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Asia Venture Advances Consolidation

Magazine article Editor & Publisher

Asia Venture Advances Consolidation

Article excerpt

DIRECTORS AND SHAREHOLDERS of newsprint makers on three continents approved a transaction that will jointly create a major newsprint and groundwood paper company in Asia.

In the $1 billion deal, Montreal-based Abitibi-Consolidated, Norway's Norske Skogindustrier and Korea's Hansol Paper Co. each will hold a one-third stake in a new Singapore-based company that will own 100% of Hansol's Chonju mill in Korea (1.04 million metric tons per year). It also will take over Hansol's 53% stake in Shanghai Hansol Potential Co., a 130,000-tpy newsprint joint venture in China.

At the same time, Norske Skog was closing its reported $500 million acquisition of Shinho newsprint mills in Korea and Thailand (300 tpy total capacity). The four mills' combined annual production capacity of more than 1.4 million tons represents a 15% share of the Asia-Pacific market, or 40% of the Asian market outside Japan.

Abitibi said the objective of the transactions is "to create the largest Asian newsprint operation outside Japan." It called the mills "extremely modern, low-cost assets in a long-term growth region." The average age of paper machines is five years. …

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