MONTERREY, Mexico (From news reports) -- Grupo Gondi has announced plans to construct a new 400,000 ton containerboard mill near Monterrey, Mexico.

It will be built on a 2.5 million square foot site in the Nexxus industrial park in the neighboring industrial suburb of Guadalupe, adjacent to the group's new 516,000 square foot corrugated and high graphics "hybrid" packaging plant.

When it originally announced the new $300 million mill last spring, Gondi did not name a location. The new mill will run the largest containerboard machine ever installed in Mexico. It has also raised the capacity from the 350,000 tons/year originally announced.

The machine is to produce lightweight recycled linerboard and corrugating medium, and will boost Grupo Gondi's total capacity to 1.1 million tons/year of containerboard and boxboard on its seven paper machines.

Grupo Gondi CEO Eduardo Posada said the new paper mill will not only "guarantee supply" to its own converting plants, but will give the company the opportunity to offer products to local converters and for the export market. He said the project will "consolidate an important packaging cluster" in northern Mexico, with good logistics to also serve the southern US market.

The company has been growing rapidly since entering into a joint venture with WestRock in early 2016. WestRock, the second largest containerboard and box maker in North America, contributed three of its corrugated plants in Mexico plus $170 million in cash and stock in exchange for a 25% equity interest in the combined company with Grupo Gondi.

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