Swedish pulp and paper manufacturer BillerudKorsnäs board has approved a SEK1.28bn ($157.2m) investment programme to enhance the company’s growth in kraft papers for packaging applications.

As part of the programme, the company will develop its Skärblacka production unit in Sweden between 2016 and early 2018.

BillerudKorsnäs president and CEO Per Lindberg said: "Packaging solutions based on renewable raw materials are parts of the solution to some of the challenges we face in society.

"In order to contribute to the sustainable future we believe in, we need to constantly develop ourselves and our assets."

"In order to contribute to the sustainable future we believe in, we need to constantly develop ourselves and our assets.

"This investment gives us a production platform for continued growth and increased efficiency within our business area."

The programme also includes relocating the BillerudKorsnäs machine-glazed (MG) paper machine in Tervasaari, Finland, to Skärblacka, as well as investing in surface treatment capacity on the existing paper machine 7 (PM7) in Sweden.

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Start-ups of the relocated machine and the rebuilding of PM7 are expected to be carried out during late 2017 and early 2018.

The Tervasaari machine will be fully integrated to produce pulp for the white MG paper market.

Skärblacka PM7’s surface treatment capacity will expand functionality for applications within the food, medical and release liner packaging sectors.

BillerudKorsnäs’s underlying investment level is currently around SEK1.3bn ($158m) per year.

With the latest programme, the level is expected to increase to around SEK1.42bn ($173m) this year, and around SEK1,900m ($233m) in both 2017 and 2018.

The investment in Skärblacka is expected to create more than 40 new jobs.