Ulf Larsson, CEO August 26, 2020
- Intention to invest in 300kt CTMP at Ortviken
-
Intention to exit publication paper
• Negotiations initiated for closure of all three paper machines
2
Increased value from each tree
Growing
forest asset
- Invest in integrated value chain:
- Grow Pulp
- Grow Kraftliner
- Renewable energy new segment
- Reduce exposure to Publication Paper
- Increase forest holdings:
- Increase growth and harvesting level
- Acquire forest land
- Optimize nature conservation
3
Value
2023
- 2021
Exit publication
paper
Östrand - further capacity increase
Biofuel
Acquisition of
forest land
Biorefinery optionality
- Research and development
- Pilot plant
2023
Grow CTMP pulp
Additional 70k ha |
forest land in the |
2022
Kraftliner expansion
Opportunity to |
Joint venture with |
St1 signed |
Baltics |
2018
8.0 TWh wind |
power on SCA land |
further increase |
NBSK pulp |
100 000 m3 |
biofuels |
Östrand
expansion
- Production started in June 2018
- Financed by operating cash flow
Wind power on SCA |
land is expected to |
increase to 8.0 TWh |
in 2022 |
New long-term |
target of 11 TWh |
- New 725kt kraftliner machine at Obbola
- Increase share of WT Kraftliner at Munksund
- 300kt CTMP at Ortviken and close CTMP Östrand
Closure of all |
publication paper |
machines |
capacity at |
Östrand |
- Decided or completed projects (or Exit)
- Potential projects
Time
4
| LWC volume1 | |||||||||||||||||||||
1,000 | ||||||||||||||||||||||
Exit structurally declining publication paper market | ||||||||||||||||||||||
• Low and decreasing profitability - now cash flow negative | 900 | |||||||||||||||||||||
800 | ||||||||||||||||||||||
700 | ||||||||||||||||||||||
Invest in increased CTMP pulp production | 600 | |||||||||||||||||||||
• | Attractive CTMP offering | 500 | Month / Rolling LTM | |||||||||||||||||||
• Low CAPEX per tonne | ||||||||||||||||||||||
• | Leading cost position | 400 | ||||||||||||||||||||
300 | ||||||||||||||||||||||
| 200 | |||||||||||||||||||||
Creates opportunity for further NBSK expansion | 100 | CAGR | Accelerated | |||||||||||||||||||
-5% | ||||||||||||||||||||||
0 | ||||||||||||||||||||||
Dec-17 | Dec-18 | Dec-19 | ||||||||||||||||||||
Dec-06 | Jun-07 | Dec-07Jun-08Dec-08Jun-09 | Dec-09Jun-10Dec-10Jun-11 | Dec-11 | Jun-12Dec-12 | Jun-13 | Dec-13 | Jun-14 | Dec-14 | Jun-15 | Dec-15 | Jun-16 | Dec-16 | Jun-17 | Jun-18 | Jun-19 | Jun-20 | |||||
1Deliveries from Western Europe (kt/month) | 5 |
Overview
Ortviken only remaining publication paper site in SCA
Closure of all three paper machines expected within six months
Subject to negotiations initiated with employee representatives
Annual production capacity 775k tonnes
- 500k tonnes LWC
- 275k tonnes uncoated
6
Product
properties | Strength | Absorption capacity |
Bending rigidity | Wet strength |
Lower production cost | Higher absorption | ||
Customer | at same stiffness | ||
value | |||
Certified wood raw material
Porosity | | Bulk properties | |
Stiffness | | Opacity |
Increased shape | Same product | |
thickness with less | ||
stability | ||
pulp | ||
Unique competence in birch CTMP
8
Profitable growth
Expanding product offering
- Increase capacity from 100kt to 300kt
- High share of growth with existing customers
Sales to structurally growing product segments
- Increased share of sales to tissue and packaging
- CTMP improves customer product properties at a lower cost
End use segments
Printing &
Packaging Writing
Special
300kt
Tissue
9
Investment rationale
Low CAPEX per tonne
- CAPEX SEK 1.45bn
- CAPEX SEK 5k per tonne
- Utilize existing modern TMP asset
Scale up profitable business
- ~15% lower cash cost per tonne
- Top quartile in cost position
Source: Pöyry
Cost curve SW CTMP producers
CTMP today | ||
CTMP tomorrow | ||
Östrand | ||
Ortviken | ||
10
Net sales (SEKbn) | One-off closure costs, up to (SEKbn) |
-4.0 | ~0.9 |
People affected | Write-downs (SEKbn) |
~800 | ~1.1 |
of which
Fixed assets Working capital
~750
~350
12
Investment '20-'23 (SEKbn) CTMP capacity (kt)
+1.45bn | +200kt | |
1.45 | 300 | |
100 | ||
Investment | Base | Investment |
Note: Assuming CTMP trend price of 528 USD/t
- To be reported in segment Other
EBITDA (SEKbn)
+0.3bn | |
Base | Investment |
Financial summary
Capex of SEK ~1.45bn
Profitable growth
- +SEK 0.3bn EBITDA
- Secure current business
Expected start-up beginning 2023
- CTMP production to stop at Östrand when new line up and running
- Costs for maintaining Ortviken site SEK ~20m per quarter1
Creates opportunity for further NBSK expansion at Östrand
13
Growing Forest asset
Harvesting own forest (k m3)
+1,100k m3 | ||
5,400 | ||
4,300 | 4,300 | |
2010 | 2020 | 2025 |
Wood | +2-3% | ||
Capacity (m m3) | |||
+200k m3 | |||
2,100 | 2,200 | 2,300 | |
From 11 to 5 | |||
sawmills | |||
2010 | 2020 | 2025 |
Publication Paper -5-10% | Pulp | +2-3% | Kraftliner | +2-3% | ||
Capacity (kt) | Capacity (kt) | Capacity (kt) |
-1,810kt | +880kt | +340kt | ||||||
1,810 | 1,400 | 1,140 | ||||||
200 | Further | |||||||
potential | ||||||||
865 | ||||||||
1,000 | 800 | |||||||
775 | 520 | 1,200 | ||||||
0 | ||||||||
2010 | 2020 | 2025 | 2010 | 2020 | 2025 | 2010 | 2020 | 2025 |
+[]% = Annual market growth / decline | 15 | |||||||
NBSK | CTMP | |
Raw material
SCA capacity
- Produced by cooking wood chips in white liquor
- Gives pulp with long, strong fibers
- Possible to bleach to full brightness with no yellowing effect
- Provides high strength and brightness to paper products
- Higher consumption of wood per ton pulp
- Creates a energy surplus
Pine and spruce (softwood)
900k tonnes at Östrand
- Produced by grinding wood chips in a refiner
- Gives shorter, stiffer fibers that provide absorption capacity, bulk and stiffness to paper products
- Not possible to bleach to full brightness
- Lower consumption of wood per ton pulp
- No energy surplus
Both softwood and hardwood
100k tonnes today at Östrand (to be closed)
300k tonnes tomorrow at Ortviken
17
This presentation may contain forward-looking statements. Such statements are based on our current expectations and
are subject to certain risks and uncertainties that could negatively affect our business. Please read SCA's most recent annual report for a better understanding of these risks and uncertainties.
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SCA - Svenska Cellulosa AB published this content on 26 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 August 2020 14:56:09 UTC