Norske Skog will take a major step in its continued transformation towards a
growing and high-margin business by converting two newsprint paper machines into
renewable containerboard production. The conversions at Golbey and Bruck will
introduce 765,000 tonnes of competitive containerboard capacity to meet the
growing demand for renewable packaging. Following the conversions, both mills
will have access to green energy and have reduced their carbon footprints to
become among the best performers in the industry. Norske Skog will continue to
be a reliable supplier of all publication paper grades after the planned
conversions. Newsprint capacity will be reduced with 360,000 tonnes, balancing
the market for the Norske Skog’s remaining European publication paper capacity. 

“This is a milestone in Norske Skog’s strategy to become a leading European
packaging producer through conversion of publication paper capacity. We will
continue to optimise our broad asset base to diversify within high-growth fibre
segments, and maximise cash flows from the publication paper business. Norske
Skog will still remain a committed supplier of high-quality publication paper
products, and a strong and reliable partner for our customers. This marks an
important step in Norske Skog's evolution as we look to enhance long-term value
for all stakeholders,” says Norske Skog’s Chair of the Board John Chiang, who
also represents the largest shareholder Oceanwood.

Norske Skog plans to invest approximately EUR 350 million in the conversion
projects over an 18-month period commencing in H2 2021. The investments are
expected to generate an annual EBITDA of approximately EUR 70-80 million at full
utilisation, based on historical prices for containerboard and recovered paper.

These investments represent the latest initiative in enhancing the circular and
industrial ecosystems at the Golbey and Bruck mills. Containerboard production
will be based on recycled fibre, and will reduce the mills’ electricity
consumption. Boilers to be constructed at the sites will provide efficient and
environmentally friendly off-take of residual materials, and in return generate
green steam for sustainable containerboard and paper production and green
electricity for the power grids. 

“The conversions at the Golbey and Bruck mills are profitable investments that
will enable Norske Skog to establish a strong presence in the growing packaging
market. In addition, it represents a major step in our continued effort to
direct Norske Skog into a growing business, enhancing value to our shareholders
and ensuring sustainable cash flow growth.” says Norske Skog’s CEO Sven
Ombudstvedt.

At the Golbey mill in France, approximately EUR 250 million is planned to be
invested to convert PM1 from its current 235,000 tonnes of newsprint capacity to
555,000 tonnes of leading recycled containerboard capacity. Following the
conversion in 2023, Golbey will have 555,000 tonnes of recycled containerboard
capacity and 330,000 tonnes of newsprint capacity. At the Bruck mill in Austria,
approximately EUR 90 million is planned to be invested to convert PM3 from its
current 125,000 tonnes of newsprint capacity to 210,000 tonnes of recycled
containerboard capacity. Following the conversion in 2023, Bruck will have
210,000 tonnes of recycled containerboard capacity and 265,000 tonnes of
light-weight coated magazine capacity.
 
Final investment decisions are planned in the first half of 2021, and start of
containerboard production in the first half of 2023. Production standstill at
the machines that will be converted is limited to three months during the final
stages of the conversions, and full utilisation is expected by the end of 2025. 

“Increased focus on sustainable packaging, and growth in on-line economy are key
market drivers in the packaging business. With the conversion investments in
Golbey and Bruck, we will meet these trends with cost-leading capacity. Both
mills are positioned close to the consumer markets of containerboard in
continental Europe, have established access to recycled fibre, and represent
some of the best brownfield conversion opportunities in the market.” says Norske
Skog’s CEO Sven Ombudstvedt.


Webcasted press conference
At the press conference, Sven Ombudstvedt (CEO) and Tore Hansesætre (SVP
Strategic Projects) will present and reply to questions about the conversion
projects in more detail. The press conference will be webcasted live at
www.norskeskog.com today at 08:00 CET.


About Norske Skog
Norske Skog is a world leading producer of publication paper with strong market
positions and customer relations in Europe and Australasia. The Norske Skog
Group operates four mills in Europe of which two will produce recycled
containerboard following planned conversion projects. In addition, the Group
operates two publication paper mills and a pellets facility in Australasia.
Norske Skog aims to further diversify its operations and continue its
transformation into a growing and high-margin business through a range of
exciting fibre projects. The Group has approximately 2,300 employees in five
countries, headquartered in Norway and listed on the Oslo Stock Exchange under
the ticker NSKOG.


For further information

Norske Skog media:
Vice President Corporate Communication and Public Affairs
Carsten Dybevig
carsten.dybevig@norskeskog.com 
Mob: +47 917 63 117
Twitter: @Norske_Skog

Norske Skog investor relations:
Investor Relations Manager
Even Lund
even.lund@norskeskog.com 
Mob: +47 906 12 919