Food packaging demand spurs M-real plans to boost folding boxboard capacity

Safety and sustainability concerns from the food packaging sector are driving increased demand for virgin fibre folding boxboard, said M-real as it announced plans to increase it capacity for the material by 70,000 tons per annum (t/a).

The Finnish company unveiled proposals to invest €30m at two sites in Anaekoski and Kyroskoski to add to the previously announced €26m-boost at its Simpele plant that will see it increase capacity by a total of 150,000 t/a by the end of 2012.

“We are seeing increased demand from across the food industry - particularly the frozen food and confectionery sectors but also for cereals and dry foods such as pasta,” Mika Joukio, senior vice president, and head of consumer packaging said.

He added that food safety and sustainability considerations were driving up orders as companies looked to source virgin material.

“The safety issue with regard to folding boxboard is the potential migration of mineral oils from some materials,” said Joukio. “Our virgin fibres do not contain any mineral oils and are therefore seen as safer.”

The new production volumes are planned to be sold for food packaging purposes, confirmed the company in a statement.

Further capacity potential

M-real said the expansion at Kyroskoski site, which will add 40,000 tons to capacity, is set for completion in late 2011, while the 30,000-ton rise at the Äänekoski facility is scheduled by spring 2012.

The technological upgrade at Äänekoski would lead to the cutting of 10 of the plant’s workforce. M-real said it would begin statutory negotiations at the board mill on 18 February. The investment at Kyröskoski is not expected to have any impact on employee numbers.

Following the planned investments the annual folding boxboard production capacity at the Äänekoski mill would be approximately 240 000 tonnes and approximately 190 000 at Kyröskoski. M-real’s total folding boxboard capacity would increase to about 935 000 t/a.

The company said there was potential to increase capacity by a similar margin at the two plants as announced if further market demand emerged.

“Demand growth for M-real’s ecological and safe virgin fibre board has in food packaging been faster than expected and the expansion of Simpele mill’s capacity that will be implemented in spring 2011 is not enough to satisfy the demand,” said CEO Mikko Helander. “The best way to increase our production is to debottleneck the current board machines in moderate steps.”

Source: M-real