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 in the project, which is subject to approval by the Chinese authorities, is estimated to be 58m (83m), with Stora Enso taking a 60% stake.

The mill, which will have an annual production capacity of 200,000 tonnes, will produce supercalendered magazine paper and other publication paper grades based on recovered fibre. The mill will feed the growing demand for offset printing papers in China.

The firms hope 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 Stora Enso's Maxau Mill in Germany.