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Go-ahead for Norske Skog's conversion project in Golbey


Norske Skog can proceed with its plan to produce
recycled containerboard at the Golbey mill
23 Jun 2021 − 

A new player will soon enter the recycled containerboard market. Norske Skog has now definitively decided to convert one newsprint machine in Golbey, adding 550,000 tpy of containboard capacity to the market.

The Board of Directors of Norske Skog has given the go-ahead for the major conversion project at the Golbey mill in France. The company has made the final investment decision to convert one of the two newsprint machines at the site to recycled corrugated case material. The PM 1 can currently make up to 235,000 tpy of newsprint and will be rebuilt to make lightweight containerboard with a capacity of 550,000 tpy. The converted PM is scheduled to start up in the fourth quarter of 2023, with full capacity of lightweight testliner and fluting expected to be reached in the second half of 2026.

Norske Skog puts the investment sum for the conversion at €250m. Around €175m of this sum will reportedly be financed through a syndication of financing facilities, which is yet to be finalised.

Norkse Skog runs a second newsprint machine in Golbey with a capacity of 330,000 tpy, which will continue making newsprint in the future. However, the company plans to change the furnish from 75 per cent to 100 per cent deinked pulp (DIP), meaning that production at the site will be fully based on recycled fibres in the future.

Norske Skog has also made a final decision concerning its green energy project. Green Valley Energie (GVE), a joint venture of Norske Skog Golbey, Pearl Infrastructure Capital and Veolia Industries Global Solutions, will construct a biomass power plant adjacent to the Golbey industrial site, the company reports. The plant will provide steam to be used for both containerboard and newsprint production.

A new player with 760,000 tpy of containerboard capacity

Norske Skog is also planning a second containerboard project, which has recently been approved by the Board of Directors. At the Bruck mill in Austria, the PM 3 is to be converted from 125,000 tpy of newsprint to 210,000 tpy of recycled corrugated case material.

With these two projects, Norske Skog will make its entry into the recycled containerboard market, introducing a total of 760,000 tpy of capacity in Europe. "The packaging business will become an important and strong part of Norske Skog's business going forward," said company CEO Sven Ombudstvedt, adding that the continued rise of online shopping has created a significant need for renewable packaging solutions.

A total of €350m will be invested in the two projects. According to Norske Skog, the converted machines are expected to generate an annual Ebitda of NOK700-800m in 2025/2026, based on historical trend prices for containerboard and recycled fibre.

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