Four big news from the world of paper mills

Jool is co-investor in Zanders

Jool, a Swedish company has become a co-investor of German papermaker Zanders Paper. Jool Invest owns the Jool Group, the subsidiaries of which include Lessebo Paper and Ess-Enn Timber. The company also owns a majority stake in Tibro Sågverk, a saw mill based in Skaraborg, Sweden.

While the size of Jool’s stake in Zanders Paper and other specifics regarding the transaction had not been disclosed at the time of writing, the business said it has “a clear industrial mindset and will be an active partner bringing further experience and capital creating a strong foundation for the planned growth of Zanders Paper”.

Based in Bergisch Gladbach near Cologne, Zanders began insolvency proceedings last summer and was acquired in December by Norwegian pulp and paper businessman Terje Haglund, who is also a shareholder of Lessebo Paper and the chief executive of Virginal Paper.

Around 300 of Zanders’ 450 staff stayed on at the new company Zanders Paper, which has confirmed that it will continue to produce all of its core products following Jool’s investment, and is additionally planning to introduce further grades in the coming months.

Its existing portfolio, which includes Chromolux, Zanlabel, Zanbarrier, Zanpack, Zanjet, Silver Digital and RX Nature.

UPM shuts down machine in Bavaria

UPM plans to take out around 155,000 tonnes of magazine paper capacity by closing down a paper machine at its Plattling mill in Bavaria. The mill in Plattling makes coated and uncoated LWC and SC magazine papers and currently runs three paper machines. Its capacity at present is 785,000tpa.

UPM intends to permanently close PM10, which it said was the lowest capacity coated mechanical machine across all of its European papermaking operations. It was also described as having the “highest technical age”.

Around 160 jobs out of 590 at the mill will be lost as a result, and the move will involve restructuring charges. UPM said closing the machine down would result in savings of USD 20m a year. Consultation with employees will begin this month.

This further reduction in capacity comes at a time when a number of other paper manufacturers, including Stora Enso, Lecta and Burgo are in the process of machine closures or conversions.

UPM’s forest-based bioindustry businesses include pulp, paper, wood, biofuels and biomaterials. The Finland-headquartered group had overall sales of USD11bn last year.

Stora consulting employees about packaging board plans

The latest proposal would involve shutting one of the site’s paper machines with the potential loss of 400 jobs. Last summer the biomaterials group announced a feasibility study into converting its entire production of more than a million tonnes of Lumi coated woodfree paper into brown-based cartonboard and kraftliner on the two paper machines at the Oulu site in Finland, involving an investment of some USD700m.

The revised plans involve a spend of USD350m to convert PM7 to kraftliner with a capacity of 450,000 tonnes per annum, the modification of the pulp mill to produce unbleached brown pulp, and environmental improvements.

Paper machine 6 and a sheeting plant would be shut down, with the changes to take effect “by the end of 2020 at the latest”.

“The potential conversion of Oulu Mill would enable Stora Enso to further improve its position in the growing packaging business and take a major step in its transformation. The aim of the change is to improve the competitiveness of Oulu Mill and to ensure a long-term future for the mill,” the company said in a statement.

“The decision on the potential conversion will be made by the Stora Enso Board of Directors during the first half of 2019 after the co-determination process has been completed.”

The mill currently employs 600 staff and the co-determination negotiations with the entire workforce regarding the revised proposals will begin on 25 March.

Oulu is Stora Enso’s sole coated woodfree fine paper mill, so if the scheme goes ahead it would mean the group would exit that part of the market entirely.

Burgo’s conversion of the PM9 machine at Verzuolo from LWC to containerboard is set to go into production from Q4.

Separately, Lecta Paper has just announced that it will temporarily shut down coated paper machine 8 at its Condat mill in France from the end of April, and is looking into converting the line to produce materials for labels and flexible packaging instead.

Arjowiggins goes into liquidation

The Arjowiggins site in Bessé-sur-Braye will go into liquidation, leading to the loss of 580 jobs, while a sale has been agreed for the Château-Thierry plant alongside a partial sale of the Bourray operation.

Meanwhile, the Château-Thierry site, known as Greenfield, has been fully bought by German paper group Wepa. All 75 members of staff are expected to stay on.