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Parenco Converts Idled Newsprint PM to Produce Packaging Paper

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Graphic paper manufacturer Parenco, Renkum, Netherlahnds, announced this past week that it has invested approximately EUR100 million with its owner H2 Equity Partners in the conversion of paper machine 2 (PM2). This machine was idled in 2009 by its then owner due to the declining demand of newsprint paper. After the conversion, PM2 will produce about 385,000 tons of packaging paper starting in mid-2016, intended for the production of corrugated board. With this investment, Parenco will create approximately sixty new jobs.

Conversion of PM2 is a next step in an investment program at Parenco that started two years ago when investment firm H2 Equity Partners acquired all shares in the company. At the time of the acquisition, Parenco was on the verge of permanently closing. Over the the past two years, PM1 had successfully resumed producing graphic paper for leaflets, flyers,and magazines.

Geert Wassens, Managing Director at Parenco, explained: "Globally, the demand for graphic paper is declining in principle and there is sufficient capacity. Restarting PM2 with this type of product was therefore not an option. The market for packaging paper has been growing for years however and it is expected to continue doing so. Extensive research showed that investing in a conversion to the production of packaging paper was the right step to guarantee long term growth and continuity for our company. Restarting PM2 means an enormous investment in human capital after years of downsizing."

"We will recruit over sixty new employees in the coming months for all kinds of operational and administrative positions. A challenge, as we will also extensively train a large part of these people. Paper making is and will remain to be a specialized job’, added Wassens.

PM2 was a very suitable candidate for conversion to packaging paper. It has a width of 8.4 meters, making this machine optimally able to provide modern corrugators with paper. In addition, the machine is designed to produce lower grammages which fits perfectly with the curret trends in the packaging industry.

Wassens stresses that the conversion does not mean that Parenco is turning its back on the graphic paper market. Absolutely not. With the products of the PM1 we have a strong position on the European graphic market, in which we will continue to invest. With the conversion we intend to broaden our activities."

A contract with machinery manufacturer Voith Paper GmbH & CO KG has been signed in for the first stage of conversion work. It is Parenco’s intention to sign a contract with Valmet Technologies, Inc. for construction of a new winder behind PM2. The preparatory activities are ready to start at the site in Renkum. Voith will work on the pulp line, the paper machine, and the starch preparation. They will also account for the integration of the installation in the existing factory. In August 2016 the first paper will roll off PM2 and will be shipped to cardboard manufacturers in Europe.
 

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