Nine Dragons to start up 1.55 million tonnes per year of paper and board capacity in China
The paper packaging giant’s announcement comes amidst reports of more projects being delayed or canceled
Nine Dragons Paper (Holdings) plans to start up a total of 1.55 million tonnes per year of paper and board (P&B) capacity at a greenfield mill in Beihai city, Guangxi autonomous region, in the fourth quarter. The new production lines will include an 800,000 tpy kraftliner machine, a 550,000 tpy uncoated fine paper machine, and a 200,000 tpy mechanical pulp line.
Project delays and cancellations
At the Beihai site, the commissioning of a 1.2 million tpy coated ivory board machine and a 200,000 tpy sack kraft paper machine will be postponed to the third quarter of 2024 and the last quarter of 2025, respectively. They were previously planned to come online in the first quarter and the second quarter of 2024.
In addition, a 600,000 tpy mechanical fiber line and a 1.1 million tpy chemical pulp line at the new mill will be delayed by a half year to the second quarter of 2024, according to Nine Dragons’ latest plan.
The producer has also decided to cancel a 300,000 tpy kraftliner machine and a 450,000 tpy white-top liner machine at the Beihai plant.
Apart from the changes at the greenfield mill in Beihai, Nine Dragons has also axed a 600,000 tpy recycled pulp project at its Selangor mill in Malaysia.
The mill currently houses a 600,000 tpy recycled linerboard machine and a 300,000 tpy corrugating medium machine, which both started up earlier this year.
Two wood fiber lines planned in Southeast Asia were also hit by a delay. Startups of a 100,000 tpy line in Vietnam and a 210,000 tpy line in Malaysia have been postponed to this quarter and the first quarter of 2024, respectively.
But some 1.75 million tpy of wood fiber capacity at eight Nine Dragons mills in China have already come online as scheduled in the first half of 2023.
The company also fired up a 320,000 tpy chemical pulp line and a 650,000 tpy virgin kraftliner machine at its Shenyang mill in Liaoning province in the first half of year.
In Hubei province, the producer is building a 600,000 tpy kraftliner machine and a 600,000 corrugating medium machine at its Jingzhou mill, and they are planned to come online in the fourth quarter of 2024.
Nine Dragons posted a loss of RMB 2.38 billion ($325.5 million) for the fiscal year ending June 30, 2023.
It explained that due to a slow economic recovery in China, both demand and prices for packaging P&B have remained weak. Meanwhile, multiple factors such as global inflation, fluctuations in energy prices and US interest rate hikes all affected its performance.
This article was taken from PPI Asia, our newsletter for pulp, paper and packaging market news and prices for Asia. Speak to our team to learn more about our news and market analysis, prices, forecast and more.