Nine Dragons to buy a paper mill in Vietnam

Nine Dragons Paper Holdings Ltd<2689>, China's biggest maker of containerboard, announced on Sunday that it may buy a paper mill in Vietnam to increase productivity and lower costs.

Currently, the negotiation between the two sides is well on track and is expected reach an agreement in one or two months, the company said in a statement, without giving the target investment size.

The Hong Kong-listed company plans to increase annual capacity at the Vietnamese mill by about 400,000 metric tons a year by transferring to the plant a machine originally ordered for China, according to the statement.

Nine Dragons will release its earnings report for 2007 fiscal year today. Its net profit is likely to jump 21% from a year earlier to RMB 1.14 billion and capacity may increase to 5.35 million tons in the first half of 2008, CITI Group predicted.

Its H-shares fell 2.4% to HK$10.70 on Mar. 14, bringing its decline this year to 46%.