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Indonesian tycoon Tanoto plans US$1.5 billion lyocell fibre plant in Shandong, raising bets on China after Vinda takeover

Tanoto’s flagship Royal Golden Eagle signed an agreement to build a plant in eastern Shandong province, according to a local newspaper report

Billionaire spent US$3.3 billion on 92.3 per cent of Vinda he did not already owned; stock expected to be delisted in August

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Sukanto Tanoto runs a US$35 billion global paper and edible-oil manufacturing empire . Photo: Facebook/ Sukanto Tanoto

Published: 3:02pm, 23 Apr 2024

Indonesian billionaire Sukanto Tanoto is planning to invest 11 billion yuan (US$1.5 billion) to build a lyocell fibre plant in eastern Shandong province, raising his bets on China soon after a US$3.3 billion takeover of tissue-paper manufacturer Vinda International.

His flagship company Royal Golden Eagle (RGE) signed an agreement with Shandong Jining People’s Government to invest in the facility in Jining city with an annual production capacity of 600,000 tonnes, the Dazhong Daily reported on its website on Monday. RGE is optimistic about Shandong’s growth prospects, it added.

Shandong has a solid industrial foundation, strong supporting capabilities and great potential for consumption growth, the daily cited Belinda Tanoto, a managing director at RGE, as saying during a meeting with provincial officials in Shanghai. The partnership would contribute to Shandong’s green, low-carbon and high-quality development, she added.

Lyocell is a non-toxic, biodegradable semi-synthetic fibre that can be used in paper or textile manufacturing. An RGE spokesman based in Singapore confirmed the investment when contacted by the Post.

RGE is a resource-based natural fibres and edible oil manufacturer with more than US$35 billion in assets, according to its website, with operations in Indonesia, China, Brazil, Spain, and Canada.

Jinan city, the capital of Shandong province. Photo: Shutterstock

The 74-year-old founder, whose family migrated from southeastern Fujian province, will be deepening his business ties in China, especially in the paper industry. The group established a plant in Rizhao city in 2005 to manufacture paper, and started producing lyocell in 2020 with a 20,000-tonne annual capacity.