Nine Dragons starts up 300,000 tonne/yr recycled fluting PM in China, advances plan for 350,000 tonne/yr unit in Vietnam

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Nine Dragons starts up 300,000 tonne/yr recycled fluting PM in China, advances plan for 350,000 tonne/yr unit in Vietnam

February 25, 2014 - 13:30

SHANGHAI, Feb. 25, 2014 (RISI) -Nine Dragons Paper (Holdings) has started up a new 300,000 tonne/yr recycled fluting PM at a mill in Leshan city, Sichuan province.

The unit, dubbed PM 38, was scheduled to come online by December 2013. Ultimately, it was fired up in January. The firm did not explain the delay.

Meanwhile, Nine Dragons is once more advancing the schedule for a new 350,000 tonne/yr recycled containerboard PM in Vietnam.

The machine, which will mainly produce kraft-top linerboard, is now planned to start up by the end of June 2015, instead of the end of December 2015 as previously scheduled.

The firm initially planned to bring the unit online by the end of 2016 when it announced the project in early 2013.

It is aimed at developing the firm's presence in the Vietnamese and other southeastern Asian markets.

The unit will be installed at the firm's site in Binh Duong province, Vietnam. The mill currently runs a 100,000 tonne/yr recycled containerboard PM.

China pressures:The overseas production move comes as an economic slowdown in China affects demand growth for packaging materials in the country.

Recycled containerboard producers there have increased their shipments of board products to overseas markets to ease supply pressures within the country.

Official statistics showed that exports of recycled containerboard soared in 2013. Export shipments of recycled linerboard, for example, totaled more than 44,000 tonnes, compared with only 6,398 tonnes in 2012.

However, Nine Dragons is optimistic about the Chinese market in the long run.

Not only has the country has been making efforts to eliminate old machines, but the quick rise of online shopping has greatly boosted the consumption of board materials.

Two more PMs:Nine Dragons is pressing ahead with the construction of a greenfield mill in Shenyang city, in China's northern province of Liaoning.

Two recycled containerboard PMs with a combined capacity of 700,000 tonnes/yr are planned there.

The first one, which will make kraft-top linerboard at a rate of 350,000 tonnes/yr, will kick off production by the end of June this year.

The second, also with a capacity of 350,000 tonnes/yr, will make testliner and is planned to start up by the end of 2016.

Results positive:The firm released its half-year financial results ending December 31, 2013 earlier this week.

The firm achieved a sales volume of RMB 14.7 billion ($2.2 billion) in the half year ending December 2013; almost unchanged over the same period in the previous year.

Its net profit jumped by 47.7% year-on-year to RMB 972.6 million.