Mondi's €470m Czech mill expansion will also lower costs

Paper and packaging group Mondi has signed off on a €470m investment in modernisation and expansion of its Steti mill in Czechia, which will increase capital expenditure in the three years to 2019.

With the intention of lower energy costs and increase production from Štětí, which sits on the banks of the Elbe River, 40km north of Prague, the project will lift annual capital expenditure to a range of €600-650m in 2017 and €800-850m in 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,” said chief executive David Hathorn.

As well as a 'debottleneck' of its paper machines to provide total incremental production of 55,000 tonnes a year, Mondi will install a new recovery boiler, rebuild fibre lines, both to be ready by late 2018.

The site will also see investment in a new 90,000-tonnes-per-year machine-glazed kraft paper machine, expected to start up in the first half of 2019 and supply fast growing end-uses in flexible packaging and food service applications.

Post completion, Steti will be much more electricity self-sufficient, lowering its energy costs and reducing the environmental footprint of the mill, while the expansion will lift pulp production to 130,000 tonnes per annum and lower pulp production costs per tonne.