Ence Pontevedra to resume pulp production next week


Spanish pulp and energy company Ence has announced to restart pulp production at the Pontevedra mill in the second week of November.

Ence Energía & Celulosa intends to start making pulp again in Pontevedra in the second week of November. Operations would resume gradually after a stoppage lasting three and a half months as soon as the necessary permits had been issued and maintenance and repair work on infrastructure in the river basin had been completed, the company said. In its latest financial report, Ence announced that a solution was being tested that allowed it to regenerate wastewater from the pulp mill and a neighbouring public wastewater treatment plant, thereby minimising water consumption from the Lerez River when its level was too low. Production is poised to reach normal operations in the second week of December.

Ence had halted operations at the mill, which can make 685,000 tpy of hardwood pulp, on 20 July after being ordered to do so by regional authorities following a lengthy period of dry weather in the region. Ence reported a 35.2 per cent year-on-year decrease in its third-quarter production to 171,533 t as a result. Pulp deliveries dived by 27 per cent compared with the third quarter of 2021 to reach 189,214 t.

The Supreme Court in Spain was supposed to rule on whether to extend the original concession contract for the piece of land where the Pontevedra pulp mill is located in the fourth quarter of this year. Ence has now said that the date for the vote on the first appeal against the National Court’s judgements, which annulled the concession for Pontevedra, had been delayed so that the court could vote and rule on similar appeals. The firm said that verdicts in these appeals would likely be issued in the months ahead. The ruling will determine how and whether the site will continue operations.

Strong quarterly earnings in spite of production stoppage

Higher pulp prices and more favourable currency effects have minimised the impact that the production stoppage in Pontevedra had on earnings in the third quarter of 2022 and offset the inflation in raw material costs, Ence announced. Operating profits soared from €3.8m in the third quarter of 2021 to €29.8m in the reporting period. The company generated consolidated net profits of €21.9m (Q3 2021: -3.1m) in the third quarter. Sales revenues jumped from €216.1m between July and September 2021 to €233.4m in the latest reporting period.

The operating result stood at €96.9m in the first nine months of this year, compared to a loss of €172.8m in the same period last year. The first nine months ended with net profits of €68.8m (-198m). Nine-month sales climbed from €588.5m to €787.1m.

The Pulp division encountered a slight downturn in third-quarter revenues to €173.8m (183.9m). Operating profits improved from €15.9m to €27.5m, and net profits soared from €7.8m to €23.6m.

Global demand for pulp had shown robust growth in the first eight months of the year, the financial report added. Demand for pulp edged 2.8 per cent or 1.2 million t higher in the period. All markets sustained growth except for China, where demand contracted by 2.8 per cent or 400,000 t in a year-on-year comparison due to logistical and Covid-related restrictions.

In Europe, demand for pulp increased by 5.1 per cent or 600,000 t. At the same time, pulp supply was curtailed, especially by logistical restrictions, disrupted wood exports from Russia to northern Europe and delays in commissioning new capacity.

Mounting demand, combined with production stoppages and increases in production and transport costs, boosted bleached hardwood kraft pulp (BHKP) list prices again in the third quarter to $1,380/t in Europe and to more than $860/t (net price) in China.

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