Paper manufacturer Norske Skog announces that it has decided to convert a newsprint production machine at its Bruck industrial site in Austria to the production of recycled packaging board. The project has already received a financing commitment from regional banks.
"This investment decision represents the start of a new era for Norske Skog and is a major step in our drive to become a leading independent European producer of high-quality, renewable and environmentally friendly containerboard. The conversion project illustrates the inherent potential of our industrial sites and will strengthen Norske Skog's asset base and cash flow generation for decades to come." says Sven Ombudstvedt, CEO of Norske Skog.
The converted paper machine will begin production in the fourth quarter of 2022. And it is expected to be capable of producing 210,000 tons of all-recycled fiber corrugated board in the second half of 2025.
The site will use steam from a new waste-to-energy plant that will be commissioned in the first half of 2022.
Bruck's second paper machine, with a capacity of 265,000 tons of LWC magazine paper, will continue its production.
Like announced in June 2020, Norske Skog plans to to have a production capacity of 765,000 tons of recycled cardboard in Europe. To achieve this, it will convert Bruck's PM3 paper machine, and possibly also the PM1 of the Golbey paper mill, located in the Vosges region of France.
The two converted machines, which would require about 350 million euros to convert, are expected to generate annual earnings before interest, taxes, depreciation and amortization of about NOK 700-800 million (70-80 million euros) in 2025-2026, taking into account price trends for corrugated board and recycled fiber.
The final investment decision to convert the Golbey PM1 machine is expected in Q2 2021.
