Chinese mill groups Nine Dragons and Lee & Man have separately revealed plans to build huge mills on the border of China and Vietnam.
Nine Dragons is intending to construct a facility with the capacity of 7.95 million tonnes per year in the Guangxi Zhuang Autonomous Region along China’s border with Vietnam.
It is expected to require $4.6 billion (£3.3 billion) investment by the company.
Anticipated to be completed in 2025, the mill is still at the early stages of development, but is expected to produce base paper.
The location has been chosen because of its strategic links with South East Asia with a port nearby able to bring in and export material.
Nine Dragons chairwoman Cheung Yan said: “This is China’s front line facing South East Asia.”
The strategy for this new facility will be to import recovered fibre from its current suppliers in US, UK, Europe and elsewhere into Malaysia. Here the post-consumer cardboard and paper will be turned into pulp before being shipped to its Guangxi facility.
However, Nine Dragons will also use it as a base for supplying finished product back into South East Asia which has seen the digital economy grow as a result of the pandemic. It is predicted that cardboard used in South East Asia is expected to grow by 5% per year over the coming years.
Meanwhile, Lee & Man Paper is also in the process of building a 6.2 million per year facility in the city of Fangchenggang, which is also in the Guangxi Zhuang Autonomous Region.
Costing $5 billion (£3.67), this mill each year will produce 1.2 million tonnes of chemical pulp, 1 million tonnes of chemi-mechanical pulp, 400,000 tonnes of semi-mechanical pulp, 600,000 tonnes of tissue, 1.6 million tonnes of ivory board and 300,000 tonnes of kraftliner.
A second phase will see an additional 550,000 tonnes of tissue paper, and 600,000 tonnes of kraftliner be produced at the mill.
Nine Dragons and Lee & Man have both expanded capacity across South East Asia in recent years following the Chinese import ban that came into effect at the beginning of this year.