Lee & Man to build new packaging paper mill in Malaysia
31 October 2018
Lee & Man is preparing its entry into the Malaysian market. The Chinese company reportedly wants to build a new packaging paper mill with capacities of 700,000 tpy.
Lee & Man Paper Manufacturing has become the latest Chinese paper group to announce plans for foreign investments. Mark Lyndon, the group's procurement agent in Europe, confirmed that Lee & Man wants to build a new packaging paper mill in Malaysia.
According to a report from the South China Morning Post, the new mill will be located in Sepang not far from Kuala Lumpur and is set to produce high-grade packaging paper - intended for export to China - with a capacity of 700,000 tpy as well as recycled pulp with a capacity of 550,000 tpy. It is expected to create about 1,200 jobs.
South China Morning Post says that Lee & Man will invest HKD5.1bn (around €560m) in the new site. No more details have been disclosed on the project yet.
Investing abroad is currently a trend among Chinese packaging paper manufacturers. Importing recovered paper, the raw material for producing packaging paper, into China has become more and more complicated in recent months and years. Quality requirements are very high, the import of mixed paper is banned completely and the government is reducing the number of recovered paper import licences for Chinese paper producers.
These have to ask themselves for how long they will be able to import their raw material, especially since China intends to bar imports of all solid waste by the end of 2020. According to information from the market, paper mills are already having trouble in finding enough recovered paper for packaging paper production, as China's collection volumes are not sufficient to meet the mills' enormous demand. The production of containerboard, in turn, is necessary to make cartons for the goods that China exports to the world.
That is why Chinese companies are currently expanding into other countries, especially in the USA.