Securing stateside supply

Features - Paper Recycling Supplement

ND Paper LLC began expanding its U.S. presence three years ago to secure North American fiber.

November 30, 2020

© Vitalii Vodolazskyi /

For roughly three years, Hong Kong-based Nine Dragons Paper (Holdings) Co. Ltd. has been expanding its footprint in the United States through its Oakbrook Terrace, Illinois-based ND Paper LLC subsidiary. The company first announced plans to invest in paper and pulp capacity in the U.S. in 2018.

“The U.S. has traditionally been one of the major sources of Nine Dragons’ supply of high-quality recycled paper,” says Ken Liu, CEO of ND Paper. “In late 2017, the Chinese government refined the quota policy for importing recycled paper. We believe that the expansion to the U.S. in 2018 could provide a more stable source of supply for the group in the long run.”

ND Paper purchased mills in Rumford, Maine, and Biron, Wisconsin, from Canada-based Catalyst Paper in June 2018. Later that same year, the company purchased a mill from Canada-based Resolute Forest Products Inc. in Fairmont, West Virginia. Then in October 2018, ND Paper acquired a kraft pulp mill in Old Town, Maine.

Before ND Paper purchased these mills, with the exception of the Old Town site, Liu says each was established and had been operating for decades. “With that, they were staffed with an experienced, skilled workforce,” he says. “This is clearly a priority, as we would have no production without capable people.”

Liu continues, “In addition, each mill is geographically located in close proximity to plentiful fiber sources, whether it be virgin wood for our kraft pulp mills or recovered paper for our recycled operations.”

Looking ahead, he says the North American market is “large and growing, presenting an opportunity for further global business expansion.”

In the Q&A that follows, Liu tells Recycling Today how ND Paper’s operations have grown.

Recycling Today (RT): Nine Dragons is ND Paper’s parent company. What are the similarities and differences between ND Paper and Nine Dragons?

Ken Liu (KL): Under the same umbrella, both companies share the same core principles, i.e., safety, environmental protection and production efficiency. In addition, regard for our employees is a key to the success of both companies.

Product offering [differs]. While Nine Dragons mainly offers linerboard, corrugating medium and coated duplex board, ND Paper sells a broad array of printing and writing and specialty papers, as well as recycled containerboard and kraft papers. Targeted end market [differs]—Nine Dragons maintains its focus on Asia—China in particular—while ND Paper eyes North America.

RT: What differentiates ND Paper from other paper mills in the U.S.?

KL: We’re one of the few that are actively investing in the long-term sustainability and growth of our business. In fact, ND Paper has a significant, strategic capital investment program underway that will ensure our mills will operate safely and efficiently for the next 100 years.

We are in the process of starting our first corrugated container plant, with a targeted opening in the fourth quarter of this year.

ND Paper is also unique in North America as a full-range producer; we produce a broad range of paper and pulp products for a variety of end markets.

Finally, we believe our service platform is best in class; our customers are our priority.

RT: One of Nine Dragons’ goals is to “become the largest and best recycled-based paper manufacturer in the world,” according to a statement on your parent company’s website. How is the company working to meet that goal? What challenges are associated with meeting that goal?

KL: We expand our footprint and capacity via a systematic approach, growing from 200,000 [metric tons per year] to over 18 million [metric tons per year] as of today. In the coming years, we aspire to reach over 21 million [metric tons per year]. We are enhancing our vertical integration ability. We are ramping up our recycled pulp and virgin pulp production capacity to supply our paper manufacturing. We are also expanding downstream with our corrugated business in China.

Like all the other industries, the ever-changing macro environment always brings challenges to the paper industry, especially ours, as it is a heavy capex industry. In addition, raw material supply and prices are volatile from time to time. We have to be very cautious and balance all the risks and return when making every decision.

RT: What are ways ND Paper is changing the game for recycling?

KL: ND Paper is committed to enhancing the circular economy in the U.S. With the upcoming start of our corrugated packaging facility, we are functioning essentially a closed-loop system. We are operating in every part of the supply chain: recovered paper collections, pulping, papermaking and converting. Our industrial scrap in our converting operations will be directed back to our mill for reprocessing into new paper. Our manufacturing process is centered around the conversation of vital resources and the long-term sustainability of our operations.

RT: How will the bans on recovered paper imports affect ND Paper and Nine Dragons heading into 2021?

KL: Three initiatives have been initiated by Nine Dragons Group.

[First], to expand our domestic procurement network [in China] and procure more domestic recycled paper in [the] Chinese market.

[Second], to maintain the competitiveness of our high-quality paper product, we have been building our own recycled pulp and wood pulp production capacity. Currently, Nine Dragons has two recycled pulp facilities, one in Malaysia and one in the U.S. Down the road, we will be building wood pulp production lines in Hubei and Shenyang in China.

[Third], to expand our product offering with the new lower grade River- Dragon brand paper product so as to broaden our market coverage to mid-to-low-tier segment.

RT: How has the pandemic affected operations this year, and how has the business had to adapt as a result?

Ken Liu
Photo courtesy of ND Paper

KL: [At Nine Dragons], we had to suspend operations for a short period of time when the pandemic just started in China (in January), mainly driven by the following reasons: Government required [the] majority of Chinese factories [to suspend] operation for weeks in order to minimize the risk of spreading of coronavirus [and] temporary tightening of recycled paper supply in China as daily activities of the society significantly decreased.

Our team has swiftly responded to the pandemic safety issue by implementing precautionary measures so that none of our staff was confirmed positive. Plus, our production utilization rate had recovered to normal levels within two months after our factories reopened in late February. Sales volume was heavily impacted in [Q1 2020] but picked up quickly again in Q2 thanks to the precautionary measures led by the Chinese government.

“We believe that the expansion to the U.S. in 2018 could provide a more stable source of supply for the group in the long run.” – Ken Liu, CEO, ND Paper

We just announced our [fiscal] 2020 full-year results in late September. Thanks to customers’ trust in us and our good cost control, our sales volume in the first half of the year actually increased [by] 0.2 million metric tons compared to that in 2019, while all of our profit parameters grew.

[At ND Paper], our operations and employees were deemed “essential,” and operations continued uninterrupted. Full-scale development and mobilization of COVID-19 precautions were set in place and continue to this day.

Key actions taken include visitors barred from mill premises, [a] travel ban, off-site quarantine requirements for employees who travel [or] come into contact with a person who has tested positive for COVID-19, temperature screenings upon mill arrival, mandated mask use, frequent cleaning [and] disinfecting of shared spaces [and] social distancing.

RT: What are some trends you are noticing for recovered paper that will affect the future of the recycling industry?

KL: Increasing demand in domestic recycled paper in [the] Chinese market due to the banning of imported recycled paper starting from 2021. Increasing demand for recycled pulp in the Chinese market.

More sizable paper manufacturing companies will build their own recycled pulp production capacity. Currently, Nine Dragons has two recycled pulp facilities, with one in Malaysia and another in the U.S.

Market consolidation will intensify as larger players usually have advantages over sourcing, production scales, etc.

RT: What are ND Paper’s plans for its U.S. operations looking ahead to 2021?

KL: We have enacted a full-scale strategic capital investment program to solidify the foundation of our U.S. company. Investments and upgrades are underway at each of our facilities. This capital program focuses on our equipment specifically to increase our capacity, improve operational efficiencies and diversify our product portfolio. Also, 2021 will see ND Paper open its first corrugated container plant in the U.S. under the ND Packaging banner.

Ken Liu is chief executive officer at ND Paper LLC. More information on the company is at