OREANDA-NEWS. June 20, 2013. Nine Dragons Paper has established four major national strategic production bases (Dongguan, Taicang, Tianjin and Chongqing bases), four supplemental regional production bases (Shenyang, Quanzhou, Leshan and Hebei Yongxin) and a foreign base in Vietnam, as the company said in the press release received by Lesprom Network. 

For the financial year ending 30 June 2013, the annual design production capacity of the Group has reached 12.55 million tonnes. Following the commencement of production of the two linerboard production lines at the Quanzhou base for a total of 0.65 million tonnes and a corrugating medium production line for 0.3 million tonnes at the Leshan base by the end of December 2013, it is expected that the total annual design production capacity of the Group will reach 13.50 million tonnes by then.

The Board is of the unanimous view that the Group’s leading position in the industry will be further strengthened and become irreplaceable given that the strategic production layout in the PRC and overseas has basically completed. Having considered the leading position of the Group and the current market conditions, the Board determined that it is necessary to make temporary adjustment to the strategic development target in the coming three years. The Group’s focus on strategic development will shift from rapid development in the past to a prudent and sustainable development stage with further control of capital expenditure, reduction of net debt to equity ratio and enhancement of profitability.

The Board of the Group has formulated the following plans in respect of the capital expenditure and net debt to equity ratio for the three financial years ending 30 June 2016 based on the adjustment of the strategic development focuses of the Group:

- A new 0.35 million tonnes testlinerboard production line installed in Shenyang is expected to commence production by the end of December 2015; a new 0.35 million tonnes kraftlinerboard production line is expected to commence production at the Vietnam base by the end of 2016.

- After the commencement of the two new production lines above in Shenyang and Vietnam, the total annual design production capacity of the Shenyang base and Vietnam base with two linerboard production lines each will reach 0.7 million tonnes and 0.45 million tonnes respectively.

- Currently a 0.35 million tonnes kraftlinerboard production line is being constructed at the Shenyang base. The production line is expected to commence production by the end of February 2014. The operation of an existing 0.1 million tonnes kraftlinerboard production line in Vietnam is in very sound operation.)

With market recovery and enhancement in profitability, the Group’s net debt to equity ratio (net debt / total equity) will gradually reduce, and is planned to reduce to 70%-80% before 30 June 2016.

Nine Dragons Paper (Holdings) Limited is the largest containerboard product producer in China and Asia (including Japan), and one of the largest producers in the world, in terms of design production capacity. The Group primarily manufactures and sells linerboard, high performance corrugating medium and coated duplex board. It also manufactures and sells recycled printing and writing paper, pulp and specialty paper.