Smurfit Kappa to invest Euro25M on biomass energy at mill in Spain

IURRETA , Spain, Nov. 2, 2009 (Press Release) - SMURFIT KAPPA NERVIÓN S.A., part of the SMURFIT KAPPA Group, a world leader in paper based packaging, has announced capital expenditure of 25 million Euros on a biomass-based renewable energy plant together with residual gas treatment at the SK mill in Iurreta, Biscay, SPAIN.

Energy efficiency, sustainability

The SMURFIT KAPPA NERVIÓN mill is an integrated Kraft pulp and sack paper mill, with an annual output of 150,000 tonnes of paper, of which over 80% is exported.

The purpose of this capital investment is to increase heat and electricity generation from renewable sources at the plant and significantly improving the cost and operating efficiency of the installed equipment and the mill's capacity to treat and manage residual forest-based material. Currently, the facility produces 80,000 MWh per year of electricity from renewable biomass sources and it is fuelled by black liquor - a by-product of the wood cooking process - and by bark. These by-products are produced both at the Nervion mill from stems stripped for paper-making and at sawmills. In both cases, these are previously valueless residual products which will provide additional value when used as a resource with which to generate electricity.

Waste revaluation and cleaner timberlands

The main objective of the project, which is due to be implemented in the first half of 2011, is to increase the consumption of biomass from forest farms. This investment not only allows for energy to be generated from renewable sources but also helps to keep our timberlands cleaner, thereby further contributing to the sustainability of the forest resources. Primary forest biomass will come from forestry activities such as pruning, shoot selecting, logging for plant health reasons and undergrowth clearing. Using this residual biomass provides unquestionable advantages, such as a reduction of CO2 fossil emissions at the mill itself by 34% and in our total virgin based mill system by 2.5%. It will also reduced SO₂ emissions and enhances sustainable forest management.

As a result of this project, forest biomass consumption is planned to increase by over 40,000 tonnes per year to reach an annual consumption of more than 100,000 tonnes, while the increase in electricity generation of over 40% will set the annual figure at 115,000 MWh. The capital outlay will be mainly used to treat and prepare residual biomass from forest farms, to optimise combustion in the plant's existing boilers, and to install a new steam turbine.

This investment, on top of the 20 million Euro invested last year to improve quality and production efficiency, represents a further commitment by the SMURFIT KAPPA Group to the Iurreta plant and to the region, with a total of 45 million Euros to be invested in the period between 2008 and 2012.

This project is encompassed within the Group's overall strategy to increase its overall operating efficiencies while supporting renewable energy sources, Sustainable Forest Management and environmental protection.