Lecta plans to convert the PM 8 at its Condat mill from fine paper to label paper. The French state will support the project with €33m in subsidies.
The future of Lecta's Condat fine paper mill in France appears to be secured. The Spanish company will get financial assistance from the French government to rebuild PM 8 and bring the site back on track. According to a press release from the French Ministry for the Economy and Finance, Lecta has already entrusted engineering company Allimand with the rebuild.
The French region of Nouvelle-Aquitaine, where the paper mill is located, announced that it would provide subsidies of €19m. It is reportedly the largest amount that the region has ever committed to a company.
The French government will support Lecta with another €14m. According to the ministry, Lecta is currently planning restructuring measures which will cost a total of €36m at Condat.
Lecta is planning to rebuild fine paper machine PM 8, which has stood idle since last April, to produce label paper in the future. Furthermore, a new boiler is to be installed, which would significantly cut the high energy costs that according to Lecta threaten the mill's survival. The new boiler will also reduce CO2 emissions by 30,000 tpy, the ministry adds.
Conversion project averts eventual closure
All the parties involved are convinced that these measures will help make the site competitive again. The Condat mill has been struggling with declining demand for fine paper and financial difficulties for some time now. "An eventual closure of the mill, which was seriously considered for a while, would have meant a disaster with dramatic consequences," the region of Nouvelle-Aquitaine commented.
Lecta had long announced plans to rebuild PM 8. The project could initially not be realised because the company could not cough up the necessary funds. The company had applied for EU aid of up to €35m in the form of energy contribution subsidies, pointing out that it relied on financial assistance because of high energy costs in France. After the EU raised objections to financial support for Condat, Lecta appealed at the national level for assistance.
PM 8 produces woodfree coated paper and has been idle since the end of April 2019 because of languishing demand on fine paper markets. The Condat mill has a second machine for woodfree coated paper, which is running. The two machines have a combined capacity of 430,000 tpy.
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