Sweden. Södra skogsägarna ekonomisk förening

The loan has been provided to Södra, a Swedish economic association of forest owners (Södra skogsägarna ekonomisk förening), for financing the expansion of Södra Cell pulp mill in Värö, South West Sweden.

Södra has made the decision to go ahead with SEK 5 billion (EUR 540 million) worth of investments. The largest of these investments is the Värö pulp mill expansion investment, worth around SEK 4 billion, to increase pulp production capacity to 700,000 tonnes a year from the current 425,000 tonnes. The investment is to be completed by year-end 2016.

Södra is owned by over 50,000 forest owners in Southern Sweden. The Group has three business areas: timber raw products and forestry services (Södra Skog); wood products and interior wood products (Södra Wood); and Nordic pulp and biofuel (Södra Cell). Södra employs 3,500 people and is one of the leading European suppliers of pulp for the global market. In 2015, Södra had net sales of SEK 18.3 billion (EUR 2.0 billion).

The expansion of pulp production will make Södra’s Värö pulp mill one of the biggest producers of softwood pulp globally. The new capacity will mainly be used to meet the increasing demand for packaging materials and tissue aimed at the Asian market. The side streams from the pulping process will increase the energy deliveries of biofuels, electricity and district heating for external use. Part of the technology to be implemented at the new plant has been developed over a number of years by Södra’s R&D unit.

The forest industry cluster has a strong concentration of competence in the Nordic countries and is a cornerstone of the Swedish economy. The forestry industry employs a significant number of people and has a strong impact on exports. Making processes more efficient and increasing the use of unexploited wood resources, established infrastructure and active markets will add value to the NIB member countries’ economy and benefit the region’s existing pulp and paper cluster.

The project’s scope and potential environmental impact implies category A. The project was publicly disclosed on NIB’s website for a period of 30 days. No comments were Areceived.

An environmental impact assessment (EIA) has been carried out for the project, and the document is dated February 2014. In the EIA, the environmental impacts of a production capacity of 850,000 tonnes of kraft pulp per year have been assessed. After the EIA was completed, it was decided to increase the production capacity up to 700,000 tonnes per year. Thus, the EIA has overestimated the impacts slightly compared to the actual production increase. The EIA is in accordance with NIB’s requirements.

A total of 83% of the wood raw material is certified according to either FSC or PEFC. All non-certified raw material used by Södra Cell AB is FSC Controlled Wood. The wood supply does not give rise to significant environmental concerns. Discharges of pollutants into the Kattegat sea are in general predicted to increase due to the extended production. All discharges are predicted to be in line with or below what is achievable using the best available technology, fully in line with NIB’s requirements in the Sustainability Policy and Guidelines and in compliance with the conditions in the environmental permit.

Emissions into the air will increase due to the extended operations. All emissions into the air are predicted to be in line with or below what is achievable using the best available technology, fully in line with NIB’s requirements and in compliance with the conditions in the environmental permit. The odour from the plant is not predicted to increase due to the investment. Due to planned noise mitigation measures, the general noise level in the vicinity of the mill will decrease. Locally, the amount of road transportation will increase significantly, as will emissions due to this transportation.