The manufacturers claim that the new plant will provide innovative products to both the pharmaceutical and food packaging industries. The plant will produce 3,000 tons of high isolation, alto-extruded, multi-layer film and sheet packaging material once it's opened.

David Wu, CEO of Dragon International, said that as demand increases the company will add to more production lines.

"We forecast the three production lines can generate $100 to $125m in annual sales with $25 to $31 million (€23m) in net income within five years upon the completion of the manufacturing facilities," he said.

Nanoscale technology offers new opportunities for the packaging industry, and various potential food contact applications have been suggested, including improved barrier properties, better temperature performance, thinner films for flexible packaging and nanoscale pigments for inks.

The Chinese food and pharmaceutical packaging industry has grown by $2bn (€1.5bn) in annual sales with a growth rate of around ten per cent according to the company. Plastic packaging in the form of plastic bottles, blister packaging, strip and bags accounts for 95 per cent of packaged drugs.

In the Chinese food packaging market nano film is normally used in large infusion bags, frozen and fast food. The company said that industry statistics reveal demand for PVDC and PVC/PVDC, PVC/PE compound materials was more than 60,000 tonnes per year in 2005.

As it stands nanotechnology has made minor inroads in the food and drink industry, mainly due to consumer fears about the unknown risks the technology poses to their health. However food companies see great opportunity in the technology as a means of introducing innovative products to the market.

Dragon International is one of China's leading manufacturers and distributors of packaging materials, operating within central and eastern China.