Holmen Group has announced a €60m (£46m) investment to boost production capacity at its subsidiary Iggesund Paperboard's mills in Workington, UK and Iggesund, Sweden.
The bulk of the investment (£28m) is targeted at eliminating bottlenecks in pulp production at the Iggesund mill in Sweden to increase capacity from 370,000 to 420,000 tonnes per annum.
"After we brought the new recovery boiler online and developed our purification systems for both air and water, the mill now has unused potential, in both the pulp and board mill, which we can activate," said Olov Winblad von Walter, director of the Iggesund mill.
The remaining £18m will be invested in a rebuild of the press section of Workington's paperboard machine, which manufactures Iggesund's Incada folding boxboard, increasing quality and boosting capacity 10% to 220,000 tonnes per annum.
Managing director of the Workington mill Ulf Löfgren said: "We are experiencing strong demand for our improved Incada, not least because European converters regard it as the paperboard with the best runnability for applications involving mass-market consumer products."
Arvid Sundblad, vice-president of sales and marketing at Iggesund, added that the firm's market share had been "limited by our capacity". "The planned capacity increase combined with Incada's recognised quality and our service gives us an excellent position," he said.
"Our strategy is organic growth and for Workington, this is the first step in that direction. The announced investments will give us an excellent market position in terms of both product quality and capacity."
The rebuild, which is scheduled to be completed by June 2016, will have no effect on headcount at the 40 staff mill.