Stora Enso to Convert Varkaus Fine Paper Machine to Light-Weight Containerboard
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"Utilizing existing assets within Stora Enso and modifying them to a new product line is part of Stora Enso’s transformation to a value-creating renewable materials company focusing on growth markets," Stora Enso CEO Jouko Karvinen said.
"Varkaus is an ideal mill for this kind of conversion. It has an integrated pulp mill, a power plant and a suitable paper machine. In addition, the mill is well located from a raw material supply point of view and it has the necessary infrastructure and competence to run the project successfully," Karvinen added.
Renewable-fiber-based packaging has good growth potential in Europe and globally, and Stora Enso sees an opportunity to benefit from that growth by investing in competitive kraftliner capacity at Varkaus. Through the machine conversion, Stora Enso is taking advantage of the combination of two market forces: the decreasing global market for paper but increasing global market for renewable packaging board.
The conversion will decrease the company’s printing and reading annual sales by EUR 140 million from 2016 onward and increase renewable packaging sales by EUR 280 million when the machine is running on full capacity. The targeted EBITDA margin to the machine conversion in full run is above 15%, provided that the current market conditions prevail.
The conversion work is expected to be undertaken mainly during autumn 2015 and the containerboard machine is scheduled to start up during the fourth quarter of 2015. The current 280 000 metric tpy uncoated fine paper machine is planned to cease production by the end of August 2015. Following the conversion into a linerboard machine, Varkaus Mill’s capacity will be about 390,000 metric tpy of kraftliner and 310,000 metric tpy of brown unbleached kraft pulp. Most of the board production is planned to be sold externally.
Varkaus Mill will produce office paper grades until the end of August 2015. Stora Enso will continue serving its office paper customers from the two other uncoated fine paper units, Veitsiluoto Mill in Finland and Nymölla Mill in Sweden.
