UPM Stracel is sold to Blue Paper SAS and greatly updated

The first question that came to my mind when reading this article was: why didn’t UPM do this? Obviously, Blue Paper SAS (Klingele and VPK) think there can be made much money with these investments.  To quote a large part of the press release:

With a trimmed width of 8.5 metres, UPM Stracel’s paper machine previously produced LWC paper at a speed of 1,600 m/min. From September, the paper machine will initially have an annual capacity of some 277,000 tons of fluting paper and testliner ranging from 70 to 130 g/m2 . Production capacity is set to increase to over 400,000 tons per year in due course.

The investment to bring the Strasbourg paper plant into line with the latest technical, economic and environmental standards will amount to more than €100 million. With Metso and Kadant acting as main suppliers for the paper machine and stock preparation respectively, the new owners have secured the services of experienced partners to guarantee that their ambitious project is completed on schedule.

The conversion work covers a range of measures that includes a new stock preparation based on waste paper, a new headbox, adaptation of the gap former, conversion of the press and pre-dryer section, a new film press, a new after drying section, improvements to the winders, a new anaerobic waste water treatment and the introduction of combined heat and power generation. Further significant investments will be made in the areas of automation, process system, paper reel handling, technical and commercial computer systems, starch ­preparation as well as extensive civil works.

The project will create 130 jobs, which Blue Paper plans to offer to the very experienced and highly qualified former UPM Stracel employees.

Why was Stracel closed down initially? From Jussi Pesonen:

“The paper industry faces severe challenges due to high raw material, energy and logistics costs, and considerable overcapacity. The profitability of our paper business is clearly below the level required to run long-term sustainable operations. The planned restructuring would further strengthen the cost competitiveness of UPM’s paper operations and reduce the future need for major maintenance investments”, says UPM’s President and CEO Jussi Pesonen.

Perhaps this new future for Stracel is just outside what UPM thinks of its core competences – it doesn’t have paperboard mills and the packaging paper it makes is for other uses (envelopes, cookie packaging…). Still it could be asked – and I don’t know an answer because I don’t know about the technology – wouldn’t it have been possible to convert Stracel to a mill that produces stuff that UPM sells?

 

In any case I am happy that the former UPM employees found new jobs – although not all of them will. The net result is a job loss for that facility of 120 jobs instead of 250.

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