ABU DHABI (From news reports) -- A new recycled paper mill will be established in Khalifa Economic Zones Abu Dhabi (KEZAD) in a move to support the UAE circular economy.

The mill will manufacture eco-friendly biodegradable recycled kraft papers in Abu Dhabi after an agreement between Star Paper Mill and RC Paper Machines, which will expand its existing capacity with an investment of AED 200 million ($54 million).

The facility, which will manufacture recycled Kraft Paper Jumbo reels, will be built on a 59,000-square-metre space. The reels will be used to manufacture corrugated cartons and bag papers from recycled raw materials.

Kezad confirmed that a 50-year land lease agreement has been signed with Star Paper Mill, a specialist tissue manufacturer, to set up the facility.

Earlier this year, it was announced that Renov8 Polymer Industries Ltd will invest AED 552 million in a plastic recycling facility. Single-use plastic bags were banned in the emirate of Abu Dhabi in June.

Hussain Adam Ali, chairman of Star Paper Mill said: "In line with the vision of UAE leaders, we in Star Paper Mill believe that to be successful and create long-term value in the future, being sustainable and adopting a circular system is vital."

"We are using this opportunity as a huge advantage for us to create products to achieve reduced carbon emissions and operate as a sustainable industry."

The paper mill will have installed capacity of 135,000 tonnes.

The company is also reserving an additional 32,000 square metres next to the primary plot earmarked for the project to accommodate expected increase in demand.

The project will process the waste generated from the facility, using an effluent treatment plant to recycle water and reuse it.

The raw materials used, including OCC, NCC, NDLKC and sack kraft waste, will be sourced locally in the UAE to reduce transport-related emissions, the company said.

Star Paper Mill's current factory is a 27,000-square-metre hygiene tissue paper facility with current installed capacity of 36,000 tonnes.