Kemira sets up new plant in China

As international chemical giants are downsizing their business in paper industry due to less usage of printing and writing paper, Kemira announced on Tuesday the launch of its new production base in China.

The new plant located in the Nanjing Chemical Park will add a production capacity of about 100,000 tons annually, providing a wide range of chemical products for paper and pulp manufacturing, according to Kemira, one of the world's largest paper chemical companies.

"It is quite an aggressive expansion in China, considering how much we generated for the past year," Jari Rosendal, president and CEO at Kemira, told China Daily.

The top chemical company raked in about 100 million euros ($124.7 million) in China last year, and it plans to invest a total amount of $100 million in the new plant, which will be the largest of its kind in Asia, according to the Finnish company.

China's demand for pulp and paper chemicals has grown at a fast pace in the past decade due to a booming papermaking industries, including packaging, tissue and printing paper businesses, but the growth has been slowing down as people are going online for news and information, using less printing paper.

However, Rosendal believed paper business in China will only grow despite of a shrinking printing paper business.

Kemira has announced to acquire AkzoNobel's global paper chemicals business this year, and the deal is expected to reach about 153 million euros after completion in the first quarter of next year.

The acquisition will help double the Kemira's paper chemicals business in Asia, expanding its geographical reach and product portfolio, the company said.

"We don't just go around buying up companies to show how big we can get. It is a requirement of the market," Rosendal said. "We believe both production and demand will continue to grow in the world's largest paper market."