COMMERCIAL production of high quality paper began late last month at the new mill at Maubin in Ayeyarwaddy Division, an official from the Ministry of Agriculture and Irrigation said.

A general manager of the ministry’s Myanma Jute Industries, U Ye Gaung, said the mill would produce 5000 tonnes of white paper a year from jute, which grew in abundance in the area.

“We have made test runs and the paper quality was found to be 80 per cent white, which is pretty good,” U Ye Gaung said in a telephone interview.

Commercial production had begun on January 29, when the opening ceremony was held for the mill, he said.

The mill was built as a joint project by the MJI and the China Yunnan Corporation, which provided nearly US$5.7 million worth of machinery. The MJI invested nearly K2 billion in the project, mainly on civil works, U Ye Gaung said.

“As agreed when we signed the contract in September 2002, we have paid 40 per cent of the cost for the machinery during the past three years,” he said. The balance would be covered from the sale of paper to the China Yunnan Corporation at a contract price of $700 a tonne, he said.

This would enable the balance of the machinery costs to be paid in about two years, said U Ye Gaung.

He said the project was mutually beneficial as it enabled the corporation to sell its machinery, while Myanmar would be able to produce an import substitute.

The paper would be sold on the domestic market after the machinery had been paid for.

“Instead of exporting raw jute, we are moving forward to producing a value-added product which will fetch a better price and also create jobs,” U Ye Gaung said, adding that the mill has a workforce of 300.

He said the mill, which would need 15,000 tonnes of raw jute a year, was environmentally friendly because it did not contribute to deforestation.

U Ye Gaung said MJI previously operated a jute bag factory at Maubin but it had ceased production because of competition from plastic bags, which were cheaper.