China’s Hwagain Group Buys Idled P&P Mill in Guangxi

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China’s Hwagain Group has acquired an idled pulp and paper complex in Chongzuo, Nanning city, Guangxi autonomous region, which it plans to restart and expand to 300,000 mtpy of bleached kraft pulp capacity and 300,000 mtpy of paper capacity.

The group move to buy the asset, which formerly belonged to bankrupt firm Guangxi East Asia Paper, in July 2018 for RMB 153.53 million ($22.51 million). The transaction was finalized last month.

Founded in 2004, Guangxi East Asia commissioned two 2.64 m-wide UWF paper machines with a combined capacity of 60,000 mtpy and a 95,000-mtpy bleached bagasse pulp line at the Nanning mill in 2008.

The fiber line was partly integrated with the two PMs, and surplus pulp was sold in slurry form to nearby paper mills.

Guangxi East Asia fell into a debt crisis and ceased production in early 2015. It was declared bankrupt in June 2018.

The Hwagain Group has set up a wholly-owned subsidiary, Chongzuo Hwagain, to run the newly acquired complex. Its restart and expansion of the idled mill will be carried out in two phases, according to a recently-approved environmental impact assessment report.

The first will see the rebuilding of the existing PMs to boost their total UWF capacity to 100,000 mtpy.

It will also switch the pulp line furnish from bagasse to a mix of bamboo and eucalyptus chips, and increase its capacity to 100,000 mtpy.

The second phase will include the installation of a new 200,000-mtpy bleached kraft pulp line, which will also be fed with bamboo and bagasse, and 12 new tissue machines with a total capacity of 200,000 mtpy.

The company has not announced a timeline for either phase.

The Hwagain Group currently runs 150,000 mtpy of tissue paper capacity, 60,000 mtpy of UWF capacity and a 170,000-mtpy bamboo pulp line at a mill in Ganzhou city, Jiangxi province.

The group once had a mill in Nanning city, Guangxi province, where it produced 55,000 mtpy of tissue and UWF.

The facility was shut and demolished due to environmental concerns.

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