After committing one billion euros for the expected purchase of De Jong Packaging, the company is investing another billion to convert a remaining idle paper machine at the group’s Oulu site in Finland into a high-volume consumer board production line
“This investment represents a step change in the European market and will develop our Oulu unit into a mega site,” says Hannu Kasurinen, EVP and Head of Stora Enso‘s Packaging Materials division.
The converted paper machine will have a capacity of 750,000 tpy and produce folding boxboard and coated unbleached kraft board. The mill will target end-use segments such as food and beverage packaging (frozen and chilled, dry and fast food), mainly in Europe and North America. Board production is estimated to start in early 2025.
The converted board machine is said to consume approximately one million m³ of pulpwood and will reduce the group’s market pulp position by 250,000 tpy. The €1 billion investment during 2022–2025 will create some 300 new jobs.
The video shows the first PM at Oulu Mill, converted to the production of a kraftliner (opening May 2021). The cost of the upgrade amounted to 350 million euros:
“Building on the successful first conversion in our site in Oulu, Finland in 2021, we will continue investing in high-quality consumer board by converting the second paper machine at this site,” says Annica Bresky, Stora Enso’s President and CEO. “By utilising existing infrastructure, we will significantly reduce the risks and the investment costs compared to a green field expansion.
“This is our third paper-to-packaging machine conversion since 2016 and we have experienced teams in place to drive the project to create a cost leading mega-site for renewable packaging. At full production, we expect annual sales of 800 million euros, serving food end-use markets in Europe and North America.
“During the third quarter of 2022, we continued to stay vigilant in an unprecedented and volatile environment. Inflationary cost pressures intensify, but I am pleased that we were able to mitigate and deliver strong results.
“Our sales increased by 15% to 2,963 million euros, the highest third quarter sales since 2007, excluding Paper the increase was 17%. We delivered a 29% increase in operational EBIT to 527 million euros, the highest quarterly result since the early 2000s at an operational EBIT margin of nearly 18%.
“Looking ahead, we see the first signs of potential macroeconomic slow-down that could eventually also impact our business. I am however confident in our ability to be proactive and to adapt.
“Stora Enso is stronger and more resilient than before due to restructuring efforts and strategic choices made over the past few years: to exit paper, reduce our debt and focus investments on our growth businesses.”