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Nine Dragons to reach 23.82 million tpa paper productions by the end of June 2024

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Nine Dragons Paper's future expansion plan

Nine Dragons to reach 23.82 million tpa paper productions by the end of June 2024

NDP to introduce most advanced cardboard and carton box production lines

27th September 2021 | China | The Pulp and Paper Times:

With the stringent pandemic control and the widespread mass vaccination in China, the Chinese economy has noticeably restored stability. However, given the volatile pandemic situation in various countries around the world, disrupted international shipping, increase in cost of energy and commodities, and the official launch of the “zero import quota on recovered paper” policy, the operation of the packaging paper industry in China continued to be under unabated pressure

Amidst uncertainties, Nine Dragons Paper enhanced its pandemic prevention measures, gave full play to its advantages in economies of scale and procurement of raw materials, adhered to quality products and services, actively explored quality customer base and exercised effective cost control. As such, the sales and sales volume hit a new high during the Year with a remarkable profit growth.

During the financial year ended on 30th June 21, the revenue of Nine Dragons Paper increased by 19.9% to approximately RMB 61,574.1 million. Gross profit margin increased by approximately 1.4% from 17.6% to 19.0%.

In a statement, Ms. Cheung Yan, Chairlady - Nine Dragons Paper (Holdings) Limited (NDPHL) said that during the Year, the Group’s new paper production capacity in Quanzhou, Shenyang, Dongguan and Hebei started commercial production in July, July, September and December 2020 respectively, adding a total of 2.05 million tpa. A total production capacity of 420 million sq.m. for downstream packaging in Taicang and the United States have also officially commenced production. As of 30 June 2021, the Group’s total design production capacity for pulp (recycled pulp and wood pulp) and paper amounted to 0.85 million tpa and 17.57 million tpa, respectively, while the total annual design production capacity for downstream packaging plants exceeded 1,400 million sq.m.

Expressing her view over the future outlook of paper industry, she says, “As the global pandemic continues to evolve, the external environment will be increasingly complex and challenging. Looking forward, with further penetration of mass vaccination, the global pandemic scenario is expected to be more stabilized, which would allow the global economy to get back on track. Under the national “dual circulation” new development pattern, China’s domestic demand and export industry will be boosted. In the mid-to-long term, the trend of replacing plastic with paper in packaging and consumption upgrade will drive the demand of high-end packaging paper such as white top linerboard and virgin kraftliner, while the tightened raw material supply and environmental policies will drive consolidation in our industry”

Capacity expansion plan in support of product portfolio optimization strategy 

Revealing NDP’s capacity expansion plan, Ms. Yan informed that with the full implementation of the “zero import quota on recovered paper” policy, securing source of raw material supply remained our primary concern in regard to our production capacity expansion plan. In respect of preparation of quality raw materials, we have planned ahead and implemented the fully-integrated pulp and paper projects in Jingzhou, Hubei, Shenyang, Liaoning and Beihai, Guangxi, which are expected to provide the Group with wood pulp production capacity of more than 3 million tonnes for its own use by year end of 2023. By that time, “we will be able to exercise better control over product quality and production costs. During the up cycle of wood pulp prices in the international market, the advantages of our vertical integration of the production chain will prevail in particular. Combined with the 0.6 million tonnes of recycled pulp resources to be added in Malaysia, the Group’s total design production capacity for pulp (wood pulp and recycled pulp) will reach 4.57 million tpa by year end of 2023” she said. 

Ms. Yan says, furthermore, we are in the process of adding production capacity of wood fibre as an alternative raw material, the production capacity of which will reach 1.10 million tonnes by year end of 2022. – 18 – In respect of paper production capacity expansion, our strategy is to optimize our product portfolio to give full play to our competitive edge in raw materials, in addition to increasing our structural profitability by seizing the opportunities arising from the Plastic Ban Order. As such, expanding the production capacity for white top linerboard, virgin kraftliner and bleached folding boxboard is of utmost importance. Currently, a number of our domestic and overseas paper manufacturing projects are underway, which are expected to add new production capacity of 6.25 million tonnes to the Group upon completion, bringing the total design production capacity for paper manufacturing to 23.82 million tpa by the end of June 2024.

Meanwhile, NDP is in the process of expanding the downstream packaging capacity by introducing the most advanced cardboard and carton box production lines, processing equipment and logistic systems in a bid to effectively enhance its sales of containerboard products, increase market share and realize the integration of paper and packaging products manufacturing in its operation. Upon completion of the above projects, it is estimated that the Group’s total annual design production capacity for downstream packaging plants will exceed 2,400 million sq.m.


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