NINE Dragons Paper (Holdings) Ltd, owned by the richest woman in the Chinese mainland, will add four new packaging paper machines as part of its plan to double production capacity in the next two years.
The company, which uses waste paper as its materials to make card- board for boxes and other packing products, signed a contract on Wednesday in Vienna with Germany-based Voith Paper, a leading supplier of packaging paper machines, for delivery of the new machines.
No financial terms were disclosed. But industry insiders estimated that the four top-class machines should cost as much as 200 million euros (US$271 million).
"Our goal is to raise the production capacity to more than 10 million tons (a year) by the middle of 2009," said Liu Ming Chung, chief executive officer of Nine Dragons, after the contract signing ceremony.
Liu's wife, Zhang Yin, the company's chairwoman who was ranked the richest woman and the second-richest tycoon in the Chinese mainland last year by Forbes magazine with net assets of US$2.4 billion, didn't show up.
The paper industry is booming in the mainland as the world's fastest-growing major economy consumes more paper in food and industrial packaging and daily use like tissues.
Last year, the mainland's consumption of paper and boards grew 16 percent to nearly 70 million tons as the economy expanded 10.7 percent, according to industry data. The booming consumption, together with accelerated exports, resulted in a 21 percent jump in production over 2005.
Liu Mingming, president of Voith Paper China, said sales in China mainland are expected to maintain an 18 percent growth annually till 2012.
Nine Dragons, founded by Zhang in 1997, is mainland's largest card- board maker, operating 13 packaging machines with a combined capacity of 4.5 million tons a year.
The four new machines, which are scheduled to be operational within the next 24 months, have a combined capacity of more than 3,000 tons a day.
Nine Dragons aims to capture 35 percent of the domestic packaging paper market in three years and plans to spend US$260 million on a plant to ramp up capacity in the country's north.