Orient Paper to Install New Corrugating Medium Machine
April 12, 2010 - Orient Paper today announced that on April 9 it entered into a definitive equipment purchase agreement with Henan Qinyang First Paper Machine Limited to purchase a corrugating medium paper production line with an annual production capacity of 360,000 tons for RMB 190.0 million (approximately $27.8 million).
According to the Agreement, Qinyang Paper Machine will be responsible for complete installation of the new production line within the next six months.
Orient Paper expects to begin trial production in the beginning of the fourth quarter of 2010.
Upon successful completion of the trial production at the end of 2010, the company plans to begin large scale production of corrugating medium paper on its newly added production line and achieve a utilization rate of approximately 70% in fiscal year 2011.
"With the additional 360,000 tons of corrugating medium paper production capacity, we are set to expand our market share in northern China's rapidly growing paper industry," said Mr. Zhenyong Liu, Chairman and Chief Executive Officer.
"The newly acquired production line will increase our total production capacity from the existing 280,000 tons to reach 640,000 tons by 2011. Corrugating medium paper production capacity is expected to increase over 200%. The continued progress and development of our regional economy and the domestic consumer and packaging industries have resulted in robust demand for corrugating medium paper products. We believe the additional capacity will enable us to better serve the growing demand for corrugating medium paper contributing to our future revenue growth and profitability," Liu said.
SOURCE: Orient Paper, Inc.