HEINZEL GROUP announces today that it has entered into a share purchase agreement with UPM to acquire UPM Kymmene Austria GmbH and its subsidiaries in Steyrermühl, Upper Austria. Together with Heinzel's Laakirchen Papier AG, which is located less than three kilometers from the Steyrermühl paper mill, the site will become a hub for sustainable packaging papers and renewable energy with closing of the transaction on January 1st, 2024. The deal is contingent on approval from relevant competition authorities.

At the site UPM today operates one paper machine for newsprint production, a sawmill, and a residue incineration plant co-owned with Heinzel's Laakirchen Papier. UPM plans to continue operations as-is until the end of 2023 when it will cease the production of graphic papers in Steyrermühl.

HEINZEL GROUP will use the time between signing and closing of the transaction to evaluate and, if feasible, plan and prepare a conversion of Steyrermühl's machines to the production of packaging papers. This evaluation will not only comprise the paper machine that is currently running, but also a second paper machine at the site which was idled by UPM in 2017.

HEINZEL GROUP today produces a range of papers for flexible packing (so-called kraft papers) and rigid packaging (so-called containerboard) at its sites in Pöls, Laakirchen, and Raubling. "In Steyrermühl, we will be looking at complementing our existing products. We see great potential in the fast-growing markets for sustainable packaging papers," says HEINZEL GROUP CEO Sebastian Heinzel.

Additionally, HEINZEL GROUP will consider developing Steyrermühl into a supply center for heat and energy for both the Laakirchen paper mill and the wider Laakirchen community. "We plan to develop Steyrermühl into a supplier of sustainable and renewable energy," says HEINZEL GROUP COO Kurt Maier. "The recent developments in Europe have shown us all how important it is to reduce our dependency on fossil fuels and gas."

The integration of Steyrermühl into HEINZEL GROUP will also create new opportunities for the mill’s employees. "At our neighboring Laakirchen mill, we have successfully shown that there is a future after the end of graphic paper production," says Thomas Welt, CEO of Laakirchen Papier AG. "And this future is based on sustainable packaging papers and green energy."