Metsä Fibre announced that it has made the decision to build a bioproduct mill in Äänekoski, Finland in the area of the existing pulp mill. The construction work will begin immediately, and the mill is scheduled to be completed during the third quarter of 2017.

The new bioproduct mill in Äänekoski is the largest investment of the forest industry in Finland. The total investment will amount to approximately Euro 1.2 billion, of which 40% will be equity financed and 60% debt financed. The latter will include bank loans and trade credit. In addition, Metsä Fibre has received Euro 32.1 million as an investment subsidy for renewable energy from the Finnish Ministry of Employment and the Economy.

The bioproduct mill's annual pulp production will be approximately 1.3 million tonnes, of which 800,000 tonnes will be softwood pulp and 500,000 tonnes hardwood pulp. The softwood pulp will be exported mainly to Europe and Asia. In addition to premium pulp, the mill will produce much more electricity than it will need, as well as tall oil and turpentine, among other bioproducts. All side streams from the bioproduct mill are planned to be utilized in the ecosystem that will be formed by various companies around the mill.

The new mill will increase the consumption of pulpwood in Finland by approximately 4 million cubic meters per year, or approximately 10%. The mill will use a total of 6.5 million cubic metres of wood raw material annually, which will mainly be sourced from Finland.

Sweco Industry Oy and Sweco Rakennetekniikka Oy will be responsible for the detailed engineering of the mill, and Valmet Oy and Andritz Oy for the main equipment deliveries.

"We have a very busy year behind us. During this period, we have determinedly advanced the project according to the original plan. The mill area has been prepared for the construction work, an environmental permit and other permits currently required for the construction have been obtained, the financing solutions have been agreed, and the main partners have been selected. Cooperation with the authorities as well as other parties participating in the project has been open and constructive," says Kari Jordan, President and CEO of Metsä Group.

"The steady growth in the demand for northern softwood pulp on the global market is the main driver for the investment. We aim to strengthen our leading position in this market, increase Metsä Fibre's business, and improve our profitability in the long term," Jordan said.