Helsinki, Finland, 26 April 2006 -- Stora Enso has signed an agreement with Shandong Huatai Paper to form a publication paper company. As announced 28 October 2004, Stora Enso and Shandong Huatai Paper have been conducting a feasibility study concerning publication paper production in China. The agreement establishing the joint venture, in which Stora Enso will hold 60% of the share capital, is subject to approval by the Chinese authorities.
The joint venture's paper machine at Dongying (between Beijing and Shanghai) in Shandong province in China is planned to have an annual production capacity up to 200,000 metric ton of super calendered (SC) magazine paper and other publication paper grades based on recovered fiber.
The total investment of the joint venture is estimated to be approximately USD 100 million (EUR 83 million) of which Stora Enso's share is 60%. Assembly of the production line will start in mid-2007, depending on the permission process. The production of the paper machine, which is expected to start up in late 2007, will be used to satisfy the growing market for offset printing papers in China. Key components of the joint-venture equipment are to be sourced from a machine formerly at Stora Enso's Maxau mill in Germany.
"The key strategic aims for Stora Enso are to strengthen our market position in the core product segment of publication paper, to grow with our key customers and to continue expanding in new growth markets such as China. Our cooperation with Huatai Paper, the leading producer of newsprint in China, will open up new business segments for Stora Enso in China," says Stora Enso's CEO Jukka Härmälä, who signed the agreement in the presence of Finland's Prime Minister Matti Vanhanen.
Shandong Huatai Paper Co. Ltd, is a company listed on the Shanghai Stock Exchange with sales of EUR 290 million in 2005. It is part of the Huatai Group, which is involved in paper manufacture, the chemicals industry, printing, energy, forestry, logistics, and trading. The Huatai Group has more than 10,000 employees, including about 4470 at Huatai Paper. All of the company's paper and board manufacturing assets are located in Shandong province. Its annual production capacity is 1.2 million metric tons of paper and board.