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Metsä Group is investing approximately €25 million in a new production line for its Muoto fibre-based food packaging in Finland, while abandoning plans for a commercial Kuura textile fibre mill amid worsening global market conditions.

The new Muoto production line will be built at Metsä Group’s mill site in Äänekoski, Finland, alongside the company’s existing Muoto demonstration plant. Supplied by technology company Valmet, the line is scheduled to start up in 2028 and will have a nominal capacity of more than 100 million products a year.

Developed by Metsä Group’s innovation company Metsä Spring, Muoto is a fibre-based packaging solution made directly from wet wood pulp. The technology eliminates intermediate processing steps and produces lightweight products designed to combine stiffness and functionality.

The company says the packaging is intended for applications where fibre-based alternatives need to meet more demanding performance requirements, including serving and food packaging.

Niklas von Weymarn, CEO of Metsä Spring, said: “We’ve developed a competitive product and production concept for Muoto packaging that responds to the growing demand for fossil-free packaging solutions. Muoto supports Metsä’s ambition to develop new packaging innovations in collaboration with companies in the packaging value chain.”

Metsä sees growing demand for alternatives to plastic in selected food and packaging applications as a potential market opportunity for Muoto.

Von Weymarn said the products also meet the strict requirements of the European Union’s recently introduced Packaging and Packaging Waste Regulation (PPWR), which the company expects to support demand for fibre-based packaging alternatives.

The new production line was originally planned for Rauma, Finland, but Metsä has opted for Äänekoski because of the site's existing infrastructure, the presence of the Muoto demonstration line and lower investment costs.

The investment represents another step in Metsä Spring’s efforts to commercialise new products based on wood fibre and expand into markets beyond traditional pulp and paper applications.

At the same time, Metsä Group has decided not to proceed with its planned Kuura textile fibre mill in Kemi, Finland.

The project was designed to produce man-made cellulosic fibres for the textile industry. However, Metsä says significant global overcapacity has emerged in the market in a short period, particularly as new production capacity has been added in Asia.

The resulting pressure on prices has weakened the competitive position of responsibly produced, higher-quality fibres. Metsä also says there are currently too few customers prepared to pay a premium for responsibly produced textile materials.

As a result, the company does not believe the Kuura project has the prerequisites to continue in its current form.

While the commercial investment will not proceed, Metsä says the expertise developed through the Kuura project remains valuable and that it is exploring ways to make use of the technology and capabilities developed in textile fibres.

Metsä’s other innovation projects, including development of its lignin product and carbon capture technologies, are continuing as planned.