Turning close to 60 kilograms of waste into toilet paper, napkins and other household products would help minimise wastage and facilitate revenue generation.
The products will soon be made available to the Chinese market under 'Panda Poo' product line.
A box of 'Panda Poo' tissues is likely to be sold at 43 yuan ($6.5) in Chinese markets.
"The process of turning bamboo into paper generally involves the breaking down of fructose to extract fibre, a step that naturally occurs in the pandas' digestive tract," the paper company's president, Yang Chaolin, told Xinhua.
Panda faeces will be collected from three panda bases in Sichuan twice a week.
The waste material will be boiled, pasteurised and turned into paper after which it will be tested for bacteria before going on sale.