Nine Dragons highlights expansion plans in FY2019 interim results

During the period, ND Paper, a wholly owned subsidiary of the group, completed the acquisition of two pulp mills—the Fairmont Mill in West Virginia and the Old Town Mill in Maine. The Fairmont Mill manufactures and distributes recycled pulp with a production capacity of 0.22 million tons per year. The Old Town Mill, which used to manufacture and distribute bleached hardwood kraft pulp with a production capacity of 0.16 million tons per year, will be converted to produce unbleached kraft pulp. Together with the Rumford Mill and the Biron Mill acquired by ND Paper LLC in fiscal year 2018, these four mills in the United States are expected to offer access to high-quality raw material for the group’s primary business, with significant synergies, including cost savings, exhibited in a vertically integrated business model.

The group is actively pursuing the goal of completing the construction of four new paper machines in China in 2019, among which a total of three new paper machines at the Shenyang base, the Hebei base and the Quanzhou base are expected to start production in the second quarter of 2019. Also, a new paper machine at the Dongguan base is expected to start production in the third quarter of 2019. Upon the start of production, these four paper machines will add 2.05 million tons per year to the group’s total design production capacity. 

Additionally, ND Paper LLC plans to implement a series of equipment upgrade and expansion projects at its four pulp and paper mills in the U.S., which may all be completed and begin production before the end of 2021. By then, the group’s production capacity in the U.S. will increase by 1.4 million tons per year, bringing its global total production capacity to more than 19 million tons per year. 

“For future market outlook, it is expected that China will continue to implement stringent environmental policies, making the advantages of large enterprises becoming more prominent,” says Cheung Yan, chairlady at Nine Dragons. “Yet, the group is confident about the fundamental of domestic consumption and industry demand in China and believes that there is some growth potential in market demand. Meanwhile, the group remains cautiously optimistic and positive about the [China-U.S.] trade war."