Spain – Forest industry group Holmen has signed an agreement to sell its newsprint mill in the Spanish capital Madrid. The buyer, International Paper, will convert the mill for recycled containerboard production. Also included in the transaction is recycled paper collector CartÃ³n y Papel Reciclado SA and Holmen’s 50% shareholding in energy producer Peninsular CogeneraciÃ³n SA.
The transaction, which is expected to close during the second quarter of 2016 subject to regulatory approvals, ‘allows us to focus on developing our successful speciality paper strategy at our Swedish mills’, says Holmen’s ceo and president Henrik SjÃ¶lund.
‘Holmen has the base in renewable forest and energy assets supplemented by industrial operations in paperboard, printing paper and sawn timber. After the sale of the Madrid mill, the printing paper operations have the potential to deliver good profitability,’ he adds.
International Paper will continue to produce newsprint at the mill until the second half of 2017 when it is scheduled to be converted for containerboard production with an expected annual capacity of 380 000 tonnes. During this period, Holmen will sell the newsprint produced at the mill.
According to International Paper, its aggregate investment in the project – including purchase price and conversion costs – is anticipated to be Euro 150 million.
‘The Madrid facility represents a strategic opportunity to grow our corrugated packaging business in EMEA by further enhancing our value proposition and offering our customers even more choices in terms of innovative, tailored and high-performing packaging solutions,’ comments Jean-Michel Ribieras, president of International Paper Europe, Middle East & Africa.
Holmen says the financial effects of selling newsprint from the Madrid mill during the period until conversion are expected to be limited.