Orient Paper, Baoding, China, reported this week that it will purchase a new corrugating medium paper production line from Henan Qinyang First Paper Machine Ltd, of China. With a price tag of RMB 190.0 million (approximately $27.8 million), the new machine will have a production capacity of 360,000 metric tpy of corrugating medium. Qinyang Paper Machine will complete installation of the new production line at Orient's mill in Hebei, China, within the next six months. Orient Paper expects to begin trial production on the new line at the beginning of the fourth quarter.
After successfully completing the trial production, around the end of the year, the company plans to begin large scale production of corrugating medium and achieve a utilization rate of approximately 70% in fiscal year 2011. "With the additional 360,000 tons of corrugating medium paper production capacity, we are set to expand our market share in northern China's rapidly growing paper industry," said Zhenyong Liu, chairman and CEO. "The newly acquired production line will increase our total production capacity from the existing 280,000 metric tpy to 640,000 metric tpy by 2011. The continued progress and development of our regional economy and the domestic consumer and packaging industries have resulted in robust demand for corrugating medium paper products. We believe the additional capacity will enable us to better serve the growing demand for corrugating medium paper, contributing to our future revenue growth and profitability."
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