A joint venture company is to be set up to investigate and make preparations for wood supplies in China with a view to creating a pulp mill.

UPM-Kymmene Corporation has signed a letter of intent with two Chinese companies to establish the project in Guangdong Province.

In the first phase the company will concentrate on forestry operations in Zhanjiang region. The total cost of this will be US$44m, of which UPM-Kymmene’s share of US$20m will be spread over many years.