Paper and Ink Prices Continue to Rise in Europe as Another Paper Industry M&A Stuns the Market

Recently, Sappi Europe announced that, effective September 1, 2021, it will raise the prices of all its board and containerboard products, as well as Transjet, ba

sejet and inkjet papers, by 8%–12%.

The company said that unprecedented and sustained rises in raw material costs (especially pulp, chemicals and energy), combined with extremely high freight rates, have made the price adjustment unavoidable. Sappi's sales team will contact customers to discuss details and support implementation.

On the ink side, Tony Lord, President of the Commercial, Publication and Sheetfed Inks (CPS) division of the Flint Group, announced that there seems to be no end to the ongoing raw material supply crisis for ink manufacturers. He warned that rising costs and shrinking raw material supply remain issues of concern for the company.

Flint CPS said in a statement: "In the first half of 2021, the company worked with its customer base to cope with challenging market conditions and hoped that the market would regain some stability by the end of 2021. Unfortunately, the company has yet to see any improvement in raw material supply, and coupled with pressures in global transportation and logistics, costs have been continually pushed up on all sides."

Tony Lord commented: "Flint CPS's operations and procurement teams continue to work tirelessly to mitigate the multiple increases affecting our business and to ensure our cost base is in the best possible shape. However, it is certain that as costs remain at these levels, our business will not be able to fully absorb them."

Meanwhile, a European paper mill with an annual output of 600,000 tons of containerboard was sold by its group, shocking the European market.

This containerboard mill in Verzuolo, with an annual capacity of 600,000 tons, belongs to the Burgo Group, and the buyer is Smurfit Kappa, the European containerboard and corrugated box manufacturing giant. The Avezzano mill under the Burgo Group announced that it is not affected by this move.

This shocked the market. Only in early 2020 did the company complete the conversion of the mill's PM9 from LWC paper to recycled containerboard. Now the group has agreed to sell the mill to Smurfit Kappa. The acquisition price is 360 million euros. The transaction is expected to be completed in the fourth quarter of this year.

At present, SKG operates an Ania paper mill in the province of Lucca, Italy. The mill produces recycled containerboard on two machines, with total capacity of 200,000 tons. The acquisition of the Verzuolo mill will enable the group to better serve customers. Saviero Mayer, CEO of Smurfit Kappa, noted: "Verzuolo is highly complementary to SKG's existing business and is strategically positioned to serve Southern Europe and other markets."

The Burgo Group reported that it will continue to operate its containerboard business through its Avezzano mill. In 2018, the conversion of the Avezzano mill marked the Burgo Group's entry into the containerboard market. The mill previously produced offset paper and, after rebuilding, can produce recycled containerboard with an annual capacity of 230,000 tons.

The company hopes to continue implementing its strategic plan to expand its product range. "Further investment will be devoted to developing high-value-added products for packaging and plastic substitutes," the company reported. It said that a leaner financial structure will help achieve this goal. With QuattroR taking a stake alongside the Marchi holding group, the transaction will enable it to accelerate the industrial restructuring process launched in 2020. The two companies formed a joint venture and acquired a 91% majority stake in the Burgo Group.

In addition, as part of the Metsä Group, Metsä Board has decided to invest 210 million euros to increase the cartonboard capacity of its Husum mill in Sweden.

The company is responding to growing demand for sustainably produced packaging materials that support the circular economy. This investment will further consolidate Metsä Board's position as Europe's leading cartonboard producer.

It is reported that the Husum integrated mill's annual cartonboard capacity will increase by 200,000 tons. At present, BM1's annual cartonboard capacity is 400,000 tons, which will rise to 600,000 tons after the investment. This additional capacity will be brought to market during 2024–2025. Construction preparations will begin in October 2021 to align with the planned annual maintenance shutdown of the Husum integrated mill. The ramp-up of the new capacity is expected to begin in the autumn of 2023, reaching full production by the end of 2025.

The investment will increase Metsä Board's annual sales by about 200 million euros. In addition, the investment is expected to have a positive impact of about 50 million euros on the company's annual comparable EBITDA. The sales growth and EBITDA improvement are expected to be fully realized in 2026. In addition, the new capacity will mainly target the North American and European markets, where demand for Metsä Board's premium lightweight cartonboard is expected to continue to grow. For example, Metsä Board's cartonboard is mainly used for food, pharmaceutical and cosmetics packaging as well as food service packaging.

——This article is reproduced from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-377902.html