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Iggesund invests in organic growth

Iggesund invests in organic growth
The board of the Holmen Group, which includes Iggesund Paperboard, decided to give the green light for investments totalling EUR 60 million in Iggesund's mills at Iggesund, Sweden and Workington, England.

At Iggesund the investments will eliminate bottlenecks in pulp production so it can be increased from the current 370,000 tonnes to 420,000 tonnes. The target for the board mill is to increase the capacity by 10 per cent without investments.

"After we brought the new recovery boiler on line and developed our purification systems for both air and water, the mill now has unused potential, in both the pulp and board mill, which we can activate," comments Olov Winblad von Walter, Director of Iggesund Mill. "This is exciting because we are taking yet another step towards being one of the world’s leaders in mill technology with the lowest environmental impact. This move also further reinforces our competitiveness in the form of lower variable costs."

The investment in Workington will increase the mill's paperboard production capacity from the current 200,000 tonnes to 220,000 tonnes. This investment will also make the mill a leader in folding box board technology thanks to a rebuild of the paperboard machine's press section which will increase product quality. The rebuild will be completed by June 2016.

"We are experiencing strong demand for our improved Incada, not least because European converters regard it as the paperboard with the best runnability for applications involving mass-market consumer products," comments Ulf Löfgren, Managing Director of Iggesund’s mill at Workington. "In that situation of course it is positive that we can increase our capacity so more people can benefit from Incada's advantages."

"We see no difficulty in increasing Incada’s presence in Europe,” adds Arvid Sundblad, Vice President Sales and Marketing at Iggesund. "Our market share has been limited by our capacity. The planned capacity increase combined with Incada's recognised quality and our service gives us a excellent position."

Over a five-year period Iggesund Paperboard has invested strongly in strengthening its competitiveness via lower energy costs, whilst simultaneously minimising its use of fossil fuels. A total of EUR 361 million has been used for this purpose in both Workington and Iggesund. The investments announced now are more focused on increasing production.

"We have reduced our environmental impact and also taken control of our energy costs," Sundblad concludes. "We are well equipped to face tougher competition in the paperboard market but above all with regard to other types of packaging material. Our strategy is organic growth and for Workington, this is the first step in that direction. The announced investments will give us an excellent market position in terms of both product quality and capacity."

Iggesund Paperboard is part of the Swedish forest industry group Holmen, one of the world's 100 most sustainable companies listed on the United Nations Global Compact Index. Iggesund’s turnover is just over €500 million and its flagship product Invercote is sold in more than 100 countries. The company has two brand families, Invercote and Incada, both positioned at the high end of their respective segments. Since 2010 Iggesund has invested more than €380 million to increase its energy efficiency and reduce the fossil emissions from its production.

Iggesund and the Holmen Group report all their fossil carbon emissions to the Carbon Disclosure Project. The environmental data form an integral part of an annual report that complies with the Global Reporting Initiative's highest level of sustainability reporting. Iggesund was founded as an iron mill in 1685, but has been making paperboard for more than 50 years. The two mills, in northern Sweden and northern England employ 1500 people.