Norske Skog is closing down operations in Norway and expanding in Brazil. Earlier this year Norske Skog closed down its Norske Skog Union paper plant in Norway. The company will now ship its newspaper machine to Brazil, to expand operations at its Norske Skog Pisa Mill from 185,000 t/yr to 385,000 t/yr.
Norske Skog’s decision to close the newspaper mill at Skien in Norway was very controversial, not least because the mill was running at a profit. Jan Oksum, Norske Skog’s chief executive said that the company closed the mill in Norway because of overcapacity in Europe. He even declined offers to buy the mills. “The imbalance between demand and capacity in the European market is lasting,” Oksum wrote in a letter published by the Norwegian newspaper Aftenposten. “We must therefore find a permanent solution.”
Expanding the Norske Skog Pisa plant will cost US$210 million, which the company will fund itself. The company hopes to get the necessary approvals from the Brazilian authorities in 2007 and plans to start up the transferred machine in 2009.
The Pisa plant has been part of Norske Skog since it took over Fletcher Challenge in 2000. Norske Skog also has a mill in Chile – Norske Skog Bio Bio.
Further proof, as if it were needed, that the pulp and paper industry really is Pulping the South.