China Sun Paper Industry Co Ltd signed a project development agreement with the Lao government on Monday, for an extensive acacia tree plantation for paper production in Savannakhet province.

The deal, closed in Vientiane , will initiate a programme in which the company will plant industrial acacia trees and build a paper mill in Phin and Xepon districts to produce paper for both local and export markets.

The company has already invested US$3 million to build a greenhouse facility for growing seedlings, yielding about 100 million seedlings this year.

After signing the contract, the company will begin to plant a demonstration forest to encourage and instruct local people how to plant the collaborative forest themselves, which is then planned to expand to more than 10,000 hectares each year.

Company General Manager Bai Maolin said “We plan a 30,000 hectare company planted demonstration forest and a 70,000 hectare collaborative forest with local people within 2 or 3 years.”

The company will also provide technical support and help for local people involved in the project, as well as benefiting the local community by building a school and hospital.

Under the plan, a building to house employees will be constructed by the end of this year, followed by a factory at the beginning of 2010. The company plans a production capability of 300,000 tonnes of paper pulp in 2011.

Mr Bai told journalists “We will make use of the Lao workforce and land resource advantages to carry out our forest-pulp-paper integrative manufacturing pattern.”

“We will not only plant trees but also build a factory. We will use the local workforce and develop land resources, and also pay tax to the local government and provide more job opportunities for local people.”

China Sun Paper Industry Co Ltd in Laos belongs to Shan Dong Sun Paper Industry Joint Stock Co Ltd, China 's largest private paper making enterprise and a large-scale group on the stock market comprising seven industries, including paper making, chemical plants, thermoelectricity and scientific research.

The capital value of Shan Dong Sun Co Ltd is US$2 billion, while its stock market value is US$3 billion. The company's 2009 production capability was 3 million tonnes.