Nine Dragons to start 4.77 million tonnes of new capacity by 2023, launch virgin cartonboard production

The largest recycled packaging board producer is China is planning to rapidly expand board production next year

Nine Dragons Paper (Holdings), the largest recycled packaging board producer in China, started virgin fiber-based cartonboard production at its mills in Dongguan city, Guangdong province and Chongqing municipality in October.

In early September, the company launched trial production of cupstock and coated ivory board on the sole cartonboard machine at its mill in Chongqing municipality. Dubbed PM 33, the machine had been dedicated to producing recycled fiber-based coated duplex board since its commissioning in 2012, with capacity of 550,000 tonnes/yr.

The Dongguan mill, in the southern province of Guangdong, houses three cartonboard machines with combined coated duplex board capacity of 1.5 million tonnes/yr. The largest, PM 32, which is capable of producing 550,000 tonnes/yr of coated duplex board, was switched to coated ivory board production on September 26, the company announced. Its capacity for coated ivory board is 600,000 tonnes/yr.

Nine Dragons plans to sell its coated ivory board to domestic and export customers, a company official told sister publication PPI Pulp & Paper Week on Tuesday September 27.

Duplex board challenges

With 430,000 tonnes/yr of coated duplex board capacity at its mill in Tianjin municipality and another 550,000 tonnes/yr at its Taicang mill in Jiangsu province, Nine Dragons is the largest producer of the grade in China.

Production of this recycled fiber-based grade has become challenging due to a lack of furnish after China implemented a ban on recovered paper (RCP) imports in January 2021.

One possible solution is to replace the RCP with virgin furnish, switching the machines to coated ivory board production. In 2020, the Dongguan and Chongqing mills were granted environmental permits for building chemi-mechanical pulp (CTMP) capacity, a key furnish for virgin cartonboard grades. The CTMP capacity at both sites started up along with the switch to virgin cartonboard production.

Fast expansions

The start-up of CTMP capacity at the Dongguan and Chongqing mills is part of Nine Dragons’ updated capacity expansion roadmap, which involves 11.67 million tonnes/yr of fresh pulp, board and paper capacity for China and Malaysia by the end of 2024.

Some 4.77 million tonnes/yr of it, including the 600,000 tonnes/yr of wood fiber at the Dongguan mill and 500,000 tonnes/yr at the Chongqing mill that came on stream this quarter, is set to commence production by the end of this year.

Most of the projects are on track or ahead of schedule, based on the timeline the company mapped out in February.

At its mill in Shenyang city, Liaoning province, 620,000 tonnes/yr of chemical pulp capacity and a 650,000 tonne/yr virgin kraftliner machine are set to be brought online in the fourth quarter.

The pulp capacity was previously scheduled to be fired up this quarter, while the startup of the virgin kraftliner unit is now six months ahead of the previous timeline.

Nine Dragons commenced production on a new 600,000 tonne/yr recycled containerboard unit at a greenfield mill in Jingzhou city, Hubei province, in June, three months ahead of schedule. The Jingzhou mill was supposed to bring 600,000 tonnes/yr of chemical pulp capacity and a 600,000 tonne/yr virgin kraftliner machine come online in the third quarter. Their startups have now been slightly postponed to the fourth quarter.

On top of that, the company has obtained approval to add another 600,000 tonnes/yr of virgin kraftliner and 600,000 tonnes/yr of corrugating medium capacity at the Jingzhou mill. That is expected to be active by the end of 2024.

In Malaysia, Nine Dragons is planning to fire up a 600,000 tonne/yr kraftliner machine and a 300,000 tonne/yr corrugating medium unit at a new mill in Selangor in the fourth quarter of this year and the first quarter of next year respectively. The two BMs had been scheduled for the second quarter of 2023.

The company has also brought forward the start-up of 600,000 tonnes/yr of recycled pulp in Malaysia to the fourth quarter of this year from the second quarter of next year.

The only significant delay has hit the company’s greenfield project in Beihai city, Guangxi.

While 1.4 million tonnes/yr of bleached chemi-thermomechanical pulp (BCTMP), 1.2 million tonnes/yr of ivory board and 550,000 tonnes/yr of printing and writing paper capacity are still due to kick into production in the fourth quarter of next year, other pulp, paper and board capacity planned for the site will be postponed by six to 24 months.

Some 500,000 tonnes/yr of unbleached pulp, 1.1 million tonnes/yr of kraftliner and 450,000 tonnes/yr of white-top linerboard capacity had been set to come online in this year’s fourth quarter.

Now, the unbleached pulp capacity has been postponed by 12 months.

The kraftliner capacity will come on stream in two stages – the first 800,000 tonnes/yr in the fourth quarter of 2023 and the remaining 300,000 tonnes/yr in the fourth quarter of 2024. Some 200,000 tonnes/yr of sack kraft paper will be started up at the Beihai complex in the second quarter of 2024 instead of the fourth quarter of 2023.

Ongoing downtime

While Nine Dragons is advancing its massive capacity expansions, it has continued with extensive production curbs since July at its existing recycled packaging board facilities due to weak demand.

The company informed clients that 12 BMs, with total capacity of 4.9 million tonnes/yr, would suspend production alternately for four to 16 days between September 26 and October 10. The move is expected to trim its recycled board capacity by an estimated 169,000 tonnes.

This article was taken from PPI Asia, the industry’s most trusted pulp and paper market news and prices for Asia. Join paper industry executives, buyers, industry suppliers and financial institutions around the world and keep up to date on the latest market prices and information from Asia. Speak to our team to find out more and subscribe to our newsletters.

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