Supporting bioeconomy through modernisation of pulp and paper mill in Portugal

The project promoter, Navigator Group, headquartered in Portugal, is a leading manufacturer of Bleached Eucalyptus Kraft Pulp - a renewable, wood-based fibre used as feedstock for paper, hygiene products, packaging and other bio-based materials. Navigator Group is also a leading producer of uncoated printing and writing papers in Europe and energy from biomass in Portugal, and has a strong track record of professional management and successful business integrations. It has sales to over 130 countries across five continents and exports 90% of its production from Portugal. The round wood, used as the feedstock, is sourced from sustainably-managed forests that meet international forest certification standards (FSC or PEFC). The promoter is the largest private manager of forests in Portugal, with approximately 118 000 ha under its management, of which 65 000 ha are its own forests.

The project was to modernise and upgrade the existing Cacia (Aveiro, Portugal) pulp mill to increase its overall resource efficiency and fibre output capacity, while upgrading its emissions abatement systems and increasing its renewable power output capacity. Besides a 43 000-tonne (14%) increase in the annual fibre (pulp) production capacity, the project significantly contributes to renewable electricity production in the Cacia mill, which is over 200 GWh per year.

The project responded to the globally strengthening demand for renewable fibre that is expected to continue for the following reasons: first, as living standards improve, China is set to become the largest market for pulp in the world, potentially accounting for over one-third of global demand in the coming years; second, e-commerce is increasing demand for sustainable alternatives to plastic packaging; third, the ageing population in developed regions, such as the EU, is creating an increased demand for tissue and hygiene products.

The rationale for EIB intervention was to support the modernisation and upgrading of the existing mill, through reinforcing the mill’s environmental performance and sustainability, its resource efficiency and sustainable production of renewable power and fibre. The project safeguards existing jobs directly in the Cacia mill and indirectly in the upstream forestry management and wood logistics sector. Most of the jobs safeguarded are located in EU cohesion regions in Portugal.

The financing of the project involved a loan from the EIB of EUR 25 million, which at project completion represented 49% of the total project cost of EUR 50.6 million.