07 Jun 2005

Testing starts at Hebei mill

Pan Asia Paper Company (PanAsia) has begun test operation at the new newsprint mill under construction in China's Hebei province, 280 kilometres south of Beijing.
Commercial production for the Chinese market is expected to start at the end of June, less than two years after construction of the facility began and a month earlier than planned.

PanAsia is owned 50-50 by Norske Skog and Abitibi Consolidated, and owns in turn 80 per cent of the new mill. Local Chinese interests hold the other 20 per cent. The newsprint project has a total budget of USD 300 million, and Norske Skog's share of this investment comes to about NOK 1 billion.
Chinese newsprint consumption has increased sharply over the past few years, and this trend should continue even if the rate of growth is likely to slow somewhat.
"The new mill in China is entirely consistent with our strategy of benefiting from our position in regions where markets are expanding," says Jan Oksum, chief executive of Norske Skog. "We're very pleased that the project has been implemented within budget and faster than planned. Investment costs are low, and the mill will be contributing to our profitability from as early as next year."
The newsprint machine at the Hebei mill is the largest in Asia, with a production capacity of 330 000 tonnes per year - all based entirely on recovered paper.
Plans call for roughly 70 per cent of the output to be sold in Hebei province and the nearby cities of Beijing and Tianjin, which have a combined population of roughly 100 million people.
Establishing the new mill makes PanAsia the largest newsprint manufacturer in Asia, with a total production capacity of 1.8 million tonnes per year.
PanAsia's own press release is attached.

Norske Skog
Corporate Communication

For further information:
Senior Vice President Corporate Communications
Hanne Aaberg
Phone: +47 67 59 90 29
Mob: +47 913 51 681
Communication Manager
Tom Bratlie
Phone: +47 67 59 93 34
Mob: +47 905 21 904 
Vice President Investor Relations
Jarle Langfjæran
Phone: +47 67 59 93 38
Mob: +47 901 78 434

PanAsia - Press release