Lee & Man Paper Manufacturing has clarified the future of its $1.2 billion paper and pulp manufacturing factory in southern Hau Giang province.
Lee & Man Paper Manufacturing has clarified the future of its $1.2 billion paper and pulp manufacturing factory in southern Hau Giang province.
Standing Deputy Chairman of Hau Giang People’s Committee Nguyen Lien Khoa told VIR that the Hongkong-based firm would put the project into operation by July, 2013 after the company was told to start work or face losing the licence of the big project.
The Hongkong paper and pulp manufacturer pledged to go ahead, but asked the province to create more favourable conditions for the project to get off the ground, said Khoa.
The Vietnam plant will be Lee & Man’s second production base besides its five plants in China.
The two million square metre plant was licenced in 2007 and expected to be in operation in 2009 with a planned annual capacity of 400,000 tonnes of containerboard and 150,000 tonnes of bleached hardwood kraft pulp.
However, since 2008, Lee & Man has delayed the project due to rising energy costs and global economic troubles. In the 2008-2009 financial year it even cancelled the project, but in 2009 it decided to climb back onboard.
According to Lee & Man, despite the current short-term economics uncertainty in Vietnam, the mother company’s management still strongly believed the Vietnam project would be highly successful because Vietnam had an excellent wood supply. In addition, it could export out of Vietnam at competitive prices, unlike China due to tax reasons and ASEAN’s containerboard market demand was growing rapidly.
The group’s prepaid lease payments comprise leasehold land held under medium-term leases located in Vietnam in 2010 and 2011 which are worth $4.8 million and $5.8 million.