Sep 06, 2005. /Lesprom Network/. International Paper Co. has signed an agreement to set up a joint venture firm in China to produce coated paperboard, its Chinese partner told Reuters on Monday. An executive with privately-owned Shandong Sun Paper Ltd., which is planning to list shares on domestic markets, said both partners signed the agreement on August 31 and will invest $480 million in the venture. The U.S. firm, the world's largest forest products company, is also in talks to buy 50% of Sun Paper's coated paperboard production assets, he said, though he declined to provide further details. State media have said Sun Paper, based in the eastern coastal province of Shandong, has two coated paperboard production lines capable of churning out 420,000 tonnes annually. Both firms were also conducting a feasibility study to invest a further $160 million for a third production line with annual capacity of 300,000 tonnes, said the executive, who declined to be named. Coated paperboard is used to package a variety of consumer products, including milk cartons and tobacco packs. Shandong Sun Paper is the fourth-biggest paper making company in China, state media have said. International Paper's businesses include paper and paper distribution, packaging and building materials, which generate revenue of about $25 billion annually. The company has operations in nearly 40 countries and employs about 83,000 people worldwide.