The mill will have an annual production capacity of between 400,000-450,000 tonnes for the manufacture of uncoated woodfree paper.

The company said it had taken the decision to build the mill in China, as it was one of its main markets, with more than 25% of its total pulp production.

The Chinese market consumes more than 40m tonnes of paper and board per year, 15% of global production. It is one of the fastest growing pulp and paper markets.

The Singapore manufacturer, one of the world's largest producers of paper and pulp, will build the mill in the southern province of Guangdong.

The plant should be operational by mid-2006.