Dual-listed Mondi will invest €470-million on the modernisation and expansion of the Steti mill, in the Czech Republic.
The project will entail the installation of a new recovery boiler, rebuilding the fibre lines, debottlenecking the paper machines and an investment in a new 90 000 t/y machine glazed kraft paper machine.
Mondi said in a statement on Thursday that the upgrades would allow for increased electricity self-sufficiency, lower energy costs and a reduced environmental footprint, as well as a 130 000 t/y increase in pulp production, while lowering productions costs.
This would also cut the company’s maintenance capital expenditure (capex) by about €105-million over the next five years.
The new recovery boiler and rebuilt fibre lines are expected to start up in late 2018, while the new paper machine is expected to start up in the first half of 2019.
Based on the current timetable, capex on the project is expected to be incurred in the three years from 2017 to 2019.
Given the approved project pipeline, the group’s capex is now expected to be in the range of €600-million to €650 million for 2017 and €800-million to €850-million for 2018.
“This investment represents an exciting step in the continued development of our packaging paper business, further leveraging our low-cost production footprint in central Europe to produce high-quality products that meet the growing needs of our customers,” Mondi CEO David Hathorn said.