Schwarz confirms Stora mill buy was to secure supply chain

14 September 2022

Business

Schwarz owns supermarket chains Lidl and Kaufland. Image: Google Maps

The German owner of supermarket chains Lidl and Kaufland that has agreed to buy Stora Enso’s Maxau paper production site, has confirmed that securing supply of paper was one of the main drivers of the purchase.

It was revealed yesterday (13 September) that the acquisition of the Maxau site in Germany, which has around 440 staff, is planned to be completed for the beginning of 2023 at the latest.

Schwarz Produktion, part of Schwarz Group, said that as well as retaining the staff, it is intending to invest in the site, its maintenance, and the development of technical expertise as well.

In a statement, the company said: “By purchasing the mill, Schwarz Produktion ensures a reliable supply of environmentally acceptable and ecologically sustainable paper for the trading divisions within Schwarz Group. The produced paper is recyclable and biodegradable, and therefore in line with the company’s commitment to sustainability.

“Waste paper already serves as [the] main raw material for paper production in Maxau. Thus, Schwarz Produktion is also acting for the purpose of an eco-friendly circular economy.”

Jörg Aldenkott, CEO of Schwarz Produktion, said: “By purchasing the paper mill, Schwarz Produktion keeps on growing. Securing the supply of sustainable products and materials for the trading divisions within Schwarz Group is very important for us.

“The excellent transport connections in that area, the use of recovered waste paper and being nearly independent of energy as well as the professional expertise of the employees were the main factors for our decision to invest in Maxau.”

A paper industry source commented on the deal: “[Schwarz] have enough money to do this, and I suspect they are probably fed up after 12-18 months of paper mills 'behaving badly'. I do wonder if a collective of large magazine publishers may one day do the same with a coated paper mill – if they had the funds.”

Paper has been produced in Maxau since 1883 and the mill’s paper production capacity is currently around 500,000tpa.

The mill has direct connections to shipping and rail transport. It also has its own wastewater treatment plant and a power station. The plant generates more than half the electricity required with biomass by using heat-power cogeneration. It also creates 100% of the process heat the same way.

The enterprise value of the deal is approximately €210m (£182m).