2 September 2020 by Steve Eminton

Positive message surrounds Shotton sale plan

Last week saw the unveiling of plans to sell the UPM Shotton newsprint mill with its adjacent materials recycling facility. 

The announcement came from UPM at its headquarters in Finland. The business describes itself as leading “the forest-based bioindustry into a sustainable, innovation-driven, and exciting future across six business areas.”

The mill has benefited from a series of updates on the energy side

These include pulp, timber, biofuels, energy and paper with a new area of biocomposites. A good example this month of how it is moving into new areas – rather than the more traditional ones such as making newsprint – came with the announcmenet that UPM Biomedicals had brought its first clinical product, a wound dressing, to market.

It was against this background of reshaping UPM that the sale of Shotton on Deeside in north Wales was announced with the reshaping a consequence of the demand for newsprint in Europe shrinking fast.

Importantly though, is the fact that the mill is now being put on the market with a clear message  – that Shotton has benefited from recent investment and offers a good opportunity for a buyer to convert the machine into making another paper grade, most probably for packaging.

Operational

Speaking exclusively to letsrecycle.com, Tomi Hytonen, general manager of UPM Shotton, who was previously at the Kaipola mill in Finland, emphasised that Shotton “will remain operational throughout the sale process and continue to serve our customers”.

Mr Hytonen, who has been at Shotton for the past three years, explained that similar machines to the one at Shotton have been sold by UPM and subsequently converted in France and Germany so confirming that a Shotton conversion is a “very feasible project”.

Tomi Hytonen, general manager, UPM Shotton

In terms of the time it would take to convert the machine, the general manager explained that this would depend on what material would be made, such as testliner or packaging grades. The intention would be to keep the existing plant running, perhaps even while machinery and equipment were brought in ahead of the conversion project.

Timeline

No timeline for a sale was given out by UPM of Finland in its announcement for the sale of Shotton. However, a two-year period has been indicated as the likely timeframe within the industry.

Mr Hytonen said that the process would take time, possibly up to two years, as there would be a number of stages to go through such as the bidding process and due diligence.

He highlighted that the mill, which has a capacity of 250,000 tonnes, is in good condition with a “good level of efficiency” and has received ongoing investment including current spending on its energy capacity which includes boiler turbine modifications.

“I truly believe we have a very good asset here in Shotton. We have access to water as well as good electricity and gas connections and a good geographical location.”

Mr Hytonen also highlighted the importance of a skilled workforce with the employing about 190 people. “The staff are an important part of successful production. Here we have a very reliable and motivated workforce with very little turnover of staff.”

The location of the mill also helps in terms of good access to fibre markets, which will benefit the buyer, he commented.

And, while buying in feedstock, UPM is unusual within the sector in having its own materials recycling facility (MRF) to help provide paper for the recycling process at the mill and for use in papermaking. The MRF was opened in 2011 and serves a number of local authorities.

MRF

“The MRF is a great source of recovered fibre”

Tomi Hytonen

In a separate building close to the paper mill itself, UPM operates its 200,000 tonne per annum capacity materials recycling facility which will form part of the sale. This is connected to the paper mill inbound warehouse by conveyor so that the sorted newspapers and magazines from the MRF can be transported straight into the paper making process.

Mr Hytonen said having the MRF gave the mill operator an advantage in that “it is a great source of recovered fibre”.

And, he said that the company will continue to operate the MRF using fibre from it for the mill. With growing volumes of card in the feedstock, he said this would also be useful for a purchaser who converted the paper machine for packaging materials.

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