Billerud Korsnäs plans to invest in production reorganisation and growth, exit white liner market

Friday, Nov 13, 2015

Four paper machines might be closed at Gruvön mill as Billerud Korsnäs is considering to install new board machine at the site and decrease its volumes in oversupplied markets.

Billerud Korsnäs is considering a SEK5bn (€536m) investment over the next three years in order to "improve underlying profitability and secure organic growth". The company expects the "current and planned investments in market position, structure and innovation" to drive growth in sales and profitability, Billerud Korsnäs announced today at the Capital Day in Stockholm, Sweden.

Billerud Korsnäs's investment plan comprises five major projects. As previously announced, Billerud Korsnäs intends to move the 100,000 tpy machine glazed (MG) kraft paper machine from Tervasaari to the pulp integrated Skärblacka mill and invest in surface treatment capacity at the site. Furthermore, the company plans to build a new board machine at the Gruvön site with an installed capacity of 500,000 tpy of liquid packaging board, cartonboard, food service board and white-top kraftliner and move white-top kraftliner production from Gävle mill to the new machine in Gruvön.

The decisions on moving the Tervasaari paper machine and installing the new BM in Gruvön have not been made yet and are expected for Q2 and Q4 2016, respectively. Should the feasibility studies prove positive, production on the additional MG paper machine in Skärblacka could start at the end of Q4 2017. The new Gruvön BM could start up in 2019.

The decision to build a new BM at Gruvön could also have consequences on other paper production activities at the site. Billerud Korsnäs is considering the shutdown of four paper machines at the Gruvön mill in order to decrease volumes in oversupplied markets and exit white liner production. The machines have an overall capacity of 300,000 tpy, 40% of which is kraft paper and 60% liner. Profitable kraft paper volumes from Gruvön would be moved to Karlsborg, Skärblacka and Pietarsaari mills, the company said.

The company stressed that so far no decisions have been made on the closure of the four paper machines at the Gruvön mill.

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