The company fears that the payback time at the mill would not be achievable due to high investment costs.
Metsä Board, a producer of fresh fibre paperboards, has announced it will not carry on with the planned investment in its Kaskinen folding boxboard mill in Finland. Offset Printing Paper Matt
This decision follows the completion of pre-engineering, which the company announced in September 2022.
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The pre-engineering phase of the project included technical design, infrastructure and logistics solutions, equipment tendering, and financial analysis.
It also included the site’s environmental impact assessment and permit application.
Metsä Board fears that the payback time and return on capital employed targets would not be achievable as the cost of the proposed investment was significantly higher than initial estimates.
The company plans to list the pre-engineering costs of approximately €8m ($8.64m) as an item affecting comparability in its operating result for January-March 2024.
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Instead of the Kaskinen investment, Metsä Board has initiated programmes to explore new product options and growth investments at its existing mills.
This decision aligns with its strategy to expand in fibre-based packaging materials and modernise its industrial operations.
Specifically, the company will commence a programme to introduce new products on its existing white kraftliner production line at the Husum integrated mill in Sweden.
The move is intended to address the growing food and foodservice packaging segment. Plans for renewing the fibre line at the Husum pulp mill are ongoing.
In addition, a significant investment programme is set to modernise the Simpele board mill, which will be carried out in stages.
This will include upgrades to mechanical pulp production and the paperboard machine’s predrying and coating section, as well as a new power plant.
The improvements are expected to enhance the quality, performance, and cost competitiveness of the company’s folding boxboard.
Metsä Board also announced an investment programme at its Kyro board mill to enhance the performance of its barrier board and broaden its applications.
The combined estimated investment for the Simpele and Kyro mills is €250m over the next ten years.
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