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Norske Skog to sell its stake in Brazilian newsprint mill

The Pisa newsprint mill in Brazil
Source: Norske Skog
09 Jan 2014 − 

Norske Skog will exit the South American paper market. The company said it would sell its remaining shares in the Pisa newsprint mill to Papeles Bio Bio.

Norske Skog has entered into an agreement to sell its remaining 49% stake in the Brazilian Pisa newsprint mill to Chilean company Papeles Bio Bio. The company put the transaction price at $37m. Norske Skog had already sold 51 % of the shares in the Pisa mill to the Chilean paper producer in June 2013 for $41.3m.

According to Norske Skog, the Pisa mill is one of four newsprint production sites in South America. It is located in Jaguariaíva in the Brazilian state of Paraná and has a capacity of 185,000 tpy. When explaining the planned divestment of the mill, Norske Skog's President and CEO Sven Ombudstvedt said the company aimed at having its core business in Europe and Australasia. Furthermore, the sale was also part of the company's strategy to improve its liquidity, he added.

Papeles Bio Bio is controlled by Group BO/Pathfinder, a consortium of Chilean investors. At its site in San Pedro de la Paz, the company produces newsprint as well as other printing paper such as telephone directory paper or paper for inserts and leaflets. It currently operates two machines, PM 1 and PM 2, with a combined capacity of 125,000 tpy. The San Pedro de la Paz site was formerly owned by Norske Skog (Norske Skog Bio Bio) before it was sold to Group BO in 2012 and renamed Papeles Bio Bio.

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