The focus of private equity investors in China time and again goes back to domestic consumption, an increasingly important growth engine in the world’s second largest economy.

  Asian private equity firm RRJ Capital has agreed to invest $50 million in one of China’s largest paper packaging firms, Nature Packaging Group, according to a person familiar with the situation. 

  The investment will give RRJ a “substantial minority” stake in Nature Packaging, he added. RRJ’s investment will dilute the stake held by the firm’s chairman and founder Lin Shiwang, who will remain invested.

  Nature, based in China’s southeastern province of Fujian, provides packaging services for sectors including apparel, food and beverage and home appliances. Its customers include beverage conglomerate Hangzhou Wahaha Group Co., liquor maker Tsingtao Brewery, as well as sportswear makers 361 Degrees International Ltd. and Xtep International Holdings Ltd. Nature makes a range of paper products from cartoons, shoe boxes and paper bags, to high-end boxes for belts and cuff links.

  The investment gives RRJ a way to capitalize on China’s growing consumption, especially among its middle class, said the person. One of the perks of investing in packaging is that the industry is not reliant on the success of any one brand. Investors have gotten into trouble betting on certain chains and brands in China’s food and beverage industry, where food scandals, for example, have delivered big blows to the reputation of dairy products produced on the mainland.

  China’s paper packaging industry is “very fragmented” and Nature Packaging, because of its large size, is in a position to expand quickly, said the person. The business earns higher margins than upstream services like manufacturing of raw paper products, including paper pulp. Nature Packaging supplies more than half of the paper packaging needs for many of its customers, he added.

  The firm, founded in 1978, owns two production facilities in Jinjiang city in Fujian province and another facility in the southeastern city of Xiamen.

  RRJ isn’t the first private equity firm to cotton on to the attractiveness of packaging companies. U.S. private-equity firm TPG Capital spent $600 million in 2012 on a Taiwanese packaging company that had manufacturing facilities in China, including Shanghai, Guangzhou and Suzhou. The firm, HCP Holdings Inc., produces luxury packaging for cosmetics firms including L’Oreal SA, Shiseido Co., and Procter & Gamble Co.

  RRJ, founded in 2011 by former Goldman Sachs Group Inc.GS +1.48% banker and founding partner of China-focused Hopu Investment Management Co. Richard Ong, is based in Singapore and Hong Kong. The firm is investing out of a $3.5 billion second pan-Asia fund which it raised last year.