More paper surcharges, mill halts production due to energy crisis

Jo Francis
Friday, March 11, 2022

Paper makers are implementing a further swathe of surcharges and at least one continental mill has been temporarily shut down after spiralling energy costs made its operation uneconomical.

Norske Skog Bruck: operation is unaffordable in current energy environment
Norske Skog Bruck: operation is unaffordable in current energy environment

Paper industry sources said that UPM, where strike action in Finland has now reached 70 days, is bringing in a fresh surcharge of £145/tonne from 16 March. 

One merchant said that Lecta has also announced a £125/tonne surcharge on top of other increases, while a supplier of specialist papers is said to be mulling a €200 or €300 (£168-£252) uplift.

One paper merchant said: “We are literally being thrown these crazy surcharges on what feels like a daily basis.”

Meanwhile, Norske Skog has taken drastic action at its Bruck mill in Austria. 

Bruck makes newsprint and LWC magazine paper. PM3 makes newsprint and has annual capacity of 122,000tpa, while PM4 makes LWC with capacity of 260,000tpa. 

Sven Ombudstvedt, president and CEO of the Norway-headquartered group, commented: “Although we have secured parts of the mill’s energy supply in March, the energy prices we presently experience make operations at Bruck unsustainable.”

Temporary downtime has been initiated “due to unaffordability of operations in the current energy environment”.

A new boiler is scheduled for start-up in April at the mill, and is expected to help to alleviate the situation by reducing the mill’s gas consumption and improve its energy supply. 

According to the OECD, Austria sources most of its natural gas supply from Russia. 

Norske Skog said the boiler project and the packaging conversion project at Bruck mill would continue as planned.

There is also speculation that other continental mills could follow suit action unless sufficiently large surcharges can be brought in to compensate for spiralling energy costs.

One despairing print boss told Printweek: “The pandemic was a walk in the park compared to all of this.”

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