Stora Enso is evaluating options to convert its entire one million-plus tonnes of Lumi coated woodfree paper production to packaging board instead.
The paper and wood products group has announced a feasibility study for its Oulu Mill in Finland, which runs two paper machines and has an annual capacity of 1.08m tonnes, alongside a chemical softwood pulp plant with a capacity of 360,000 tonnes.
The mill currently makes various grades of fine paper, including LumiArt and Silk sheets, LumiForte reels and sheets, and the LumiPress Art and Silk range. It is Stora Enso’s only coated woodfree fine paper mill, so if the scheme goes ahead it would mean the group would exit that part of the market.
The project would require a major investment of around €700m (£619m) to set up a new chemi-thermomechanical pulp (CTMP) plant at the site and create a brown-based cartonboard line able to produce 450,000tpa and a kraftliner line with a capacity of 400,000tpa.
A Stora Enso spokeswoman told PrintWeek: “The feasibility study will be completed by the end of 2018, the environmental impact assessment will take at least six months from now, even longer. Paper production will continue at least until early 2020. We are fully committed to serve our paper customers.
“At this stage it is too early to evaluate possible impacts on the Lumi business – the feasibility study is still ongoing and continuing current paper production is the other option that is being evaluated in the feasibility study,” she added.
PrintWeek understands that LumiPaper has moved to reassure UK customers that, should the project get the go-ahead, paper production would continue for at least a year after the study has been completed.
The firm sells direct and via merchants Premier Paper and Ovendens in the UK. LumiPaper’s sheeting plants including the UK operation at Mendlesham in Suffolk are subsidiaries of Oulu Mill.
One merchanting source said: “If it goes ahead it will have a massive impact on the UK and European market. That’s a lot of coated paper to be sourced elsewhere. It would be a major game-changer, and merchants would probably need six-or-seven months to clear stocks and find another supplier.”
However, one paper industry expert pointed out that Stora Enso had announced feasibility studies in the past that had not come to fruition.
“Whichever way you look at it, it’s a ballsy move. It’s not every day that you take a million tonnes mill and think about changing its quality. And this would be a big investment for the Stora Enso board to approve,” he noted.
The announcement comes amid a squeeze on supplies of a number of paper grades, in part due to conversion projects like the one being considered for Oulu.