In 2017, Laakirchen Papier will pass another milestone with entry into the growing packaging paper market.

For Laakirchen Papier 2016 was characterised by success. Moreover, in the wake of an investment project involving over EUR 100 million and entry into the containerboard market, in 2017 the Upper Austrian paper manufacturer is to conclude a complete reorientation.

Laakirchen Papier is one of Europe’s leading manufacturers of super calendered papers (SC paper) and despite challenging market conditions enjoyed a successful year in 2016. Moreover, with the planned entry into the packaging market during this autumn, the Upper Austrian paper producer has initiated a marked change of course. In future, company business will be based on two key segments, comprised by top quality SC paper with an emphasis on the printing of magazines and advertising materials for retailing companies, and lightweight containerboard for packaging. It should be stressed that the workforce is clearly in favour of this business strategy.
Since 2008, the European market for the high-gloss magazine paper used in the printing of magazines, newspaper supplements, catalogues and advertising materials has shrunk by roughly 25 per cent and prices have fallen steadily. Furthermore, owing to the continuing trend towards digitisation there is no visible sign of a reversal of this trend. However, by contrast the increase in online trading means that the packaging paper market is growing by 2 to 3 per cent annually.

As Mark Lunabba, the Laakirchen Papier AG CEO explains: “As opposed to the preceding year, in 2016 the SC market grew by 2.5 per cent. This was pleasing from the perspective of our company result, but does not constitute a market turnaround. Nevertheless, in spite of the fact that the print media are increasingly disappearing in favour on online publications, we are still convinced that they will remain of significance in the years to come. In addition, the retail branch continues to generate constant demand through its need for printed advertising. Therefore, in future we will focus to an even greater extent on paper qualities for the retail sector, which in the long-term will secure our position in the SC segment.”

Investments of over EUR 100 million secure the future
For the Upper Austrian paper manufacturer, the future production of lightweight containerboard represents a notable landmark in its roughly 150-year company history. Indeed, Mark Lunabba sees the consequences of the more than EUR 100 million investment programme as being extremely far-reaching: “Laakirchen Papier is on the verge of a transformation. For in the final analysis, entering the packaging market represents an enormous transition process for our entire organisation that extends all the way from raw material sourcing to production and marketing.”
Owing to the high degree of know-how transfer and the cooperation within the Heinzel Group, Laakirchen Papier now has the ability to break into a completely new market as a strong player in minimum time. This is due to the fact that Raubling Papier is providing the production and development competence for containerboard, Heinzel Sales has long possessed market access, and Bunzl & Biach represents a competent partner for waste paper procurement.

In particular, Franz Baldauf, the Laakirchen Papier AG CFO, is delighted by the support shown by the workforce: “In order to succeed, such a drastic reorientation requires commitment on the part of employees and during the past weeks and months this has been demonstrated to a remarkable degree. For us, this represents a clear indication of the high levels of identification of our personnel with the company and the path chosen for its future.”

In the course of the investment programme, the existing PM10 paper machine is to be converted to the production of lightweight containerboard using recycled paper as a basis and following complete machine enlargement, annual capacity will amount to 450,000t. Moreover, apart from the modifications to the PM10, in a parallel move the capacity of the PM11 is also being increased. In future this machine will produce the SC paper range, the smoothness, gloss and quality of which are to be enhanced by means of an additional calender. In years to come, Laakirchen Papier will have annual paper output in the region of 800,000t.
The investment programme is progressing as scheduled and the production of corrugated containerboard will commence during this autumn. Two-thirds of the contracts with suppliers and partners required for this major investment have been concluded and at present a new waste paper storage facility is undergoing construction on the company premises.
2016 had a challenging begin, but ended with market growth
For the Upper Austrian paper manufacturer the beginning of 2016 was characterised by the aftershocks emanating from the three-month loss of production due to fire. In addition, the second quarter of the year was marked predominantly by general slackness in the SC market and this resulted in a fall in mill output of around 7,000t. However, the second half-year saw highly satisfactory order intake and hence a positive turnaround, which culminated in a positive balance for the year as a whole.
Above all, the reduction in fixed costs in the course of an internal efficiency programme served to compensate for the deterioration in results. Sales revenues in 2016 will probably amount to roughly EUR 244 million.
Laakirchen Papier AG
Laakirchen Papier AG, which is located in Laakirchen (Upper Austria) specialises in the production and further development of super calendered, uncoated papers (SC papers) for the European market. The mill was built in 1867 as the “Trauntaler Holzstofffabrik” and since 2013 has been a subsidiary of the internationally operative Heinzel Group, which numbers among the largest producers of market pulp, corrugated containerboard and magazine paper in Central and Eastern Europe.
In 2015, Laakirchen Papier AG achieved sales revenues of EUR 234 million and on average employed a workforce of 514.
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Heinzel Group
The Heinzel Group, which is united under the Heinzel Holding umbrella, ranks with its industrial locations Zellstoff Pöls AG, Laakirchen Papier AG (both Austria), Raubling Papier GmbH (Germany) and AS Estonian Cell (Estonia) among the largest producers of market pulp, and magazine paper in Central and Eastern Europe. Moreover, since the beginning of 2016, corrugated containerboard has also been part of its range. The group’s Trading Business Area includes Wilfried Heinzel AG, a globally active pulp, paper and board trading company, and Europapier International AG, the leading paper merchant in Central and Eastern Europe. In addition, Bunzl & Biach GmbH is the largest and most important waste paper company in Austria and the no.1 wholesaler in Central and Eastern Europe. The Heinzel Group’s successful growth is based on the fulfilment of the highest customer demands with regard to quality and efficiency.
In 2015, the Heinzel Group achieved sales revenues of EUR 1,480.4 million and on average employed a workforce of 2,135.
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