China’s Shandong Chenming to Start Pulp Line in Huanggang in June 2018

Shandong Chenming Paper Holdings has confirmed that it is forging ahead with the construction of a 300,000-tonne/yr swing pulp line capable of making bleached softwood kraft (BSK) and dissolving pulp (DP) at a new mill, though P&B capacity will not be added.

The line is going up at a greenfield site in Huanggang, in the central province of Hubei, with its startup scheduled for June 2018.

Shandong Chenming confirmed the pulp line construction after The People’s Daily, an official newspaper of the Chinese Communist Party, claimed on August 28 that the company’s scheme to erect 1.306 million tonnes/yr of paper capacity there was cancelled, as it would pollute the Yangtze River (on whose north shore it sits).

The paper capacity was apparently part of Shandong Chenming’s RMB 28.1 billion ($4.3 billion) plantation-pulp-viscose integrated project there.

In a June 2014 environmental impact assessment (EIA) published by the Huanggang government, Shandong Chenming proposed building five P&B machines at the Huanggang site after commissioning the pulp line, including three recycled containerboard units with a combined capacity of 1,034,000 tonnes/yr, a 204,000 tonne/yr virgin cartonboard machine and a 68,000 tonne/yr tissue machine.

Nonetheless a spokesperson from Shandong Chenming denied the axing of any P&B investments for environmental reasons in a recent interview with Eomiconc Observer, a Chinese newspaper, saying that the company has never considered such plans for Huanggang and the so-called 1.3 million tonne/yr paper project is "government propaganda."

But The People’s Daily’s report ascribed the cancelation to the 2016 national action plan to reduce pollution and protect the environment along the country’s longest river.

It forbids approvals for new chemical or paper and board (P&B) plants within 1 km of the river and its major tributaries, and indefinitely suspends EIA permits for any such projects less than 15 km away from the river bank.

The story in the highly authoritative newspaper caused huge concern over the fate of the project, which the listed paper giant has heavily invested in.

"The construction of the pulp mill and its pier is underway, and we have finished about one third of the installation work for the pulp equipment. We plan to start trial runs on the pulp line next June," a company contact told RISI’s PPI Asia.

The startup of the line was originally scheduled for the end of this year. The contact said the delay was caused by the action plan mentioned by The People’s Daily. Construction was suspended last year between March and June for reassessment of the environmental impacts and for resultant amendments to the project.

The government of Hubei gave the go-ahead to resume construction in June 2016, but little progress was made in the following three months due to heavy rainfall over the summer.

According to a document issued by the provincial government, the fresh green light was given on the condition of zero emissions from the future Huanggang complex.

To achieve that, the company is required to build a reclaimed water treatment plant that will recycle 70% of the mill’s wastewater for reuse. The city government of Huanggang city needs to build a sewage treatment plant to take care of the remaining 30%.

Also, while the government of Hubei mandated that Shandong Chenming abandon plans to build any P&B units at the new plant, it has been allowed to keep the 500,000-tonne/yr viscose staple fiber (VSF) capacity in its plans. DP can be converted into VSF and then to be used for textile and hygiene product production.

Shandong Chenming first announced the Huanggang project in 2008 when it established a subsidiary, Huanggang Chenming Pulp and Paper, in the region.There had not been any significant progress until it ordered key equipment for the swing pulp line in 2015.

Valmet has been tapped to provide equipment and services for the wood handling and pulp drying areas, the hardwood and softwood multi-grade fiber line, an evaporation plant, a recovery boiler, biomass gasification, lime kiln and for recausticizing. Andritz has been signed up to supply a continuous cooking plant.

The curb on chemical and P&B industries along the Yangtze River is part of a comprehensive environmental protection plan for the Yangtze River Economic Belt, which makes environmental protection and restoration paramount.

Stretching from Yunan province in China’s southwest hinterland to Shanghai on the east coastline, the belt covers nine provinces (including Hubei) and two municipalities in an area of 2.05 million km2, and accounts for more than 40 percent of both the national population and gross domestic product.

Consequent to the prioritization of environmental protection, some planned industrial projects, especially petro-chemical or coal powered ones, have stalled out. And some other P&B projects are under threat.