In a strategic move, Billerud's Board of Directors has decided against converting its Escanaba mill in the US to cartonboard production. Instead, the company is charting a new course, gradually shifting its product focus towards packaging materials in North America. This shift, backed by a measured investment approach, signals Billerud's commitment to adapt to evolving market dynamics while maximizing returns.

“After extensive deliberation and thorough market analysis, we have concluded that the projected return on investment for the conversion of Escanaba to cartonboard production is not sufficiently compelling,” explained Ivar Vatne, President and CEO of Billerud. “Market conditions have evolved, and the costs associated with the necessary transformation have escalated. Therefore, we are adopting a more pragmatic investment strategy for our North American operations.”

Despite the pivot, Billerud remains steadfast in its dedication to the North American market. Since its acquisition in 2022, the company has witnessed exceptional performance in the region, exceeding initial expectations. With a strategic focus on optimizing resources and leveraging existing infrastructure, Billerud aims to capitalize on the region's promising long-term outlook for paper and packaging materials.

Vatne emphasized, “Our North American operations play a vital role within Billerud's global strategy. With access to cost-competitive fiber and robust organizational alignment, we are well-positioned to navigate market complexities and seize emerging opportunities.” Billerud foresees considerable potential to diversify its product portfolio, leveraging enhanced machine flexibility to cater to evolving consumer demands in the packaging sector.

While the Escanaba mill will not undergo conversion, Billerud remains committed to meeting the needs of North American customers. The company will continue to supply high-quality cartonboard sourced from its European mills, ensuring seamless continuity in service and product excellence.

The strategic realignment is not without its financial implications. Billerud anticipates approximately SEK 200 million in costs associated with the transformation program, which will be reflected in the second-quarter results of 2024 as an item affecting comparability.

This decisive move underscores Billerud's proactive approach to strategic planning and underscores its commitment to delivering innovative packaging solutions that meet the evolving needs of customers in North America and beyond.