Wednesday, August 27, 2014 11:00 am

SWEDEN -- The BillerudKorsnäs Board of Directors has approved an investment of approximately SEK 900 million ($129 million) in the Frövi and Rockhammar mills in Sweden. The investment targets increased capacity and improved quality of the output cartonboard and liquid packaging board, the company said.

"We have set an ambitious growth agenda for BillerudKorsnäs. For the business area Consumer Board the strategy is profitable volume growth. This investment is an important part of realising that strategy," said Per Lindberg, CEO of BillerudKorsnäs.

The investment includes a rebuild of the board machine at the Frövi mill as well as a capacity upgrade of the Rockhammar pulp mill. After completion in 2017, the investment will bring the Frövi mill to an output of 550,000 t/a of high quality cartonboard and liquid packaging board and the Rockhammar mill up to 150,000 t/a of CTMP. After the investment, BillerudKorsnäs will operate the largest machine for production of cartonboard and liquid packaging board integrated to chemical pulp in the world.

"The demand for BillerudKorsnäs cartonboard and liquid packaging board is increasing. Through this investment we will maintain and strengthen our competitiveness and deliver on the increasing demands on our products and services, and thereby achieve sustainable growth within our business area Consumer Board," said Ulf Eliasson, Senior Vice President Consumer Board.

BillerudKorsnäs long term estimate for capital expenditure is for capex to be in line with depreciation i.e. approximately SEK 1400 million per year. The Frövi and Rockhammar investments imply that BillerudKorsnäs will exceed previous guidance for capex with approximately SEK 150 million ($21.5 million) for 2014 and that the capex level will be above the depreciations also for the coming two years.