Pre-engineering phase completed

Metsä Board changes Kaskinen plans; will invest in existing mills

Metsä Board has decided not to proceed with the Kaskinen investment
Metsä Board has decided not to proceed with the Kaskinen investment

Metsä Board has decided not to invest in a new folding boxboard mill in Kaskinen, Finland following the completion of a pre-engineering phase, and the business now plans to invest in its existing mills.

The potential investment was originally revealed by the business, part of Metsä Group, in September 2022. The pre-engineering phase included technical design, design of infrastructure and “logistics solutions”, and tendering for the main equipment, as well as financial analysis of the project. The pre-engineering also included an environmental impact assessment and an application for an environmental permit.

Following the completion of the pre-engineering, the company said it has made the decision not to proceed with the Kaskinen investment.

It stated: “The total cost was significantly higher than originally estimated, meaning that the targets for payback time and return on capital employed would not have been met.

“Metsä Board will write down the costs of the pre-engineering, in total approximately €8m [£6.84m], treated as an investment, as an item affecting comparability in the January-March 2024’s operating result.”

The company said it has decided to launch programmes for new product options, as well as growth and development investments, at its existing mills to implement its strategy to grow in fibre-based packaging materials and renew its industrial operations.

Metsä Board said the programmes will support its target of fossil-free production by the end of 2030. In addition, the company will continue to develop packaging that reduces the use of plastics.

At the Husum integrated mill in Sweden, Metsä Board will start a programme to introduce new products on the current white kraftliner production line (BM2).

It said the aim is to find “new innovative solutions for the growing food and food service packaging segment”. The company continues to plan the renewal of the fibre line at the Husum pulp mill.

Metsä Board said it is also launching a major investment programme to modernise the Simpele board mill, which will be implemented in phases. The programme includes renewals in the mechanical pulp production, in the pre-drying and coating section of the paperboard machine, as well as in the finishing area. The programme also includes a new power plant.

As a result, it said the quality, performance, and cost competitiveness of the folding boxboard will improve, and the production capacity will increase.

Meanwhile, at the Kyro board mill an investment programme will be launched to improve the performance of the current barrier board and expand its end-use areas.

The total estimated investment cost of the Simpele and Kyro paperboard mills is €250m over the next 10 years.