FINLAND (News release) -- Metsä Fibre, part of Metsä Group, has made the decision to build the world's most modern sawmill in Rauma. The value of the investment is approximately EUR 200 million. Construction will begin in the spring of 2020. Production at the sawmill is set to begin during the third quarter of 2022. The coronavirus outbreak may have an impact on the schedules.

The pre-engineering phase of the Kemi bioproduct mill continues, and Metsä Group expects to be ready to make a decision on this approximately EUR 1.5 billion mill in the autumn of 2020.

Metsä Group started the pre-engineering of investments totalling approximately EUR 2 billion in the spring of 2019. With the planned investments, Metsä Group meets the needs of forest owners and its customers even better than before across the entire forest industry value chain. As planned, the Rauma sawmill investment was the first of the programme's projects to reach the decision-making stage.

"Metsä Group's strategic goals include increasing the value of Finnish forests, profitable growth together with customers, completely fossil-free mills, replacing the fossil based economy with renewable materials and increasing carbon stored in long-life wood products. The sawmill to be constructed in Rauma will contribute to the realisation of all these goals. The role of the mechanical forest industry is very important and we need to find ways to significantly improve its performance," says Ilkka Hämälä, President and CEO of Metsä Group. "The pre-engineering of Kemi bioproduct mill has progressed well and we expect to reach the decision-making stage in the autumn of 2020, as the environmental permit process is finalised. In this challenging situation faced by the society, what Finland needs now is investments and faith in the future. We estimate that the role of Finnish suppliers will be significant in implementing these investments."

Rauma to be the biggest sawmill investment ever in Finland
The value of the Rauma sawmill investment is approximately EUR 200 million, and the new unit will produce around 750,000 cubic metres of pine sawn timber a year. The new sawmill will be a worldwide forerunner in technology and efficiency. For example, using machine vision and artificial intelligence in different stages of the sawing process is a significant new development. Similar technology is not yet in use anywhere in the sawmill industry.

"The next-generation sawmill to be constructed in Rauma is a significant leap forward for the whole industry. The new technology allows for the transition from workstations to control room monitoring and continuous operation. The key elements of the Rauma sawmill's operating model include employees' in-depth expertise and multiple skills as well as user maintenance," says Ismo Nousiainen, CEO of Metsä Fibre. "The demand for high-quality sawn timber will increase globally, especially in the demanding component and woodworking industries."

The new sawmill will employ around 100 people directly and around 500 people across its direct value chain in Finland. The sawmill's employment impact during the construction phase is estimated to be roughly 1,500 person-years. The annual use of logs sourced in Finland is estimated to be around 1.5 million cubic metres. Sawn timber produced by the Rauma sawmill will be sold mainly to Europe and Asia.

The location of the new sawmill is logistically excellent as it enables efficient integration into the pulp mill and smooth sawn timber logistics for customers through the Port of Rauma. The synergies between the integrated mill and the pulp mill will be used in power generation, side-stream utilisation, logistics and services. The environmental impact of the sawmill will be minimised, and noise management, for example, has been taken into consideration starting from the design phase, both in construction and in the selection of equipment and machinery.

Metsä Fibre has made an agreement with Veisto on the delivery of the new sawline. This delivery's degree of Finnish origin is more than 80 per cent. Negotiations with other equipment suppliers are underway. The company has signed an agreement with AFRY on planning the sawmill's construction phase and with A-Insinöörit on construction management services.

"The full utilisation of the wood raw material is central to our unique bioproduct concept. Log wood is used as raw material for the sawmill. The bark and sawdust generated during the production of sawn timber are used for bioenergy, and the chips are used as raw material for pulp. Pulp production generates bioenergy for the sawmill, and the remaining energy is sold outside the integrated mill. In the future, this investment will enable both the Rauma sawmill and pulp mill to operate without using any fossil fuels," says Nousiainen.

Decision on the Kemi bioproduct mill expected in the autumn of 2020
The Lapland ELY Centre issued its decision and grounds on the EIA report concerning the Kemi bioproduct mill on 6 March 2020. This concluded the environmental impact assessment (EIA). The environmental permit application filed with the Regional State Administrative Agency for Northern Finland is currently being updated on the basis of the reasoned conclusion.

The financing negotiations of the approximately EUR 1.5 billion investment have proceeded. In March 2020, Finnvera provided a guarantee for a EUR 500 million credit with an 80 per cent coverage, conditional on the project's investment decision. Financing negotiations with the European Investment Bank and a number of commercial banks continue.

In addition to the environmental permit process and financing negotiations, the company is currently engaged in main equipment negotiations, the development of the logistics required by the mill and the preparation work for the construction phase at the site, including the dismantling of existing buildings and the relocation of operations within the mill area.

The company has signed a letter of intent with AFRY on planning and with Fimpec on construction management services during the possible construction phase of the Kemi bioproduct mill.

The Kemi bioproduct mill would produce some 1.5 million tonnes of softwood and hardwood pulp a year as well as numerous other bioproducts. It would employ around 250 people directly in Finland and a total of approximately 2,500 people across its direct value chain. The mill's annual use of pulpwood, purchased mainly from Finland, would amount to roughly 7.6 million cubic metres. During the construction phase, the Kemi bioproduct mill's employment impact is estimated to be nearly 10,000 person-years, of which more than half would be carried out in Kemi. In the construction phase, the amount of employees is estimated to be a total of around 15,000.The starting point for the planning of the new bioproduct mill has been a high level of environmental, energy and materials efficiency. The mill would not use any fossil fuels at all, and its electricity self-sufficiency rate would be 250 per cent. This would strengthen the already significant position of Metsä Group as an electricity producer based on Finnish renewable fuels.