Papier u. Kartonfabrik Varel invests in reconstruction of paper machine 4

Papier- u. Kartonfabrik Varel accomplishes significant investment end of 2010/beginning 2011 in reconstruction of its PM 4. After completion of complex reconstruction and maintenance measures, technical capacity of PM 4 will be above 300.000 to per year. Total capacity of paper output rises from 500.000 at present to 600.000 annuals tons at Varel. Reconstruction of machine enables also an enlargement of product assortment. At present PM 4 produces Wellenstoff and Testliner in the grammage range of 120 gsm to 220 gsm.

In addition to reconstruction of paper machine itself, also stock preparation unit will be upgraded in an ambitious program by Varel's engineers until summer 2011. After completion of all reconstruction measurements our refitted machinery will not only be able to produce our present set up in grades, but also to provide growing markets of white liners with paper grades on 100% recycled fibre basis. According our current planning about 50% of tonnage of PM 4 will be reserved for production of white grades. The newly designed scheme for PM 4 as a multi-product-machine will also enable our mill to produce high performance fluting grades and Kraftliner substitutes. Deckle is kept at 510 cm until futher notice, but all relevant components of machine are designed for 530 cm deckle. If trend to broader corrugators continues we could respond accordingly within the following years. PM 5 which came on steam in 2004 with its 560 cm deckle is already perfectly adapted to latest development in low-grammage corrugating papers markets. Our today's production volume in our grades JadeWelle and JadeLiner will nearly be kept constant after implementation of reconstruction due to enlarged total capacity.

Our product portfolio will be completed by our new investment and will enable our company to provide nearly the hole range of corrugating case materials for various corrugating applications requested by customers. Our large variety of products with remarkably high quality standards from one production site only is quite unique throughout Europe. Also our solid board division will be considered in our future investment scheme for further optimization of production. A large extend of products provided by a single supplier is one of our main customer engangements. Finally our mill will reach a capacity of more than 800.000 tons per year in paper and board products.

First step in latest investment cycle begins with expansion of power plant. A new steam turbine not only covers additional demand in electricity and steam related to increase of production capacity, but does also increase mills energy efficiency as well as reduction in emissions.

Energy savings have top priority with all investments made by our company. We consider energy as a critical cost factor for the paper industry within next years. Our new investments in reconstructing PM 4 and its stock preparation unit as well as upgrading our power plant directly target towards this challenge and will result in significant reductions is carbondioxide emissions. It is our belief that environmentally-friendly packaging solutions deserve to be produced from raw materials manufactured in a sustainable way. This is Varel's fundamental conviction and is evidenced by our companies policy for years.

Excellent delivery service and flexibility are focus of our customer-oriented business. In anticipation of higher tonnages in the near future we enlarge our warehouse facilities by 15.000 m² next year. This will enable us to store 50.000 to of finished board and corrugating paper products ready for dispatch on call-off-basis. We will also store a sufficient preproduction in this warehouse to serve our customers during reconstruction period of PM 4 with regularly required grades.

Volume of total investment of all described projects is about 100 mio. EUR and after finalisation of this challenging project 15 new full-time jobs will be created at our company. Supplier for reconstruction of PM 4 will be nominated within the next weeks. Our investment is an explicid commitment to Varel and its 415 employees (including 22 apprentices) as location for our mill, located close to the North Sea shore, in an area only poorly industrialised. Since 2004, including our latest project, about 250 mio. EUR will have been invested in our family-owned company.

Besides our well established markets in West- and East Europe, which we will supply with an enlarged product portfolio of corrugating papers within short, our new investment also strengthens Varels market presence in northern Europe as well as on various overseas markets, which are part of our sales territories. Among an economically turbulent environment Varel exported its products to more than 50 countries worldwide in 2009.

The construction of a deep water container port in Wilhelmshaven which reduces distance between mill and sea container terminals in comparison to ports in Bremerhaven and Hamburg used today and the projected motorway A 22 were additional aspects for owner families Dieball and Evers to decide for our investment. This enhanced infrastructure will allow further improvements in optimization of transport costs for most sales areas and therefore strengthens our competitiveness in favour for our customers within the next years.