Nov. 26 (Bloomberg) -- China International Investment Stock Ltd. signed a contract to invest 320 million euros ($415 million) in building a paper mill in Croatia with local PAN Papirna Industrija d.o.o.
The paper- and cellulose-making facility and a geothermal plant to supply power will be built in Slatina, western Croatia, Winston Chia, Chief Executive Officer of the Chinese group, said in an interview in Zagreb. The Qingdao, China-based company will hold a 70 percent stake in the investment, while the rest will be held by PAN Papirna Industrija.
Croatia, which is set to become the 28th member of the European Union in July, needs foreign investment to revive its economy after three years of recession and stagnation. Unemployment in the nation of 4.2 million has reached 19.6 percent in November.
“This is the largest greenfield investment in Croatia,” Marinko Mikulic, owner of Zagreb-based Pan Papirna Industrija, said in an interview. The plant will use a hybrid reed “specially developed” for the mill and grown locally, he said.
Financing for the project is secured by Cyprus’ Faisal Islamic Bank of Kibris, a subsidiary of Dubai Islamic Bank PJSC, Chia said.
The building of the plant, which will employ about 500 people, will start within the next 12 months, Mikulic said.
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