Abitibi, Norske Plan on Building Chinese Newsprint Mill

Abitibi-Consolidated, one of the largest newsprint producers in the world, along with Norske Skog, along with a Chinese paper company, Hebei Paper, jointly announced plans to build a 100 percent recycled newsprint mill in China. The new mill is expected to cost around $300 million to build. The mill will be located southwest of Beijing. Abitibi is headquartered in Montreal, Canada; Norske is headquartered in Norway.

The joint venture will be known as Hebei Pan Asia Long-Teng Paper Co. It plans on having the facility operational by the third quarter of 2005. When fully operational the mill will be able to produce around 330,000 metric tons of recycled newsprint a year.

The complex will be 65 percent owned by Pan Asia Paper Co., a joint venture between Norske and Abitibi. The other partner in the project will be Heibei, an investment company.

"Abitibi-Consolidated has long viewed Pan Asia Paper as our growth vehicle in the world's most promising regions. The Hebei mill is expected to sell 70 percent of its production within a 500-kilometre radius of the mill," stated John Weaver, president and CEO of Abitibi-Consolidated.

"Pan Asia Paper is extremely well positioned to capture its share of the Chinese newsprint consumption growth from just under two million metric tons today to three million metric tons in 2008, when Beijing hosts the Summer Olympics."

Pan Asia Paper already has one mill in China, in Shanghai, as well as two in South Korea and one in Thailand, with total annual capacity of 1.3 million tonnes of newsprint and 135,000 metric tons of other publication paper.

It also markets half a million metric tons a year of paper from Abitibi-Consolidated and Norske Skog operations elsewhere.