The Board of Directors of Nordic Paper has announced a substantial investment of approximately SEK 850 million at the Bäckhammar mill. This strategic move aims to enhance sustainability performance and bolster the competitive stance of the facility. A pivotal aspect of this investment entails the establishment of a new wood room, enabling strategic adaptability in raw material sourcing while optimizing production efficiency. An integral environmental upgrade involves the installation of a cutting-edge electrostatic filter, projected to reduce airborne dust emissions by over two-thirds. The infusion of investments is foreseen to contribute around SEK 100 million annually to Nordic Paper's EBITDA, while simultaneously establishing a solid groundwork for potential future production growth.

It's worth noting that the investments outlined in this decision have been sanctioned within the framework of the existing production permit. Notably, a new production permit was granted to the Bäckhammar mill on January 31, 2023. However, legal enforcement of this new permit remains pending due to an ongoing appeal from a third party.

Anita Sjölander, CEO of Nordic Paper, underlined the significance of this investment, stating, "Bäckhammar is a highly competitive production unit. It is also one of the most climate-efficient production plants in the global kraft paper industry. With these investments, we further strengthen the competitiveness of the plant at the same time as we improve our environmental performance. The investment decision has been made considering our strong balance sheet and opportunities for organic growth in Bäckhammar in the future."

The investment initiatives are scheduled to transpire between 2023 and 2025, financed through existing credit facilities. The primary cash flow impact is expected in 2024 and 2025, exceeding SEK 300 million annually. There will also be a cash flow effect in 2023, primarily concentrated in Q4, along with a minor effect extending into 2026. The incremental EBITDA contribution of around SEK 100 million from these investments is projected to take full effect starting in 2026.

Nordic Paper's Bäckhammar facility is dedicated to manufacturing unbleached kraft papers of varied qualities, primarily catering to packaging applications. Sourced from sustainably managed forests in mid-Sweden and sawmill chips, the facility's main products encompass flour sacks, carrier bags, and bread pouches. While the primary market lies within Europe, these papers are distributed across the globe.

Source:nordic-paper.com

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