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UPM to Sell Stracel Mill to Blue Paper for Conversion to Fluting, Test Liner Production

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UPM, Helsinki, Finland, has signed an agreement to sell assets and part of the land of the UPM Stracel paper mill site in France to Blue Paper SAS, the joint venture company of VPK Packaging Group NV and Klingele Papierwerke. The transaction is expected to close during March once all legal and administrative conditions are fulfilled.

UPM stopped production of coated magazine paper at the mill on January 4. Blue Paper SAS will convert the mill to produce recycled fiber-based fluting and test liner. Production is expected to start after completing investments this September. Blue Paper SAS will create 130 new jobs at the mill that will be offered to former Stracel employees.

Also included in the purchase along with the paper machine are a waste-water treatment plant, a biomass boiler, and other ancillary equipment. With a trim width of 8.5 meters, the paper machine previously produced LWC paper at a speed of 1,600 m/min. From September, the machine will initially have an annual capacity of some 277,000 tons of fluting paper and testliner ranging from 70 to 130 gsm. Production capacity is set to increase to more than 400,000 metric tpy in due course.

The investment to bring the Strasbourg paper plant into line with the latest technical, economic, and environmental standards will total more than EUR100 million. Metso and Kadant are main suppliers for the paper machine and stock preparation, respectively.

The conversion work covers a range of measures that includes a new stock preparation based on waste paper, a new headbox, adaptation of the gap former, conversion of the press and pre-dryer section, a new film press, a new after drying section, improvements to the winders, a new anaerobic waste water treatment, and the introduction of combined heat and power generation. Further significant investments will be made in the areas of automation, process system, paper reel handling, technical and commercial computer systems, starch preparation, and extensive civil works.

The sale of Stracel was part of UPM's plan to adjust its magazine paper and newsprint paper capacity to match the needs of its global customer base originally announced in August 2011.

Klingele and VPK have a joint annual production capacity of 600,000 metric tons of paper and 1,000,000 metric tons of corrugated packaging. This level of demand allows a large portion of the output of Blue Paper to be sold internally, which significantly reduces the investment risk of this additional capacity in corrugated board based on wastepaper.

 

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