Stora Enso chief executive Jukka Hrml (pictured) said: "Our cooperation with Huatai Paper, the leading provider of newsprint in China, will open up new business segments for Stora Enso in China."

The total investment on the project, which is subject to approval by Chinese authorities, is 58m (83m), with Stora holding a 60% stake.

The 200,000-tonne-capacity mill will produce supercalendered magazine paper and other grades sourced from recovered fibre. The mill will feed the growing Chinese demand for offset papers.

Hrml said: "The key strategic aims for Stora Enso are to strengthen our market position in the core product segment of publication paper, to grow with our key customers and to continue expanding in new growth markets such as China."

Stora Enso hopes to start production in late 2007, with assembly of the production line scheduled to begin in the middle of this year.

Key components are to be sourced from a machine formerly at the firm's Maxau Mill in Germany.