Stora Enso Withdraws From Board Mill Project in China
Jan. 5, 2006 - Stora Enso said that after detailed due diligence process, it has decided to withdraw from the previously announced project in consumer board production in China.
A letter of intent to start a joint venture with Chinese Foshan Huaxin Packaging Co., Ltd. was signed in August 2005.
The joint venture involved a 250,000 tpy white lined chipboard (WLC) machine that was under construction at Foshan Huaxin's board mill in Zhuhai in southeast China. Through a proposed joint venture company, Stora Enso planned to change the scope of the project by modifying the machine to manufacture primary-fibre-based products such as liquid packaging boards, cupstock, cigarette boards and other cartonboards.
The decision to withdraw was taken after the due diligence process revealed that the project would not meet the profitability expectations set by Stora Enso because technical modification of the machine would be more challenging than initially estimated, the company explained.
Stora Enso said it will now focus in China on developing the previously announced plantation project in Guangxi and publication paper feasibility study in Shandong. The company is exploring other possibilities of liquid packaging board production for the Chinese market.
SOURCE: Stora Enso
See related story:
· Stora Enso Enters Liquid Packaging Joint Venture in China (08/11)