Finland-based paper and board producer Stora Enso is investing about 1 billion euros ($987.6 million) to convert the remaining idle paper machine at its Oulu site in Finland into a high-volume consumer board production line. The investment supports the company’s growth strategy in renewable packaging by providing new volume for growing packaging segments. Production on the converted machine is estimated to start in early 2025.
Following the first machine conversion at the Oulu site in 2021 from paper to kraft liner, the idle paper line will be converted into a highly flexible consumer board line for folding box board and coated unbleached kraft. The total annual capacity will be 750,000 metric tons of consumer board. The target end-use segments are food and beverage packaging, especially cold, dry and fast food, mainly in Europe and North America.
“Renewable packaging continues to be our largest strategic growth area,” says Stora Enso’s President and CEO Annica Bresky. “It’s also a market that is now, for the first time, growing faster than plastics-based alternatives. Through this conversion we can build on existing assets for quick and cost-effective time-to-market compared [with] other investment alternatives. This puts us in a strong position to drive revenue growth and build market share.”
Stora Enso says the total investment will be about 1 billion euros through 2025. At total capacity, it is expected to get an operational return on operating capital of 20 percent. Annual sales are expected to be about 800 million euros, meeting the profitability target of the company’s packaging materials division.
“This investment represents a step change in the European market and will develop our Oulu unit into a mega site, improving profitability and competitiveness for both our consumer board and containerboard offerings,” says Hannu Kasurinen, executive vice president and head of the company’s packaging materials division. “The converted line will be the most cost-competitive FBB machine in Europe, also enabling us to optimize production at other sites to unlock further growth.”
The company says the investment is aligned with its sustainability commitments. It will support circularity by further enhancing the recycling performance of the Packaging Materials division’s product portfolio. The Oulu site’s total Scopes 1 and 2 greenhouse gas emissions will remain low due to the first conversion in 2021.
The investment will create about 300 new jobs at the Oulu site and support functions and an additional 1,500 indirect employment opportunities overall. The wood consumption of the new line will be about one million cubic meters of pulp wood. After the investment, the company’s market pulp position will decrease by 250,000 metric tons annually.