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Acquisitions and capital expenditure
Additions to fixed and biological assets including interest and internal costs capitalised in 2016 totalled EUR 729 (EUR 989) million. The total amount includes additions in biological assets, EUR 91 (EUR 77) million.
The group continued to further invest in strategic focus areas and transformation. The ramp-up of Beihai Mill is proceeding ahead of plan. The consumer board machine is expected to reach full production within 18‒24 months from the start-up in May 2016. The capital expenditure at Beihai Mill during 2016 totalled approximately EUR 199 (EUR 394) million, excluding forestry and the on-going EUR 31 million polyethylene (PE) coating investment.
The investment of EUR 43 million in a new line for wooden building components (LVL) at Varkaus Mill started operations in June and is ramping up as planned. Full production is expected in mid-2018. The estimated yearly capacity of the production line will be around 100 000 m3.
Investment in a Xylose Demo Plant in Raceland, Louisiana, USA is proceeding at commissioning phase and is estimated to start operations by the end of the second quarter of 2017. At Ala Sawmill in Sweden, the investment in the new boiler and pellet production is estimated to start during the first quarter of 2017. At Honkalahti Sawmill in Finland, the new boiler is estimated to be in operation during the third quarter of 2017.
In March, Stora Enso announced investment of EUR 16 million in a new chemical plant at the consumer board mill in Skoghall, Sweden, to further improve the environmental performance of the mill. In the Biomaterials division, Stora Enso announced an investment of EUR 16 million to improve the environmental performance by reducing sulphur emissions of its mill in Skutskär, Sweden. These investments are expected to be completed by the end of 2017.
In May Stora Enso announced a EUR 70 million investment in a new polyethylene (PE) extrusion coating plant and an automated roll warehouse (ARW) at Imatra mills in Finland. The investment will enhance Stora Enso’s ability to meet increasing customer demand for food service board and liquid packaging board. The investment is expected to be completed during the fourth quarter of 2017.
In June, Stora Enso announced an investment of approximately EUR 27 million in Skutskär pulp mill in Sweden to increase its fluff capacity to meet the growing demand in the hygiene market. The investment supports Stora Enso’s strategy of transforming into a customer-focused renewable materials growth company. The aim is to develop further the current market pulp business and to focus more on growth segments. The total fluff pulp capacity of the mill after the investment will amount to 415 000 tonnes. The investment is expected to be completed during the second quarter of 2018.
In September, Stora Enso announced plans to consolidate corrugated packaging production in Finland. Stora Enso’s corrugated packaging plant in Heinola will be closed permanently and packaging manufacturing transferred to the Lahti plant. Stora Enso will invest approximately EUR 19 million in new machinery and supporting infrastructure in Lahti, where the most important individual investment item is a new corrugator. The project is expected to be finalised by the end of the first quarter of 2018.