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Stora Enso is investing around €350 million to convert its Oulu paper mill in Finland to packaging production.

The investment includes converting paper machine 7 into virgin-fiber-based kraftliner production, and the closure of paper machine 6 and sheeting plant. Production on the converted machine is estimated to start by the end of 2020.

“The conversion this mill will enable Stora Enso to improve its position in the growing packaging business and take a major step forward in its transformation. We have proven competence in running large conversion projects successfully, as we have already converted one paper machine at Varkaus Mill to produce kraftliner,” said Stora Enso’s CEO Karl-Henrik Sundström.

The typical end uses for kraftliner are in packaging segments that require high strength, quality and purity, such as food, fruit and vegetables as well as heavy duty packaging. Production will target global export markets.

Following the conversion, the mill’s EBITDA margin is expected to improve by 15-20%, once the kraftliner machine is running at full capacity approximately four years after start-up. It will also employ 180 people.

Oulu Mill’s current capacity is 1,080,000 tonnes of woodfree coated papers annually.