Shandong Firm to Invest $1.5 Billion in Paper Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--A Shandong paper company is building a 1 million-ton-per-annum sulfite pulp project in which the company will invest $1.5 billion, as well as $400 million for environmental protection to comply with China's tightening rules on the paper industry. Construction of the project began on October 29, 2007, in Rizhao City of Shandong Province. A completion date has not been reported.

Shandong Asia Pacific Senbo Paper Company Limited (Rizhao City, Shandong Province) will be able to produce 1.3 million tons of pulp every year, based on its current annual capacity of 315,000 tons. Senbo will be China's largest pulp-making enterprise, owning the world's largest single pulp-making product line, according to China Business Weekly.

In terms of the environmental investment, Senbo will use it to buy equipment for alkali recovery, sewage treatment, emissions reduction and electricity. The electricity devices will enable Senbo to be self-sufficient while other equipment will make the company one of the world's most environment-friendly pulp-making factories.

Asia Pacific Resources International Holdings Limited (APRIL) (Singapore) holds 90% of Senbo's shares. The Singaporean company has 400 million square meters of plantation in Indonesia, providing sufficient high-quality raw material for Senbo, whose smaller competitors are striving to get straw into paper.

As a country with low per capita forest resources and facing growing need for high-quality paper for offices, China has imported 7.6 million tons of wood pulp in 2005, from 3.35 million tons in 2000. The 2005 figure accounted for 70% of China's total wood pulp consumption that year.

Wood pulp accounts for less than 20% of China's paper-making material, leaving straw and used paper to take the larger share. China's central government has issued several regulations to curb the development of high-polluting enterprises and welcome environment-friendly ones.

China's State Development and Reform Commission issued the "Paper Making Industry Development Policy" in October, saying China will develop 265 million tons of paper- and paperboard-making capacity and close 6.5 million tons of inefficient capacity before 2010.

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