Metsä Group will put around €25m ($28.9m) into a new Muoto fibre packaging production line in Äänekoski, Finland, with operations due to begin in 2028.
The line will be built at the company’s mill site in Äänekoski, beside the existing Muoto demonstration plant.
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Metsä said it chose Äänekoski rather than Rauma, which had been the earlier plan, citing the site’s infrastructure, the existing line and overall investment costs.
The planned line is expected to have nominal capacity of more than 100 million units a year.
Engineering group Valmet will supply the production line.
Designed to serve as an alternative to plastic, Muoto is a fibre-based packaging material made from Metsä’s wood fibres.
The company said this gives the packaging a combination of rigidity, low weight and practical performance for uses such as serving and food packaging.
Separately, the work on its lignin product and carbon capture projects is continuing according to plan.
By contrast, the proposed Kuura textile fibre mill in Kemi, Finland, will not go-ahead following market changes.
Metsä said the project no longer has the basis to continue in its present form, though it is examining ways to use the expertise developed in textile fibres.
Innovation company Metsä Spring CEO Niklas von Weymarn said: “We’ve developed a competitive product and production concept for Muoto packaging that responds to the growing demand for fossil-free packaging solutions. Muoto supports Metsä’s ambition to develop new packaging innovations in collaboration with companies in the packaging value chain.
“Muoto products also meet the strict requirements of the EU’s recent Packaging and Packaging Waste Regulation. Legislation is expected to give a boost to the product’s chances of success.”
Last month, Metsä Board opened a design centre in Milan, Italy, focused on packaging development with customers.
