Japan's Oji has kicked off construction of its $1.95 billion paper project in Nantong, Jiangsu province, after five years of preparation, said a senior local official yesterday.

The long-awaited project will be a strong rival to Chinese paper makers as its first phase comes onstream in 2010, said Chen Dexin, Party secretary of the Nantong Economic-Technological Development Zone Corporation.

A joint venture company, named Jiangsu Oji Paper Co Ltd, was set up last year, with Oji accounting for 90 percent of the investment and the Nantong corporation the rest.

Chen said the venture is designed to produce 800,000 tons of art paper and 700,000 tons of pulp when it is completed in 2014.

"Demand for paper in the Chinese market increases by 10 percent annually," said Li Shiwei, a zone official in charge of the project. "The project will partly ease the paper supply shortage."

Chen said the first phase of the project will be in operation in 2010, producing 400,000 tons of art paper annually with imported pulp.

But when the whole project is completed in 2014, Li said, it will produce 700,000 tons of pulp in Nantong with imported wood and then use the pulp to make paper.

Chen said the zone is witnessing a boom in foreign investment as the Yangtze River Bridge linking Nantong and Suzhou opens to traffic in April.

(China Daily March 28, 2008)