28 July 2021. The 600,000 tpy containerboard mill in Verzuolo, Italy will change hands. Burgo plans to sell the site to the Smurfit Kappa Group. Burgo's Avezzano mill remains unaffected by the move.

Italian paper manufacturer Burgo Group has surprised the market by announcing the sale of its containerboard mill in Verzuolo. Only in early 2020, the company concluded the conversion of the mill and the site's PM 9 from LWC paper to recycled corrugated case material. Now, the group has agreed to sell the mill, which has a capacity of 600,000 tpy, to the Smurfit Kappa Group (SKG). The purchase price was put at €360m. The transaction is expected to be closed in the fourth quarter of this year.

At the moment, SKG operates one paper mill in Italy - the Ania mill in the province of Lucca. The mill produces recycled corrugated case material on two machines with a combined capacity of 200,000 tpy. The Verzuolo acquisition allows the group, which also operates several packaging plants in Italy, to better serve its customers. "Verzuolo is highly complementary to SKG's existing business and is strategically positioned to serve both the Southern European region and other markets. It is a business that we had identified and have admired for some time," commented Saverio Mayer, CEO of Smurfit Kappa Europe.

Burgo will not exit the containerboard market
Burgo reports that it will continue to operate in the containerboard business with its Avezzano mill. The conversion of the Avezzano plant back in 2018 marked Burgo's entry into the containerboard market. The site formerly produced woodfree paper and was rebuilt to make recycled corrugated case material with a capacity of 230,000 tpy.

The company wants to continue to implement its strategic plan to expand its range of products. "Further investments will be dedicated to the development of higher value-added products for packaging and plastic subsitutes," the company reported. A leaner financial structure would help reach this goal, it said.

Burgo furthermore added that the transaction would allow it to accelerate the process of industrial restructuring initiated in 2020 with the entry of Quattro R in the shareholding alongside the Holding Gruppo Marchi. The two companies formed a joint venture and acquired a majority stake of 91 per cent in the Burgo Group.
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