Sweden-based sustainable packaging materials and solutions provider BillerudKorsnäs is set to invest SEK5.7bn ($620m) at its site in Gruvön to meet the increasing demand for sustainable packaging solutions for food and beverages.

Under the investment plan, the company will build a new board machine and will rebuild the existing pulp mill at its Gruvön production site.

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Capable of producing 550,000t of board annually, the new machine will manufacture liquid packaging board, cartonboard, food service board and liner.

"Access to renewable raw materials from sustainably managed forests in the Nordic region was a key factor when evaluating different alternatives."

Construction of the machine is planned immediately, with plans to commission the same by the first quarter of 2019.

BillerudKorsnäs president and CEO Per Lindberg said: “This is a historical decision for BillerudKorsnäs.

“The stable market growth in liquid packaging board and other cartonboards, together with our unique expertise in this area, mean that we are perfectly positioned to satisfy global demand.

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“Access to renewable raw materials from sustainably managed forests in the Nordic region was a key factor when evaluating different alternatives.”

With the new investment decision, the company is further planning to streamline its production structure.

During the ramp up of the new board machine, BillerudKorsnäs will gradually relocate Gruvön’s paper production activities to other plants owned by the company.

The company noted that smart packaging solutions can reduce dependence on fossil fuels as well as reduce climate impact and littering, and increase food safety.

In September, BillerudKorsnäs made an undisclosed investment to purchase a minority stake in Norwegian innovation company Kezzler.

The investment was intended to help BillerudKorsnäs in continuing its innovative effort to meet the future packaging challenges.