Capacity snapshot: BillerudKorsnas begins concept, feasibility planning to convert Verso's Escanaba, Michigan, mill to paperboard, expects to complete CapEx plan in H1 2023, aims to have one machine running cartonboard by late 2025, early 2026: CEO

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LOS ANGELES , May 25, 2022 () –

Following BillerudKorsnäs AB's acquisition of Verso Corp. — now called Billerud North America — the company will begin the work of converting Verso’s Escanaba, Michigan, paper mill to an integrated paperboard facility with expected capacity of about 1.2 million tons.

BillerudKorsnäs sees cartonboard “as a major growth engine,” CEO Christoph Michalski said during the company’s Q1 earnings call on May 5. “We have identified North America as one of the key growth markets.”

Verso is currently operating in two segments “that are not part of our core,” he said. The acquisition added significant business to BillerudKorsnäs in graphic paper, speciality paper and pulp. BillerudKorsnäs plans to continue operating the Quinnesec, Michigan, mill as a graphic papers mill.

With the Verso acquisition complete, BillerudKorsnäs “has already started the conversion work in the sense that we are at the concept stage” and will move into feasibility planning, Michalski said. He expects the company to have “a very solid CapEx plan for this transformation” in the first half of 2023.

“We need to make sure that we have all the right estimates for that CapEx and the planning for implementation,” he added. “But at this stage, our intention is still that we have one of the mills up and running in cartonboard, one of the machines, by the end of 2025, beginning of 2026.”

Meanwhile, BillerudKorsnäs will move forward with planned maintenance stops at the two Verso mills in Q3. Escanaba downtime is planned to be eight days, with an estimated impact of 180 million Swedish krona.

At Quinnesec, the downtime includes the mill’s normal annual stop along with some more significant mill upgrades. The paper machine is expected to be down for 14 days, while the recovery boiler is planned to be down for 37 days. Some key items include a power infrastructure upgrade, digester top replacement, recovery boiler lower furnace and various upgrades on the paper machine.

Michalski reiterated that BillerudKorsnäs's strategy focuses on prioritizing cartonboard, prioritizing North America "and building a very good business there."

“I think there (is) always a little bit of skepticism sometimes about our ability to run this transformation,” he said. “I'm absolutely convinced we will be very successful to conquer the cartonboard market. It is now our intention that we build up significant volumes over time until the conversion is done and then switch that production to our North American asset.”

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