will enable the PM to make food packaging paper and board at a rate of 202,300 tonnes/yr, making it much bigger than the previously announced 130,000 tonnes/yr.
PM 3 started up in 2007. It has a width of 5.5 m and a maximum speed of 900 m/min. It has been offline since 2012 due to sectoral oversupply.
Meanwhile, the firm will build a new 306,000 tonne/yr coated food packaging paper and board machine and a 250,000 tonne/yr pulp line at the same site.
The fiber line will use newly-acquired ultrasound pulp technology, and its output is planned to furnish the new PMs.
A timeline for the entire project is not available now, and the scheme is yet to be approved the firm's shareholders and by the local authorities.
Moreover, Fuijan Qingshan plans to raise up to RMB 3.2 billion ($ 512 million) via a private placement to fund the expansion.
According to the firm, some RMB 1.7 billion will be directly used to support the project, and the remaining RMB 1.5 billion is planned to replenish working capital.
The fundraising plan also needs the nod from shareholders and related authorities.
Fujian Qingshan currently runs two PMs with a combined capacity of around 200,000 tonnes/yr of kraft paper.
It also operates a 120,000 tonne/yr dissolving pulp line at the Qingzhou mill.
It recently decided to acquire a 100,000 tonne/yr kraft paper firm called Guangdong Zhaoqing Kelun Paper at a cost of RMB 300 million.
The acquisition is to be approved by the firm's board of directors and shareholders, and the transaction price needs to be greenlit by local authorities.
Trading in Fujian Qingshan's shares resumed on February 12 after months of suspension.