Ahlstrom establishes joint venture to start production of medical papers and masking tape in China

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Source: Ahlstrom Corporation

Ahlstrom Corporation, a leading developer and producer of nonwovens and specialty papers, has today signed a joint venture agreement with Longkou Yulong Paper Co. Ltd, a paper producer based in Longkou, in the province of Shandong in northeastern China. The parties have agreed to establish a new manufacturing facility in the Zhuyouguan Industrial Park in Longkou for the production of medical papers used e.g. in sterilization wraps, and masking tape substrates for the building industry in the Asian market. The parties have agreed that Ahlstrom will have a 60% share in the joint venture and Longkou Yulong Paper will have a 40% share.

The total estimated investment amounts to EUR 21.9 million, of which Ahlstrom will invest EUR 13.1 million. The start-up of the new plant is planned for the summer of 2012. Ahlstrom President & CEO Jan Lång regards the joint venture as an important step in the implementation of Ahlstrom's growth strategy in Asia, and of mutual benefit for both companies. 'We are very pleased to have Yulong Paper as our joint venture partner in China, as the company is very well established in the local paper market and has strong expertise in the paper industry.

Through this joint venture, we will be able to serve our local customers in China and Asia in the growing healthcare and building markets', Jan Lång states. The new site will be part of Ahlstrom's Food & Medical Business Area, which accounted for approximately 20% of the Group's net sales in the third quarter of 2010. The agreement is still subject to the necessary approvals by the authorities and the fulfillment of general closing conditions. Ahlstrom currently generates about 10 percent of its annual net sales in Asia, and has stated that its strategic target is to grow its Asian footprint markedly from the current level. As part of implementing this growth strategy, Ahlstrom acquired the automotive filter manufacturer Shandong Puri Filter & Paper Products Ltd, based in Binzhou, Shandong, in September.

In addition to the new plant to be established, Ahlstrom has four other manufacturing plants and twelve sales offices in Asia.

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