Sodra Confirms Plans to Invest SEK 4 Billion to Expand Pulp Production at Varo Mill

Södra Cell Värö will increase its pulp production capacity from 425,000 tpy to 700,000 tpy.

Feb. 25, 2014 - Södra said that its Board of Directors has made the decision to invest SEK 4 billion (approx. USD 610 million) to implement a major expansion of the pulp mill in Värö, Sweden, which will increase its current production capacity of 425,000 tpy to 700,000 tpy of pulp.

According to Sodra, when completed, the expansion will make the mill one of the biggest in the world in terms of softwood sulphate pulp production.

"This expansion is a vital part of our strategy, and a must if we are to be able to develop our business. The paper pulp market is growing globally, and now it will be possible for us to continue to grow together with our customers," said Lars Idermark, CEO and Group President at Södra.

"The expansion at Södra Cell Värö is a measure which will reinforce our market position. We already supply high-quality pulp to a number of different customer segments, and we can now develop and underpin this. Our aim is to become the first choice for customers.

"As well as increasing pulp production, this investment means that the plant can be made even more energy efficient. Södra Cell Värö is already independent of fossil fuels during normal operation. Our supplies of green energy can be increased still further thanks to this investment," Idermark said.

If the environmental permit process goes according to plan, the expanded mill will be ready for commissioning in the third quarter of 2016, Sodra noted.

The project will create the equivalent of 400 full-time jobs over a period of ten years. In the long term, the investment will also create 20 or so new job opportunities at the mill and 220 job opportunities within surrounding businesses.

Christer Segersteen, Södra's Chairman, commented, "This is a major investment, and it will be of enormous significance to our members — both industrial and forest owners. This expansion will give us more efficient pulp production while also securing a long-term and profitable market for our members' raw timber products."

"With this decision, we are demonstrating our belief in the forests and the opportunities we perceive for our products. We have a renewable and growing raw material in the forests of our members, and a modern and efficient industry," Segersteen added.

Sodra, with headquarters in Vaxjo, Sweden, produces market pulp, wood products and biofuels. The company operates three pulp mills, all in Sweden, with a total capacity of 1.6 million tonnes/year. Sodra produces both softwood and hardwood pulp — 90% softwood and 10% hardwood. To learn more, please visit: www.sodra.com.

SOURCE: Södra