Södra to Make Record Investments in 2012

Södra, Sweden, reports that its executive committee has set an appropriation limit that will permit a number of offensive investments in 2012. Group President Leif Brodén, noted that "in addition to earlier decisions concerning our participation in the development of wind power in 2012, we have now decided on an appropriation limit of SEK 1,895 million.

"This will permit a number of offensive investments to be made. We intend to continue investing in product improvements, but first and foremost we now perceive opportunities for further investments in bioenergy. We are taking into account an investment in Lignoboost at Södra Cell Mörrum that will involve a potential investment in new biomaterials in the future, as well as make the mill fossil fuel-free. We envision an investment in a new lime kiln at Värö, and even more pellet production capacity. It is important for us to make the most of the business opportunities available to us in bioenergy when our traditional products are finding things considerably more difficult."

The company adds that its budget also allows for another investment in textile (dissolving) pulp. Its plan is to convert another pulp line to the production of textile pulp.

"Hopefully we will have time to identify which of our lines is most suitable prior to the fourth quarter of 2012. Textile pulp offers major benefits in terms of quality, sustainability, and ecology, and we believe we will see good growth in years to come. Production of textile pulp will be commencing at Södra Cell Mörrum this month."

The company's forecast results for 2011 indicate an operating profit of almost SEK 1 billion and a return of 10% on capital employed. "We are seeing a similar result level in our budget for 2012, with uncertain environmental factors," Brodén concluded.