Norway-based newsprint and magazine paper manufacturer Norske Skog has announced that it intends to enter the bleached chemical-thermomechanical pulp (BCTMP) market to meet the demand for packaging products.

The new BCTMP line will produce approximately 300,000 tons of competitive pulp and will be based on fresh fibre.

Production will begin at Norske Skog’s mill in Saugbrugs, Norway. A rockslide at the location in April 2023 caused heavy damage to machinery and released available thermo-mechanical pulp capacity.

The net investment in BCTMP production will range between Nkr1.5bn and Nkr2bn (€140 – €180m). Part of the investment will be covered by the portion of the insurance settlement for the rockslide that has not yet been paid out by the insurance company – Nkr615m – for the development of new activities at the plant.

Norske Skog Saugbrugs’ investment will exploit existing machinery, equipment and infrastructure, reducing the total investment by 50% compared to a greenfield investment case.

There will be minor adjustments to the site’s existing infrastructure such as in and outbound distribution systems, raw material processing machinery and equipment, in addition to the waste-water treatment plant.

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Saugbrugs will apply to the appropriate authority for electrical grid access and all necessary emission permits, building construction permits and other regulatory necessities.

Final investment decisions are planned for the first half of 2025. The start of BCTMP production is planned for the first half of 2027, and full utilisation is expected in the first half of 2028.

Norske Skog CEO Geir Drangsland commented: “We expect to achieve a return on net investment of more than 20%. This will be the first significant investment at Saugbrugs outside of publication paper in modern times.”

The Norske Skog Group operates four mills in Europe, which produce publication paper, recycled packaging paper, energy and bioproducts.