Jingxing Paper's Malaysia Project to Commence Next Spring

SCI99

2019-12-20

Jingxing Paper's Malaysia Project to Commence Next Spring

Recently, Zhejiang Jingxing Paper announced that its Malaysia project was to be commenced in Q1 2020.

The 800kt/a recycled pulp unit is the phase I project at its pulp and paper industrial base in Malaysia, and the project has passed the environmental assessment. The project may start next spring if the procedures go on smoothly, and the project completion is expected at early 2021.

In January 2019, Zhejiang Jingxing Paper announced its plan for investing a new pulp and paper project in Selangor state of Malaysia to produce recycled pulp board and raw packaging paper from imported U.S. RCP. The designed recycled pulp capacity was 800kt/a in addition to a 600kt/a packaging paper unit. The target of the phase I project is to build the 800kt/a recycled pulp unit, and the construction will be completed in 2 years. The phase II 60kt/a packaging paper unit will start one year after the phase I unit becomes o, and the construction of the phase II project will also last for 2 years. Therefore, the total construction period will be 5 years.

On October 12, Jingxing Holdings (Malaysia), a full subsidiary of Zhejiang Jingxing Paper, signed contracts with Weifang Xinkai Machinery and Changsha Changtai Intelligent Equipment for two 400kt/a 4,800mm pulp board units, paper board cutting and sorting machine as well as an automated pulp board packaging and conveying system.

On December 2, Jingxing Paper revealed that the company prepared to launch no more than 1.28 billion RMB worth of convertible bonds in the A-shares market to finance the 800kt/a recycled pulp project, and the valid duration of those bonds would be 6 years after the initial release.

On December 16 and 17, Jingxing Paper indicated that the 800kt of recycled pulp output will be consumed within the company to sustain its growing high-end production. The company holds a bullish anticipation towards the high-end packaging paper market in China, and this unit will bring a ‘structural advantage’ to the company.

In order to cope with the sharp reduction of imported RCP, many of the market leaders are renting idle units to produce pulp overseas or commissioning production from overseas recycled pulp producers to gain access to stable recycled pulp supply. Jingxing Paper has commissioned part of its production on several pulp mills in Taiwan Province and Indonesia.

In regards to the industry development of next year, Jingxing Paper tells investors that some smaller companies who are unable to obtain U.S. RCP or fiber had to adjust their product lines. Some may not be able to sustain cardboard paper production and have to downgrade to corrugated paper using 100% domestic RCP. Therefore, the high-end packaging paper market will be bullish, and market leaders who have access to high-quality fibers will gain more opportunities to grow.

......

Please click "Read more" for more information