Hong Kong-based Nine Dragons Paper Ltd. has signed a memorandum of understanding (MOU) with the Indian state of Maharashtra to invest some $630 million to establish a paper- and board-making presence in the state.
According to an online article from the Mumbai-based Economic Times, the Maharashtra Industrial Development Corporation (MIDC) made an early March announcement about the MOU. A spokesperson for Nine Dragons referred to the MOU as “first step towards a market entry,” and said little additional detail about the MOU is currently available.
“We feel very positive about building our presence in India,” says the company’s Benjamin Ng. He said the MOU “is very early stage; it only reflects the serious intention of the parties to work together to further explore feasibility and start a process of studying and pinning down more details about business targets, optimal investment scales, terms and structure, etc.”
The Economic Times reports that Nine Dragons intends to build a mill in the state, which is located in western and central India and includes Mumbai. Nine Dragons would reportedly invest up to 45 billion Indian rupees ($634 million) to build the facility.
The MIDC describes itself as the “industrial infrastructure development agency” for the state, which has some 112 million people. The agency says it manages some 289 industrial parks in Maharashtra.
Nine Dragons currently has more than 15 million metric tons of paper- and board-making capacity, with a focus on containerboard and other packaging grades.
In late February remarks accompanying its most recent financial report, Nine Dragons said it was “actively pursuing the goal of completing the construction of four new paper machines in China in 2019” and was planning “to implement a series of equipment upgrade and expansion projects at its four pulp and paper mills in the United States.” It did not at that time mention any plans for the Indian market.