The former UPM newsprint mill was sold to Turkish group Eren three years ago.
Since then plans have been formulated and approved to turn the site into what will become the UK’s largest paper manufacturing facility, encompassing cardboard made from recycled paper, and tissue products.
The £1bn-plus investment is safeguarding 147 jobs at the site and is set to create a further 220 roles when fully commissioned.
The 85.6-hectare Shotton facility will be home to two advanced manufacturing operations: PM3 a cardboard paper machine, and TM1 a tissue paper machine.
Eren said that PM3 will be the largest single paper machine in the UK, with the capacity to produce 750,000 tonnes of container board per annum.
The first phase of investment is focused on TM1, which has an initial capacity of 67,000tpa but could be increased to 210,000tpa.
The UK and Welsh governments said the facility would help the UK transition to net zero, “creating jobs in green industries of the future”.
UK Export Finance (UKEF), the UK government’s export credit agency has provided £136m in support, alongside nearly £13m in funding from the Welsh government.
The UKEF support involves an 80% guarantee on a £170m financing facility arranged by HSBC and UBS for the project.
The funding was announced yesterday (26 September) ahead of the upcoming International Investment Summit that will take place on 14 October.
The plant will produce nearly 100% recycled paper and will have an environmentally friendly production model as it purifies its own wastewater, recycles and reuses it in the system.
Eren Holding said that an essential part of the circular economy initiatives at the site would be the installation of a hydrogen enabled CHP plant, generating low-carbon energy to sustainably power the mill's operations.
The Shotton project is expected to boost Welsh and UK exports in paper. The UKEF support has been offered on the understanding that Shotton Mill will export 10% of its turnover within five years.
It is also expected to reduce UK reliance on imports of paper.
Hamdullah Eren, senior board member at Eren Holding Group, commented: “Production at our new plant at Shotton Mill will be based on state-of-the-art technology, making this the most advanced paper campus in Europe.
“Our custom-built plant will deliver sophisticated and sustainable manufacturing solutions well into the 21st century.”
It also marks the first major Eren Holding capex project outside Turkey.
Eren said the Deeside location was ideal for the group’s growth ambitions.
“We are putting down deep roots on a site of historic industrial significance. We believe this new plant will bring prosperity, leadership in our industry, and long-term employment prospects that will be the pride of Deeside, Wales and Türkiye.”
Business and Trade Secretary Jonathan Reynolds described the deal as a massive vote of confidence in the Welsh economy, and the government’s ambitions to make Britain the destination of choice for investments in the industries of tomorrow.
“This transformative investment will not only support local skilled jobs but raise living standards in the community.
“The deal being announced today is testament to what can be achieved when the Welsh and UK governments work hand in hand,” he stated.
“We’re also proud to celebrate National Manufacturing Day, where we recognise the tremendous innovations taking place right across the sector, not least here in Shotton Mill.”
Cabinet ministers from both the UK and Welsh government visited the site to meet with members of Eren Holdings.
The UKEF support was issued under its Export Development Guarantee product, which helps UK exporters to access high-value debt facilities.
