Metsä Tissue's Strategic Projects "Advancing Well"

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Metsä Tissue, Espoo, Finland, reports that its Baking and Cooking investment program in Düren, Germany, is proceeding on schedule, with the rebuild of both PM 5 and related facilities completed and the new converting lines now operational. The complete facility will be dedicated to the production of baking and cooking papers marketed under the SAGA brand.

Metsä Tissue’s three-year investment program at its Krapkowice mill in Poland is now into the building stage, the company notes. The program announced earlier this year includes two new paper machines, a converting line, the rebuild of one paper machine, and general infrastructural development. In June the company signed a near EUR 37.0 million credit agreement with Sumitomo Mitsui Banking Corp. for financing the program. The investment will further strengthen Metsä Tissue’s foothold in Central Europe.

Also in June, the company announced an agreement with Georgia-Pacific, Atlanta, Ga., USA, under which it will manufacture, sell, and market G-P’s Lotus consumer tissue brand in Russia. The deal is expected to close at the end of the third quarter. Last year, Lotus consumer sales in Russia totaled around EUR 20 million. The agreement will strengthen Metsä Tissue’s position in the Russian consumer tissue market, making it the second-biggest supplier in the branded category.

As the deteriorating availability and quality of locally sourced recovered paper is threatening the production of recycled fiber-based products, Metsä Tissue says it been carefully evaluating options for mitigating the associated risks. Drivers behind the threat are the declining consumption of primary fiber based paper and increasing exports of recovered paper both in and outside of Europe. The quality of recovered paper, the company explains, threatens to deteriorate as a result of unsorted waste collection systems in certain European countries and a growing interest in the incineration of recovered paper as an energy source.

Metsä Tissue’s Lambi launched a renewed toilet paper grade in Finland this past May, featuring new embossing and a new, softer, and thicker base paper. In addition, Lambi also introduced new summer prints for its toilet paper, household towels, and napkin ranges. Katrin introduced a new plastic-free sauna seat cover called Green Spa. Completely biodegradable and fully compostable, it is the first product of its kind to be awarded the Nordic Swan Ecolabel.

To mark the UN International Year of Forests, the Metsäliitto Group and WWF Finland concluded a cooperation agreement covering 2011 and 2012. Within the framework of this cooperation, Metsä Tissue is organizing training for its personnel on themes related to sustainable development. The first training session was organized in cooperation with the WWF in June.

According to Metsä Tissue, the demand for tissue and cooking papers is expected to remain stable and brand growth looks set to continue. Higher variable production costs and additional expenses will continue to be transferred to prices.