Finnvera granted a buyer credit guarantee to support Valmet’s and Flootech's deliveries to Shotton Mill Limited in Great Britain
Finnvera has granted a buyer credit guarantee for a EUR 209.65 million loan to support Valmet's and Flootech's deliveries to Shotton Mill Ltd's cardboard factory in Great Britain. The loan has a 95 per cent guarantee cover. Valmet supplies the Shotton Mill factory with a cardboard machine, a tissue machine, and valves, while the Finnish company Flootech Oy supplies an effluent treatment plant.
The Shotton Mill factory, established in 1983 in North Wales, was bought in May 2021 by Eren Paper Ltd a subsidiary of the Turkish company Modern Karton. Shotton Mill was UPM's former printing paper plant, which is now being converted to produce tissue paper and cardboard made from recycled paper.
Modern Karton is part of the Turkish conglomerate Eren Holding, whose operations are divided into cardboard and packaging industry, energy industry, textile industry, and cement industry. Shotton Mill is Eren Holding's first major project outside of Türkiye. The deliveries guaranteed by Finnvera are part of the total investment of EUR 1.3 billion. When completed, the plant is estimated to be UK's largest and most modern manufacturer of recycled cardboard. The factory aims to produce 750,000 tons of recycled cardboard and 67,000 tons of tissue paper per year.
The financing arrangement has been done in cooperation with the British export credit agency UKEF, and the Swiss export credit agency SERV. The factory is expected to be completed in the middle of 2025. When Shotton Mill starts its operations, Eren Holding's annual paper manufacturing capacity will grow to 2.6 million tons and corrugated packaging manufacturing capacity to one million tons, making the group the third largest producer of cardboard and packaging in Europe.
Environmental aspects have been taken broadly into account in the project. The largest recycling facility in Great Britain operates on the site. Currently, Great Britain exports recycled cardboard abroad for recycling, after which the cardboard waste is imported back to Great Britain for sale. According to Eren Holding, the company will process a quarter of this exported waste cardboard to produce containerboard, which will then be used to make packaging and corrugated boxes. Shotton Mill will build a new effluent treatment plant and a water treatment facility on the site, which will enable minimum fresh water use during the operation. Also a new natural gas-powered CHP -plant will be established on the site, in addition to the existing biomass-powered CHP plant. The factory is also connected to the country's largest solar power plant Shotwick, whose energy can be used during maintenance work.
- Signing date of the Finnvera Guarantee Agreement: April 3, 2024
- Date of publication: January 7, 2025
- Name of the Guarantee Holder: UBS AG, Switzerland
- Name of the Exporter: Valmet Technologies Oy, Valmet Flow Control Oy, Valmet AB, Flootech Oy ja Nijhuis H2OK Ltd.
- Name of the Lenders: Banco Bilbao Yizcaya Argentaria, S.A., BNP Paribas Fortis; Credit Suisse AG; DenizBank AG; HSBC Bank Middle East Limited.
- Name of the Buyer and Borrower: Shotton Mill Limited, United Kingdom
- Name of the Guarantor: Modern Karton Sanayì Ve Ticaret A.Ş., Türkiye
- Project/Export transaction/Goods: Cardboard machine PM3, a tissue machine TM1, an effluent treatment plant and valves.
- Country of Export transaction/project: United Kingdom
- Credit amount EUR: 209.65 million.
- Credit period: 28 months + 8,5 years
- Percentage of cover: 95%
- ES-risk classification: A
- International standards applied in benchmarking: IFC Performance Standards 1-6 and relevant EHS Guidelines
- Contact point: [email protected]
- Environmental and social impact information:
The project involves the conversion and expansion of a previous newsprint mill into a containerboard and tissue manufacturing facility together with a combined heat and power (CHP) plant, located in an existing industrial zone in Flintshire, North Wales, United Kingdom.
The project’s key environmental and social risks relate to legacy contamination of soils as well as biodiversity since the project is in the vicinity of several sensitive areas.
The project was the subject of an Environmental and Social (E&S) due diligence study, which compared the project's environmental and social management process and documentation to the requirements of the IFC's Environmental and Social Responsibility (Performance Standards) and relevant EHS guidelines. To manage the identified risks and bring operations in line with the requirements of the standards, a plan of measures (ESAP) was drawn up. The project is considered to meet the objectives of the IFC Performance Standards when the measures recorded in ESAP are implemented.
