Stora Enso plans to build plantation-based integrated board and pulp mills at Beihai city in Guangxi, southern China. The mill site will initially include a 450 000 tonnes per year state-of-the-art paperboard machine and pulp capacity of 900 000 tonnes per year, including necessary energy plant and auxiliary facilities. In a unique set-up, the board and pulp mills will be self-sufficiently integrated with wood supply from 120 000 hectares of self-managed eucalyptus plantations. The ultimate target is to expand the paperboard capacity to 900 000 tonnes at a later stage. The operations will be managed by an equity joint-venture company established by Stora Enso (85%) and the Guangxi Forestry Group (15%), a state-owned company under the Guangxiprovincial government. The joint venture will serve the fast-growing market forliquid packaging board and other premium consumer board grades.
The project investment will be approximately EUR 1.6 billion. Construction at the industrial site will commence when specific preconditions have been fulfilled, which is expected to be in the second half of 2012. Production is scheduled to start in the fourth quarter of 2014. The investment will significantly support Stora Enso moving towards company’s 13% ROCE target.
The project will be financed through a combination of debt and equity on anapproximately 60/40 basis. The debt financing is expected to be a mix of export credit agency, multilateral and commercial bank debt.
“Today we are taking another significant step in transforming Stora Enso into aglobal renewable materials company. We already have a globally leading position in renewable fibre-based packaging boards. We will now invest in a world-classintegrated mill based on locally grown renewable materials for the benefit of local Chinese consumers in the fastest-growing market. Everything we do will bebased on best-in-class technologies, environmental standards and sustainability
practices – together with the local partners and communities” says Stora Enso
CEO Jouko Karvinen.
“Generating sustainable returns from any business requires a unique offering to
the customers, be it product or process benefits, in a cost-efficient way – or
something that is very difficult for the competitors to copy, like integrating
the operation from the plantations to the technically advanced product. This is
exactly why we have chosen to differentiate ourselves through a range of
specialised world-class board products and end-to-end integration – with the
most cost-efficient solution for the Chinese market and at a globally
competitive total cost,” says Stora Enso EVP for Renewable Packaging Mats
Nordlander.
