Paper manufacturer Norske Skog is investing €350m (AUD 574) in converting two newsprint papermaking lines, in Austria and France, to containerboard lines.
The conversions will introduce 765,000 tonnes of containerboard capacity, bringing the company into the packaging market for the first time.
The company expects the conversions to take 18 months, starting in the second half of 2021.
Following the conversions, Norske Skog said the mills would have access to green energy and will have reduced their carbon footprints.
The company will focus on producing unbleached testliner, which it plans to manufacture in weights from 90-200gsm, and with fluting in 75-170gsm, all made from 100 per cent recovered fibre. It describes the move into packaging as “a milestone”.
Norske Skog said recycled fibre would be used to make containerboard. The company is planning to use green steam from the boilers sucking steam from the paper lines to help power the plant.
“The conversions at the... mills are profitable investments that will enable Norske Skog to establish a strong presence in the growing packaging market,” Sven Ombudstvedt, the company’s CEO, said. “In addition, it represents a major step in our continued effort to direct Norske Skog into a growing business.”
The $2bn company has built its business on publication papers, but it says the move is part of its shift into growing and high-margin sectors. Conversion of the lines is slated to begin next year and will be completed by 2023. The company says it will “continue to be a reliable producer of publication papers”.
The converted mills will continue to run an LWC line along with the converted containerboard lines. In addition to newsprint and magazine papers the company produces papers for catalogue, book, and directory printing.
Norske Skog's presence in Australasia includes a head office in Sydney; a paper mill in Tasmania; a fibre mill in Kawerau, New Zealand; and a wood pellet fuel production facility in Taupo, New Zealand.