Metsä Spring: investing in a demo plant for innovative textile fibres

In 2018, with its main partner, Metsä Group, a forest company based in Finland, planned a greenfield demo plant to convert Metsä Group’s softwood pulp into a novel textile fibre named Kuura™. The planning included technical engineering and a financing package. The investment decision was eventually made at the end of 2018. Notably, by 2024, Metsä Group has spent some €45 million in CAPEX and over €5 million in OPEX for this demo plant phase.

There have been at least three significant challenge areas. First, as new manufacturing technology is to machine and technology suppliers, one does not have the typical support they would have when planning an investment based on a known manufacturing technology. Second, demo and first-of-a-kind (FOAK) plants are at the bottom of the “Valley of Death” for new product development projects. In other words, finding co-funding for these phases is very challenging.

A demo plant investment is rarely profitable, while a FOAK plant often costs more than a second and third similar plant costs. Third, new manufacturing technology also means training new plant operators. This challenge is two-fold: teaching how the current technology works, teaching a new company culture that accepts failing and overcoming surprising problems. In its various phases, this endeavour has received public funding from the Finnish Government (Business Finland) and the Bio-based Industries Joint Undertaking (the predecessor of Circular Bio-based Europe Joint Undertaking).

More on Metsä Spring

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Metsä Group and Itochu establish a joint venture that builds an industrial demo plant to produce wood-based textile fibres

Metsä Group to launch a pre-study for a Kuura textile fibre mill

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• Category: Resources, Factsheets
• Tag: Catalonia, Bioregions-EIB Workshop 2024, Overcoming investment barriers in the forest sector