Investments and capital expenditure
Additions to fixed and biological assets including interest and internal costs capitalised in 2017 totalled EUR 640 (729) million. The total amount includes additions in biological assets of EUR 80 (91) million.
The ramp-up of Beihai Mill continues to proceed ahead of plan. The consumer board machine is expected to reach full production during the first half of 2018, and the operational EBITDA break-even was reached in Q4/2017. The polyethylene (PE) coating investment at Beihai Mill was completed during Q4/2017. In January 2017, Stora Enso initiated a process with the Government of Guangxi with the aim to remove the authorisation for the hardwood chemical pulp mill from its investment permit.
The EUR 70 million investment in a new PE extrusion coating plant and an automated roll warehouse (ARW) at Imatra Mills in Finland was completed during Q4/2017. The investment enhances Stora Enso’s ability to meet increasing customer demand for food service board and liquid packaging board.
At Ala Sawmill in Sweden, operations started at the new boiler and pellet production line in Q1/2017 after the EUR 16 million investment. At Honkalahti Sawmill in Finland, the EUR 10 million investment in the new boiler was completed and operations started in Q3/2017.
Investment in a Xylose Demo Plant in Raceland, Louisiana, USA proceeded to the commissioning phase and the plant is estimated to start commercial deliveries in 2018.
The EUR 19 million investment for the consolidation of the manufacturing of corrugated packaging in Lahti, Finland, is expected to be finalised by the end of Q1/ 2018.
The EUR 27 million investment in Skutskär pulp mill in Sweden to increase its fluff capacity to meet the growing demand in the hygiene market is proceeding as planned and is expected to be completed during Q2/2018.
In January 2017, Stora Enso announced an investment of EUR 9 million in its consumer board mills in Imatra and Ingerois, Finland, and Fors, Sweden, to continue the commercialisation of micro-fibrillated cellulose (MFC) and to accelerate product development. With the new investments, Stora Enso will accelerate the product development of new MFC applications, which will include barrier layers for grease and oxygen and biodegradable film as a replacement for aluminium in paperboard packaging.
In January 2017, Stora Enso announced an investment of EUR 12 million to build a new production line that will manufacture biocomposite granules at Hylte Mill in Sweden. Biocomposite granules enable the use of renewable wood to substitute a large portion of the fossil-based materials in products typically produced in plastics. Production is scheduled to begin during Q1/2018. The annual capacity will be approximately 15 000 tonnes per year.
In February 2017, Stora Enso announced a EUR 28 million investment million at its Heinola Fluting Mill in Finland to meet a growing customer demand globally. The investment improves quality and increases the production capacity of its AvantFlute SC product portfolio. The project is estimated to be completed in the Q2/2018. AvantFlute SC is semi-chemical fluting made from virgin fibre and was developed especially to endure demanding conditions. The production capacity of AvantFlute SC will increase by 15 000 tonnes once the investment is completed and fully implemented. The current annual production capacity at Heinola Fluting Mill is 300 000 tonnes of fluting.
In July, Stora Enso announced an investment of approximately EUR 45 million in a new production unit for cross laminated timber (CLT) in connection with its Gruvön Mill in Sweden. The investment will further enhance Stora Enso’s position as a global provider of high quality engineered wooden elements and as a market leader in CLT. The production is scheduled to begin during Q1/2019. The estimated yearly capacity of the production line will be approximately 100 000 m³ after the ramp-up.
In October, Stora Enso announced an investment of EUR 94 million to grow in renewable materials and to increase competitiveness in consumer board and biomaterials. EUR 52 million will be invested to increase the dissolving pulp production capacity at Enocell Mill and EUR 42 million to enhance the availability of the chemi-thermomechanical pulp (CTMP) at Imatra Mills. Both mills are located in Finland. Enocell Mill, which is part of the Biomaterials division, will be converted to focus entirely on production of dissolving pulp. The softwood pulp production will be gradually discontinued after the investment. The mill will have a total capacity of 430 000 tonnes of dissolving pulp annually, of which 185 000 tonnes will be hardwood and 245 000 tonnes softwood dissolving pulp. The investment is scheduled to be completed during Q2/2019. The investment at Imatra Mills, part of the Consumer Board division, includes a new CTMP drying and re-pulping plant, as well as extension of the pulp warehouse. This aims to enhance the availability of CTMP and to drive the commercialisation of micro-fibrillated cellulose (MFC). The project is scheduled to be completed in Q1/2019.