Norske Skog, a leading producer of publication paper, has announced plans to diversify its operations by entering the bleached chemi-thermomechanical pulp (BCTMP) market.
The company will initiate a major study to establish a BCTMP production line at its Saugbrugs plant in Halden, Norway, with a potential start-up in the first half of 2027.
The new BCTMP line will produce approximately 300,000 tons of pulp annually, primarily targeting the growing packaging market. Part of the investment will be covered by an insurance settlement of NOK 615 million from damages caused by a rockslide at the Saugbrugs plant in April 2023.
The net investment for the BCTMP production is estimated to range between NOK 1.5 to 2 billion (EUR 140-180 million), with an expected return on investment of over 20%. Construction is expected to last for two years, starting in the second half of 2025, with full utilization planned for the first half of 2028.
"This will be the first significant investment at Saugbrugs outside of publication paper in modern times," said Norske Skog's CEO Geir Drangsland. "The BCTMP production will be based on fresh fiber, and the Saugbrugs mill already has access to adequate energy capacity and existing infrastructure, reducing the total investment by approximately 50% compared to a greenfield investment."
The BCTMP production represents the latest initiative in enhancing the circular and industrial ecosystems at the Saugbrugs mill. Norske Skog aims to diversify its operations and continue its transformation into a growing and high-margin business through promising energy and bio-product development projects, securing jobs and ensuring the long-term viability of the Saugbrugs mill.
“It is gratifying for equipment suppliers, lenders, wood and other raw materials suppliers, shareholders, and customers that we are investing in and establishing a plant for bleached chemi-thermomechanical pulp at Saugbrugs. But those who have the most reason to rejoice, are our employees at Saugbrugs. The new revenue streams from mechanical pulp, along with the production of SC paper at Saugbrugs, will make the factory more profitable and robust, ensuring job security,” concludes Norske Skog’s CEO Geir Drangsland.
About Norske Skog Saugbrugs
Norske Skog Saugbrugs has 400 employees including apprentices with a turnover of NOK 1.8 billion, and a production capacity of 200,000 tonnes of magazine paper with main markets in Europe and North America. Saugbrugs annually produces 2.7 million cubic meters of biogas. Norske Skog Saugbrugs has established the companies CEBINA and CEBICO to handle the new commercial segments within nanocellulose and bio composites.
About Norske Skog
Norske Skog is a leading producer of publication paper with strong market positions and customer relations in Europe and Australasia. The Norske Skog Group operates four mills in Europe, which produce publication paper, recycled packaging paper, energy and bioproducts. In addition, the Group operates one paper mill in Australia. Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of promising energy and bio product development projects. The Group has approximately 2 100 employees, is headquartered in Norway and listed on the Oslo Stock Exchange under the ticker NSKOG.
