UPM in negotiations for sale of Stracel paper mill to VPK and Klingele

The future seems a little brighter for the Stracel paper mill in Strasbourg, France. UPM has entered into exclusive negotiations with VPK Packaging and Klingele Papierwerke for the sale of assets and part of the land at the UPM Stracel site. Through a newly established joint venture company VPK and Klingele made a formal offer to acquire the mill from UPM. This was communicated by the three companies on 3 July.

VPK and Klingele plan to convert the Stracel mill, that currently has a production capacity of 280,000 tpy of LWC magazine paper, into a packaging paper plant. After conversion, the paper machine is to produce about 300,000 tpy of recycled fluting and testliner of grammages between 80 and 130 g/m². According to the two companies, the project requires an investment of more than €100m on top of the purchase price that was not disclosed.

Now, the relevant consultation processes need to be conducted with employee representatives. According to UPM, the process is to be launched shortly and is expected to be completed during the second half of 2012. If, after that, UPM accepts the offer from the joint venture company, the 12-month conversion project could start right away, Klingele and VPK reported. Currently, the mill is scheduled to be restarted in the second half of 2013. Part of the Stracel real estate is to remain in possesion of UPM for potential future biofuel production.

For the employees of the mill, the negotiations are good news as the takeover might secure numerous jobs. However, a spokesman for the Filpac CGT union said to EUWID that the union did not favour the plans, as too many jobs would be lost. Currently, UPM Stracel employs 250 people. The converted mill would offer 140 jobs.

On August 31, 2011 UPM announced the completion of a comprehensive review of the long term competitiveness of its publication paper mills. As a part of this review UPM announced its intention to sell the Stracel mill unless a buyer was found until August 2012. However, the group has stipulated that the buyer may not manufacture publication papers. Regional efforts to safeguard production regardless of the type of paper have since been made in Alsace in order to secure these jobs.

⇒ Find this article in its entirety and any associated background information in EUWID Pulp and Paper no. 27.

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