The Finnish producer has signed a memorandum of understanding with representatives of the Guangxi Zhuang autonomous regional government to jointly conduct the study, which will also look at industrial size forest plantations.

The news follows Stora Enso chief executive Jukka Hrmls announcement last month that the company would continue to invest in its core business (PrintWeek, 24 May).

Stora Enso Asia Pacific senior vice president Eero Palokangas said: "It seems that the Chinese market is still growing and we want to be a part of it."

Palokangas said the feasibility study would start straight away and could take up to a year to research.

Although it was too early to be specific, Palokangas said Stora Enso would be aiming for an integrated operation with capacity for around 300,000 tonnes of pulp and 400,000 tonnes of paper.

Stora Enso considers the Guangxi region as a promising area for growth with a good source of raw material.

Palokangas said research showed the area would be good for growing a strong source of eucalyptus.

The region is a rapidly developing area where emphasis has been put on sustainable and environmentally sound development of forest plantations.

Story by Andy Scott