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Heinzel Making Investment
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Vienna, Austria 08 June 2017 -- (News release) -- The Supervisory Boards of Laakirchen Papier AG and Heinzel Holding GmbH has approved the extensive investments for the expansion of the Laakirchen paper mill in Austria involving total spending of over EUR 100 million.

Kurt Maier, the Heinzel Holding CEO: "With these investments we will turn Laakirchen with its two paper machines into one of the most competitive and environmentally friendly paper mills in Europe - on a sustainable basis. A precondition for the realization of this project is a substantial efficiency program supported by all employees."

The investment programme consists of two elements. Firstly, the Paper Machine 10 is to be converted to produce lightweight containerboard using wastepaper as fibre base. Secondly and simultaneously, the production capacity of the Paper Machine 11 producing SC paper for magazines, catalogues and commercial print will be extended considerably. Mark Lunabba, the Laakirchen Papier AG CEO: "Laakirchen will be able to produce nearly 800.000 tons of paper annually, which means that the long-term future of the location is secured."

The PM10 was taken into operation in 1987 and has been kept in state of the art condition through regular reinvestments. Its present annual output is around 250.000 tons of SC paper, but will produce from autumn 2017 onwards lightweight containerboard based on waste paper. Testliner and fluting products from the 7.50 meter wide PM10 in Laakirchen will be manufactured in different bases weights from 70 g/m2 upwards. In full operation the capacity will reach 450.000 tons per year. The product range forms an ideal supplement to the qualities produced at Raubling Papier GmbH in Germany, which was integrated into the Heinzel Group at the beginning of 2016. Raubling Papier focuses on special papers for the corrugated board market. Kurt Maier: "The Heinzel Group will thus have established an outstanding position in the expanding European packaging paper market." In the years to come, the Laakirchen and Raubling locations will produce 700.000 tons of container board grades annually. These will be marketed under the brand name "starboard".

Parallel to the conversion of the PM10, the current capacity of the PM11 of around 300.000 tons of SC paper will be increased in order to use the full potential of this machine. In order to achieve this an additional calender will be taken into operation and provide paper with higher smoothness and gloss. Mark Lunabba, the Laakirchen CEO: "This represents a clear commitment to the production of publication papers in Laakirchen. The investment in the PM11 will enable us to further improve our cost position with regard to SC papers and thus secure our future in a challenging business environment."

The focus of the PM11 will be web offset printing papers with a high content of recycled fibre. However, rotogravure paper customers will continue to be served with products from Laakirchen. Thomas Krawinkler, the Laakirchen Sales and Marketing Manager: "The conversion of the PM10 allows us to balance the declining demand for rotogravure papers in our key markets. Nonetheless, in future our customers can still rely on Laakirchen's proven quality and first class service." During the coming twelve months, the PM10 will continue to produce its usual range of SC paper qualities. Subsequently, from autumn 2017 onwards, all customers will be supplied from PM11.

Heinzel Group CEO, Kurt Maier: "In the future, the Laakirchen paper mill's business will no longer be built on one pillar but two, which clearly represents a more solid footing."



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