Decision on the Kemi bioproduct mill expected in autumn 2020

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Decision on the Kemi bioproduct mill expected in autumn 2020

April 20, 2020 - 08:40
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Metsä Group started the pre-engineering of investments totalling approximately EUR 2 billion in the spring of 2019.

With the planned investments, Metsä Group meets the needs of forest owners and its customers even better than before across the entire forest industry value chain. As planned, the Rauma sawmill investment was the first of the programme’s projects to reach the decision-making stage.

“Metsä Group’s strategic goals include increasing the value of Finnish forests, profitable growth together with customers, completely fossil-free mills, replacing the fossil based economy with renewable materials and increasing carbon stored in long-life wood products. The sawmill to be constructed in Rauma will contribute to the realisation of all these goals. The role of the mechanical forest industry is very important and we need to find ways to significantly improve its performance,” says Ilkka Hämälä, President and CEO of Metsä Group. “The pre-engineering of Kemi bioproduct mill has progressed well and we expect to reach the decision-making stage in the autumn of 2020, as the environmental permit process is finalised. In this challenging situation faced by the society, what Finland needs now is investments and faith in the future. We estimate that the role of Finnish suppliers will be significant in implementing these investments.”

The Lapland ELY Centre issued its decision and grounds on the EIA report concerning the Kemi bioproduct mill on 6 March 2020. This concluded the environmental impact assessment (EIA). The environmental permit application filed with the Regional State Administrative Agency for Northern Finland is currently being updated on the basis of the reasoned conclusion.

The financing negotiations of the approximately EUR 1.5 billion investment have proceeded. In March 2020, Finnvera provided a guarantee for a EUR 500 million credit with an 80 per cent coverage, conditional on the project’s investment decision. Financing negotiations with the European Investment Bank and a number of commercial banks continue.

In addition to the environmental permit process and financing negotiations, the company is currently engaged in main equipment negotiations, the development of the logistics required by the mill and the preparation work for the construction phase at the site, including the dismantling of existing buildings and the relocation of operations within the mill area.

The company has signed a letter of intent with AFRY on planning and with Fimpec on construction management services during the possible construction phase of the Kemi bioproduct mill.

The Kemi bioproduct mill would produce some 1.5 million tonnes of softwood and hardwood pulp a year as well as numerous other bioproducts. It would employ around 250 people directly in Finland and a total of approximately 2,500 people across its direct value chain. The mill’s annual use of pulpwood, purchased mainly from Finland, would amount to roughly 7.6 million cubic metres.

During the construction phase, the Kemi bioproduct mill’s employment impact is estimated to be nearly 10,000 person-years, of which more than half would be carried out in Kemi. In the construction phase, the amount of employees is estimated to be a total of around 15,000.The starting point for the planning of the new bioproduct mill has been a high level of environmental, energy and materials efficiency. The mill would not use any fossil fuels at all, and its electricity self-sufficiency rate would be 250 per cent. This would strengthen the already significant position of Metsä Group as an electricity producer based on Finnish renewable fuels.