In search of more fiber raw materials, Chinese paper mill buyers are setting off a global buying spree.
On August 30th US time, NDPaperLLC, a wholly-owned subsidiary of Nine Dragons Paper, and Canada Resolute Forest Products reached an agreement to acquire the company's Pulp Mill in Fairmont, West Virginia.
The Fairmont plant was commissioned in 1995 and was acquired by Resolute in 2012. It has 95 employees and an annual output of 218,000 tons of recycled bleached kraft pulp (RBK). It is one of the three pulp mills in the world that produces air-dried recycled pulp to produce high-grade wrapping paper and some household paper.
According to the agreement, Nine Dragons Paper will pay $55 million in cash and invest in part of the operating funds. The acquisition is expected to be completed within two months.
The completion of the acquisition is the second deal of NDPaper LLC in the United States within three months. At the end of May, NDPaper acquired Canadian Catalyst's two pulp and paper mills in the United States for $175 million. The two plants are located in Rumford, Maine, and Biron, Wisconsin, with a total pulp and paper capacity of approx 900,000 tons. The two acquisitions cost more than $230 million (about 1.57 billion yuan).
In mid-June, Nine Dragons Paper announced that Mr. Ken Liu has been appointed as an executive director and vice chairman since June 15, 2018. Mr. KenLiu was also appointed as the CEO of NDpaperLLC, a wholly-owned subsidiary of the company, responsible for North American operations.
Mr. KenLiu, 26, is the son of Zhang Yin and Liu Mingzhong, the brother of Liu Jinxi. He graduated with honors from Harvard University's Department of Government and worked as a consultant for Price water house Coopers for about two years. Since March 2016, Mr. Ken Liu has served as Vice Chairman of the largest raw material supplier of Nine Dragons Paper, overseeing the company's development, marketing and overall management. The announcement also mentioned that Mr. Ken Liu’s annual salary is about $400,000.
In addition to Nine Dragons Paper, there are other Chinese companies in the United States to investigate the acquisition of the target, Shanying International is an important one of them.
In August 2018, Zhejiang Shanying's indirect holding subsidiary Global Win Wickliffe LLC signed a "Equity Purchase Agreement" with Verso Paper Holding LLC. GWW invested US$16 million to acquire a 100% stake in Verso Wickliffe LLC held by Verso. The company will renovate Verso Wickliffe's existing equipment. Some newsprint production lines will be transformed into production of packaging papers and a production line of waste paper pulp will be erected to further stabilize the company's supply of imported raw materials.
According to GlobalWin's plan, the company will invest 500 million US dollars in the field of pulp, paper, packaging and waste paper recycling. GlobalWin plans to achieve more than $1 billion in sales in the United States by 2020.
In addition to Nine Dragons Paper and Shanying, there are many Chinese companies looking for acquisition targets in the United States, such as Taizhou Forest Paper, which are planning to acquire WestRock's closed paper mill in the United States.
