SCA to invest 1,45bn in pulp production at the Ortviken paper mill in Sundsvall

Specifications:

Name:

SCA to invest 1,45bn in pulp production at the Ortviken paper mill in Sundsvall

Location:

Sundsvall

Company:

SCA

Estimated Cost:

1,45bn

Source:

sca.com

Introduction:

SCA intends to invest SEK 1,45bn in the production of chemically pre-treated thermo-mechanical pulp (CTMP) at the Ortviken paper mill in Sundsvall. In parallel, SCA is initiating consultations with trade unions and employee representatives to discontinue the production of publication paper at the mill.

Features:

SCA intends to invest to achieve an annual production volume of 300,000 tonnes of CTMP pulp at Ortviken, using the existing infrastructure. The investment  is expected to give a positive EBITDA-effect of approximately SEK 0.3bn per annum. Expected start of production in the new mill is the beginning of 2023. SCA today has a production capacity of 100,000 tonnes of CTMP pulp at the Östrand pulp mill. This production will be phased out when the new line starts up, which will allow a future increase in the production of kraft pulp at Östrand Pulp mill.

The closure of publication paper manufacturing at Ortviken paper mill proposed by SCA will affect about 800 employees, primarily at Ortviken paper mill, but also in other parts of SCA’s operations. The closure would result in non-recurrent costs with cashflow effects which are estimated not to exceed SEK 0.9bn and an impairment of about SEK 1.1bn.

Negotiations under the Co-determination at Work Act (MBL) with trade unions will now begin regarding the plans to discontinue paper production at Ortviken paper mill, the investment in CTMP production at Ortviken and the impact on other SCA operations.