Espoo, Finland 21 April 2015 -- Metsä Fibre, part of Metsä Group, has today 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 EUR 1.2 billion, of which 40 per cent will be equity financed and 60 per cent debt financed. The latter will include bank loans and trade credit. In addition, Metsä Fibre has received EUR 32.1 million as an investment subsidy for renewable energy from the Finnish Ministry of Employment and the Economy. Metsä Fibre is owned by Metsäliitto Cooperative (50.2 per cent), Metsä Board Corporation (24.9 per cent) and Itochu Corporation (24.9 per cent).

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 utilised 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 metres per year, or approximately 10 per cent. 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 says.

A significant impact on the Finnish economy

After completion, the bioproduct mill will increase the annual value of Finland's exports by EUR 0.5 billion, and its income effect on Finland will be more than EUR 0.5 billion annually. During construction, the bioproduct mill's effect on employment will be approximately 6,000 jobs and when completed more than 2,500 jobs in the entire value chain, of which approximately 1,500 will be new. The mill itself will employ approximately 200 people.

Approximately 70 per cent of the bioproduct mill's main equipment deliveries will be of Finnish origin. The detailed engineering work will require approximately 200 man-years, and 100 per cent will be of Finnish origin.

Energy efficiency and low emissions used as design criteria

Minimised emissions, low specific water consumption, as well as high energy and material efficiency have been the central design criteria for the bioproduct mill. The wood raw material used by the mill and all side streams will be fully utilised as products and bioenergy.

The bioproduct mill will contribute to achieving renewable energy targets in Finland. The mill concept maximises the bioenergy to be sold and increases the share of renewable energy in Finland by approximately two percentage points. Furthermore, the mill will not use any fossil fuels. All of the energy it requires will be generated from wood. The electricity self-sufficiency rate of the mill will be 240 per cent.

Metsä Group is a responsible forest industry group whose products' main raw material is renewable and sustainably grown northern wood. Metsä Group focuses on tissue and cooking papers, fresh forest fibre paperboards, pulp, wood products, and wood supply and forest services. Its high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group's sales totalled EUR 5 billion in 2014, and it employs approximately 10,500 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 122,000 Finnish forest owners.

Metsä Fibre is a world-leading producer of softwood pulp and its main brand is Botnia. Our products - sustainably and cost-efficiently produced softwood and birch pulp - are specially developed for the production of high-quality tissue and writing papers, speciality products, and board. With four pulp mills in Finland, we employ a total of about 850 people. Our sales in 2014 were approximately EUR 1.3 billion. Metsä Fibre is part of Metsä Group.