Metsäliitto increases its interest in Botnia (7 March, 2005)

Oy Metsä-Botnia Ab, a member of the Metsäliitto Group, has today decided to
invest in a greenfield pulp mill to be built in Uruguay. The mill will have an
annual production capacity of around one million tonnes of short-fibre pulp.
The raw material will be eucalyptus obtained from plantations. 

 

The total cost of the investment will be roughly USD 1.1 billion. The mill is
expected to start production in the third quarter of 2007. The project is being
carried out by Botnia S.A., a company owned by Oy Metsä-Botnia Ab (82.1%),
Metsäliitto (5.5%) and UPM-Kymmene Corporation (12.4%). Under a preliminary
agreement between Botnia and the Uruguayan company Otegui Group, the latter has
an option to acquire a 9 per cent shareholding in Botnia S.A. The option
becomes valid when the mill starts up and will then remain valid for a period
of seven years. 

 

In conjunction with the investment decision, Metsäliitto Cooperative has
purchased an 8 per cent shareholding in Oy Metsä-Botnia Ab from M-real
Corporation for EUR 164 million. Following the transaction, the Metsäliitto
Group's shareholding in Oy Metsä-Botnia Ab remains at 53 per cent, but of this
M-real's share is now 39 per cent and Metsäliitto Cooperative's share is 14 per
cent. 

 

The Uruguay project affords the Metsäliitto Group an excellent opportunity to
be part of a pulp mill that will be one of the world's most efficient in terms
of production costs and for which supplies of wood raw material have been
secured by years of painstaking preparation. The mill's fibre raw material,
which is suitable for fine paper production, is not available either in Finland
or in nearby countries. 

 

 

For more information, contact

 

Antti Oksanen, President and CEO, Metsäliitto Group

Kari Jordan, President and CEO, Metsäliitto Cooperative

tel. +358 1046 94262/ Riitta Laitinen, secretary