European packaging and paper producer Heinzel has successfully acquired UPM Kymmene-Austria.

As part of the deal, the company, which produces a range of papers for flexible packing, has bought 100% of the shares at the Steyrermühl paper mill and is expected to fully take over the building by 2024. Heinzel plans to operate the Steyrermühl site, founded in 1868, in conjunction with its existing Laakirchen mill, which is located less than three kilometres away.

Heinzel has stated that the site will become a ‘hub for sustainable packaging papers and renewable energy’ and is considering the production of packaging materials to complement its existing portfolio.

The transaction also includes more than 400 employees, one newsprint paper machine with an annual capacity of 320,000 tonnes, and the sawmill with an annual timber capacity of 370,000 cubic metres.

Massimo Reynaudo, executive vice president of UPM Communication Papers, explained, ‘The agreement benefits both UPM and Heinzel and supports the development of their businesses in line with market needs.

‘This agreement enables UPM to adapt its newsprint paper production to the long-term market development while leveraging the high value of the Steyrermühl site.’

UPM will continue newsprint production at its Schongau, Ettringen, Hürth and Jämsänkoski mills. It will also maintain operations as-is until the end of 2023 when it will cease the production of graphic papers in Steyrermühl.

Heinzel CEO Sebastian Heinzel said, ‘In Steyrermühl, we will be looking at complementing our existing products. We see great potential in the fast-growing markets for sustainable packaging papers.

‘We also plan to develop Steyrermühl into a supplier of sustainable and renewable energy.’

The cost of the deal, which is contingent on approval from competition authorities, has not been revealed.