January 20, 2012 / 1:42 PM / in 6 years

UPDATE 1-Mercer to raise German mill pulp output

Jan 20 (Reuters) - Canadian pulp producer Mercer International said it plans to raise annual production at its Stendal Mill in Germany by 30,000 air dried metric ton.

The company, which produces and markets northern bleached softwood kraft (NBSK), said its expansion project -- Blue Mill -- is designed to increase annual capacity at the Stendal mill to about 675,000 air dried metric ton (ADMTs).

Mercer said it would also install at the Stendal mill an additional 40 MW steam turbine, which is expected to initially produce another 109,000 MWh of surplus renewable energy for sale.

It expects the project to deliver about $9.8 million of additional annual power revenue.

Post the Project Blue Mill project, the company is likely to produce about 760,000 MWh of annual surplus renewable green energy and generate about $84.5 million of associated revenue, Chief Executive Jimmy Lee said in a statement.

Project Blue Mill, which will start to generate power revenue in or about September 2013, will need about 40 million euros ($51.6 million) in capital expenditure over about 21 months. The project is eligible for 12 million euros of non-refundable German government grants.

The Stendal mill is a single-line NBSK pulp mill with an annual pulp production capacity of about 645,000 ADMTs. ($1 = 0.7757 euros) (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

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