Oslo, Norway-based Norske Skog has announced it will convert two newsprint paper machines into recycled-content containerboard production. The conversions in Golbey, France, and Bruck an der Mur, Austria, “will introduce 765,000 metric tons of competitive containerboard capacity to meet the growing demand for renewable packaging,” states the company.
The containerboard production will be 100 percent based on recycled fiber, says the company, and the site in France “will use green energy generated from a new biomass plant being constructed at the Golbey production site.”
Norske Skog says its newsprint capacity will be reduced to 360,000 metric tons, “balancing the market” for its remaining European publication paper capacity.
“This is a milestone in Norske Skog’s strategy to become a leading European packaging producer through conversion of publication paper capacity,” says Norske Skog board chair John Chiang. “We will continue to optimize our broad asset base to diversify within high-growth fiber segments and maximize cash flows from the publication paper business. This marks an important step in Norske Skog’s evolution as we look to enhance long-term value for all stakeholders.”
Norske Skog plans to invest approximately €350 million ($418 million) in the conversion projects over an 18-month period starting in the second half of this year.
“The conversions at the Golbey and Bruck mills are profitable investments that will enable Norske Skog to establish a strong presence in the growing packaging market,” says Norske Skog CEO Sven Ombudstvedt. “In addition, it represents a major step in our continued effort to direct Norske Skog into a growing business, enhancing value to our shareholders and ensuring sustainable cash flow growth.”
At the Golbey mill in France, approximately €250 million ($299 million) is planned to be invested to convert paper machine one (PM1) from its current 235,000 metric tons of newsprint capacity to 555,000 metric tons of recycled-content containerboard capacity. Following the conversion in 2023, Golbey will have 555,000 metric tons of containerboard capacity and 330,000 metric tons of newsprint capacity.
At the Bruck mill in Austria, approximately €90 million ($107 million) is planned to be invested to convert PM3 from its current 125,000 metric tons of newsprint capacity to 210,000 metric tons of containerboard capacity. Following the conversion in 2023, Bruck will have 210,000 metric tons of recycled-content containerboard capacity and 265,000 metric tons of lightweight coated magazine capacity.
“Both mills are positioned close to the consumer markets of containerboard in continental Europe, have established access to recycled fiber, and represent some of the best brownfield conversion opportunities in the market.” says Ombudstvedt.