The Swedish paper group has reported a 33% increase in profits from 145.3m (SKr 2,194m) in 2000 to 193m.

Holmens operating profit was up 74% to 160m. The group attributed this to higher prices, positive currency effects and strong results from the Spanish newsprint mill acquired in July 2000. Its turnover rose 15% to 580m.

Holmen is also investing 265m in its Hallsta Paper Mill in Hallstavik in an attempt to make it one of the worlds most modern plants for high-quality newsprint and machine-finished magazine paper.

But the investment will lead to a 70-day shutdown while the mills old paper machine is dismantled in preparation for a new one.

Chief financial officer Anders Almgren said: "We will lose 40,000 tonnes of production, which will have a significant effect in terms of revenue and our overall volumes. But these costs will be spread over the first and second quarters."

Deliveries of newsprint were 2% higher in Q4 than Q3, but this was weaker than normal for the season. "Considering that the year is starting off at a weaker level its hard to forecast what lies ahead," added Almgren.

Prices for 2002 are currently under negotiation.

Iggesund Paperboard also suffered restrictions in production due to market conditions, but prices remain stable. Operating profit was down 20% to 30.1m.

Story by Rachel Barnes