Production restarts as Scheufelen secures investment

By Richard Stuart-Turner, Thursday 05 July 2018

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German paper mill Scheufelen has restarted production at its Lenningen base after securing “a strong partnership of investors”.

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Grasspaper and Phoenolux will continue to be produced at Scheufelen's Lenningen mill

Papierfabrik Scheufelen filed for insolvency at the end of January. After five months of “intense efforts” the company secured investment from Berlin-based Green Growth Fund 2/Wermuth Asset Management, Hamburg-based Nordia Invest and Scheufelen Equity Partners and relaunched on Monday (2 July) as Scheufelen GmbH.

“Even though production had to be stopped in April 2018, we never gave up hope or stopped our efforts to find a solution for Scheufelen to survive,” said insolvency administrator Tibor Braun.

The company said the move means the production of its grasspaper product will be able to continue. Made from grass fibre and pulp, grasspaper is a sustainable and cost-effective fresh fibre paper that is said to provide “massive savings” on water, chemical and energy requirements in fibre production.

Compared to recycled papers, the product avoids issues with consumer protection standards stemming from mineral oil migration from recycled paper fibres, Scheufelen said.

Grass fibre also regrows quickly and can therefore compensate for carbon dioxide emissions from its harvesting and production process almost immediately, the company added.

“Big international brands, smaller clients, but also many end consumers continued to show their huge interest in our product notwithstanding the difficult position Scheufelen found itself in over the last few months,” said Stefan Radlmayr, chief executive of Scheufelen in both its previous guise and the new set up.

Wermuth Asset Management technology and growth partner Claas Helmke said: “Sustainability is the driving force for innovation. Our investment targets are ‘best-in-class’ energy and resource-efficient companies.

“With their innovative paper from grass fibres Scheufelen makes a real difference economically, environmentally, and socially. The company matches perfectly the Green Growth Fund 2 approach of high profitability and fast growth. Its products have a significantly positive impact on the environment.”

Scheufelen’s premium paper products, including the high white packaging board Phoenolux, will also continue to be produced, but standard woodfree graphical papers – which Scheufelen attributes as the main reason for its insolvency – will no longer be manufactured by the business.

Woodfree coated paper grade Heaven 42, which Scheufelen used to manufacture, will now be produced by Feldmuehle Uetersen, which last month confirmed it had been sold following its own insolvency procedure. The German mill was commissioned by Igepa Group, which has recently secured the brand and distribution rights to Heaven 42.

In 2017 Scheufelen had 340 staff, a number which had already been reduced to 264 by the time production was stopped in April. Employees remaining at this point were “temporarily released” and received unemployment benefits in April. The relaunched business has opened with 100 staff.

Scheufelen said it was supported by the German federal agency for employment and the industry union Mining, Chemicals and Energy (IGBCE) during its insolvency procedure.

The agency helped to establish a transfer company, Refugio, which offers the remaining staff who could not continue with Scheufelen opportunities to retrain and to use its network for quick relocation. At least 100 Refugio employees will have a job for five months and will avoid unemployment during this time, Scheufelen said.

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