Our road to Guangxi has not been entirely smooth. It took a lot longer than expected to obtain the necessary approvals from the authorities. In July 2013, the company received the final investment approval from the central government of China for this super-complex, which will consist of a board machine with an annual capacity of 450 000 tonnes and a pulp mill producing 900 000 tonnes a year, as well as a power plant and other support functions.
Years of preparations
We do already have two paper mills, two core factories and production and distributing units in China. But this is the first time the company has started a mill project from an empty field in the land of the dragon.
We did not set out for Guangxi on a whim. The project dates back to the early 2000s, when the company first explored opportunities for setting up tree plantations in China. “At first we just went there to look and learn – on a very small scale. Only later did we realise how much potential China offered,” recalls Markus Mannström, who heads the Guangxi mill project.
In 2007, we decided that the company’s presence in Guangxi should go beyond raw material sourcing. There were two reasons behind this decision: firstly, consumerism and customer behavior had changed; and secondly, demand for board-based food packaging was increasing.
“Stora Enso today supplies a third of all the raw materials for the world’s liquid packaging board. If we want to keep our position or get even bigger, we have to hit the growth markets – and hard,” Mannström emphasises.
The plans are for the Guangxi mill to manufacture fibre-based liquid packaging board for products such as milk cartons and fast-food drink cups. Demand for these products is expected to grow at an annual rate of ten per cent in China over the next decade.
At first, we will build up a consumer board machine and after it is completed, a pulp mill. The total value of Stora Enso’s investment in Guangxi is roughly 1.6 billion euros.
The mill itself will employ some 700 people. But even more new jobs will be created in wood harvesting. The United Nations Development Programme (UNDP) estimates that our project will have a direct and indirect employment effect of some 30 000 new jobs in Guangxi Province, an area the size of France.