Stora Enso plans to increase its area of plantations in China to 160,000 hectares by 2010, according to a report by Bloomberg. Stora Enso currently has 60,000 hectares of plantations in Guangxi in the south of China.
Stora Enso started investing in Guangxi in 2002, with a target of establishing 120,000 hectares of plantations. In November 2005, Stora Enso signed an agreement with Gaofeng Forest – Pulp & Paper Company to establish plantations on 34,000 hectares of land on several state-owned farms owned by Gaofeng. The Guangxi government has assigned Gaofeng to be the Chinese owner of an integrated plantations, pulp and paper project in Guangxi. The agreement allows Stora Enso to expand the area of plantations to 60,000 hectares. Stora Enso has started the application process for a 1 million t/yr pulp mill and a 1 million t/yr paper and board mill in Guangxi.
UNDP carried out an Environmental and Social Impact Assessment on the Guangxi plantations. At the end of March 2006, Stora Enso signed a memorandum of agreement with UNDP aimed at addressing the findings of UNDP’s assessment over a five-year period.
In June 2006, Stora Enso announced that it had signed a loan agreement with the World Bank’s International Finance Corporation for a total of US$300 million to finance Stora Enso’s current and future operations in China. The loan includes a US$200 million B loan syndicated to BNP Paribas, Calyon, Citigroup, The Bank of Tokyo-Mitsubishi UFJ, ING Bank, Nordea and Skandinaviska Enskilda Banken.