Norske Skog will take a step in its transformation towards a growing and high-margin business by converting two newsprint paper machines into renewable containerboard production, the company announced June 17.

The conversions at Golbey (France) and Bruck (Austria) will introduce 765,000 metric tons of competitive containerboard capacity to meet the growing demand for renewable packaging, the company says.

Norway-based Norske Skog will continue to be a supplier of all publication paper grades after the planned conversions. Newsprint capacity will be reduced, balancing the market for Norske Skog’s remaining European publication paper capacity.

Norske Skog plans to invest approximately 350 million euros (nearly $392 million) in the conversion project over an 18-month period starting in the second half of 2021.

“This is a milestone in Norske Skog’s strategy to become a leading European packaging producer through conversion of publication paper capacity. We will continue to optimize our broad asset base to diversify within high-growth fiber segments, and maximize cash flows from the publication paper business,” says Norske Skog Chairman John Chiang, who also represents the largest shareholder, Oceanwood.

Final investment decisions are planned in the first half of 2021 and the start of containerboard production in the first half of 2023.