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Mercer enters European lumber market with German sawmill acquisition

Mercer International Inc., has announced that it has entered into the European lumber market as it has an agreement to acquire “substantially all of the assets” of Klausner Holz Thüringen GmbH, one of Germany’s largest sawmills. The deal also includes a biomass combined heat and power plant.

Mercer International Inc. is a global NBSK pulp manufacturing company and operates three modern kraft pulp mills including Zellstoff- und Papierfabrik Rosenthal GmbH (ZPR) in Germany (photo courtesy ZPR).

Mercer International Inc. is a global NBSK pulp manufacturing company and operates three modern kraft pulp mills including Zellstoff- und Papierfabrik Rosenthal GmbH (ZPR) in Germany (photo courtesy ZPR).

US-headed northern bleached softwood kraft (NBSK) producer Mercer International Inc., has announced that it has entered into European lumber market as it has an agreement to acquire “substantially all of the assets” of one of Germany’s largest sawmills. The deal, worth approximately US$55.1 million plus defined working capital of approximately US$9.0 million, also includes a biomass combined heat and power (CHP) plant, near Friesau, Germany.

– We are pleased to enter the European lumber sector, with the acquisition of one of Germany’s largest sawmills. The proposed acquisition also expands our existing presence in the biomass based electricity market and is in line with our long-term growth objectives, said David M. Gandossi, CEO for Mercer International in a statement.

Mercer International Inc. is a global pulp manufacturing company and operates three modern kraft pulp mills, Zellstoff- und Papierfabrik Rosenthal GmbH (ZPR) and Zellstoff Stendal GmbH (ZSG) in Germany and Zellstoff Celgar Ltd (ZCL) in Canada, that produce high-quality NBSK pulp, bioenergy and chemicals.

Plant ramp-up

It is Austria-headed Klausner Group’s Klausner Holz Thüringen GmbH facility in Saalburg-Ebersdorf that is being acquired. Built in 1992 the sawmill has an annual processing capacity of approximately 2.2 million m3 of roundwood to produce around 1.3 million m3 sawnwood and has a planer capacity of 0.8 million m3.

The sawmill, which supplies Mercer owned kraft pulp mill Zellstoff- und Papierfabrik Rosenthal GmbH (ZPR) in Blankenstein with woodchip, has been running at roughly 50 percent capacity. In return ZPR has supplied sawlogs to the Klausner sawmill.

– While we intend to ramp-up production upon closing, in the mill’s fibre region, major sawlog contracts are generally awarded on a yearly basis. As a result, we expect such production ramp-up to be materially increased commencing at the start of 2018. After such ramp-up, we currently expect to operate the facility to produce over 300 mmfbm (≈ 708 000 m3) of lumber per annum, said Gandossi.

The biomass CHP was built in 2009 and has thermal output of 49.5MW and 13MW electricity. The electricity is sold to the grid under the German feed-in tariff (FIT) scheme and contracted to 2029.

– This acquisition leverages our core competencies of wood procurement, production optimization and green energy production. We believe it presents a natural fit with our existing procurement activities and our expertise in biomass based electricity production, said Gandossi.

The transaction is subject to customary closing conditions, including receipt of requisite regulatory approvals, and is expected to complete around the beginning of the second quarter of 2017.

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