LYSAKER, Norway, April 30, 2013 (Press Release) - Norske Skog Saugbrugs AS has signed a long-term agreement with Statkraft for the supply of electricity for the paper mill in Halden.
We are very pleased with the agreement. Norske Skog Saugbrugs is important, both for the group and for the forestry industry in Southern Norway. This helps to secure jobs in Saugbrugs, says Sven Ombudstvedt, President and CEO in Norske Skog and chairman of the board in Norske Skog Saugbrugs AS.
The new agreement with Statkraft secures an annual supply of 1.0 TWh up to 31 December 2020. The agreement shall enter into force on 1 May 2013. The new agreement ensures almost full energy coverage for Saugbrugs over the next few years.
Norske Skogindustrier ASA has terminated its long-term group agreement from 1998 that applied to supply of energy in Southern Norway.
It is inappropriate and not commercially optimal to proceed with a group agreement in Southern Norway when we can have a custom-made agreement that meets Saugbrugs' future requirements for energy supplies. The contract is stipulated in euros to reduce the currency exposure, says Ombudstvedt.
Saugbrugs is one of the most environmentally friendly and efficient paper mills in Europe. A strong Norwegian krone and the challenging market conditions in the industry mean that the mill must have access to stable and secure energy supplies at acceptable price in order to maintain operations, says Roy Vardheim, managing director in Norske Skog Saugbrugs.
Norske Skog Saugbrugs AS employs around 530 people. The mill has an annual production capacity of 530 000 tonnes of magazine paper (SC/super calendered), with Germany and the United States as the largest single markets.