Metsä Group aims to use all production side streams as either materials or energy. This resource-efficient approach took another step forward when Montinutra Ltd announced the launch of a pre-engineering project for a new production plant alongside Vilppula sawmill. Montinutra is part of the investment portfolio of Metsä Group’s innovation company Metsä Spring.
The project’s launch was sealed with funding of EUR 7 million granted by Business Finland in January 2023. Business Finland is a Finnish public-sector business operator that offers internationalisation and funding services to companies.
The investment costs of the planned production plant are estimated at approximately EUR 20 million. Montinutra’s Managing Director Jaakko Pajunen describes Business Finland’s funding decision as a significant gesture from the public sector and a sign of strong support for the circular economy.
“Plant projects are huge investments. The funding from Business Finland lowers the threshold for other investors to fund this project and contributes significantly to its implementation,” he says.
Developing future biochemicals
The main raw material for the new production plant, due to be constructed next to Vilppula sawmill, will be spruce sawdust generated as a side stream at the sawmill and currently used mainly in bioenergy production. The production process uses hot water extraction, where the raw material is processed under high pressure and temperature. The zero-waste process features closed-loop water circulation and energy recovery.
“The forest industry has traditionally been focused on cellulose fibre. The other parts of the tree, more than half of which are hemicellulose and lignin, have received less attention. We will use these to develop future biochemicals,” says Pajunen.
In the first stage, the Vilppula production plant will be able to refine 10,000 tonnes of sawdust annually. Pajunen says Montinutra is prepared to double or triple production volumes later.
“In terms of scalability, it is extremely important to have an industrial partner like Metsä Group that can safeguard the first part of our value chain. The fact that we do not have to build a raw material network from scratch gives a considerable boost to our scalability.”
A value proposition based on fossil fuel-free operations
Pajunen divides the biochemicals to be produced at Vilppula into four categories: sugars, lignins, fibre products and dust binding products. Montinutra will launch the products under its Boreal Bioproducts® brand.
“These are all new biochemicals, so we have intentionally opted for a broad development portfolio.”
Montinutra’s value proposition is based on fossil fuel-free operations, the circular economy and sustainability. The products can be used in technical chemistry to replace fossil polymers and reduce the carbon footprint of products. As their raw material consists of industrial side streams, production does not compete for land with food crops. In terms of sustainability, another important factor is that the origin of the raw material can be traced from end to end.
“Fossil fuel-free operations lay the foundation for our value proposition, but our products must also offer excellent technical performance. Being bio-based is not enough; we must also match the performance of competing products.”
Montinutra’s value proposition is based on fossil fuel-free operations, a circular economy and sustainability.
Metsä Spring one of the investors
Metsä Group’s innovation company Metsä Spring aims to develop new business linked to wood-based value chains. This effort encompasses investments in promising start-up companies worldwide as well as promoting the company’s own pilot and demo projects.
“Metsä Spring supports the growth of Metsä Group’s business ecosystem. We are a strategic investor and innovation promoter in the wood-based circular bioeconomy,” says Katariina Kemppainen, Metsä Group’s SVP, Group R&D.
At the beginning of 2023, Metsä Spring had four portfolio companies. It began cooperating with Montinutra two years earlier when Metsä Spring made an equity investment in Montinutra.
“We had been following Montinutra for quite a while, and when the company set its sights on producing higher volume products from hemicellulose, we decided that the time was right for deeper cooperation,” says Kemppainen.
A host of potential uses
Kemppainen says that interest in bio-based products that can replace fossil raw materials is growing strongly in various industries.
“Currently, it is very important to find bio-based alternatives for fossil raw materials, and a lot of work in the field is underway.”
She points out that Montinutra’s Boreal Bioproducts® offer stabilising and emulsifying properties that are suitable for various coatings as well as other purposes. The emulsions used in the cosmetics industry offer numerous applications.
The technology risk related to production scalability is regarded as moderate in Montinutra’s case.
“Technology risk is often a big question mark for start-up companies, but Montinutra has conducted several pilot projects and successfully avoided scalability pitfalls. In fact, their technology risk is actually quite small.”
Aiming for high volume business
Kemppainen sees the upgrading of sawdust as a good example of resource-efficient wood use that converts production side streams into a variety of bioproducts.
“The sawdust fraction left over from the process is still an important source of bioenergy and supports Metsä Group’s goal of giving up fossil fuels.”
She sees no obstacle to Montinutra developing from a start-up into an important operator in the next few years.
“Of course, we would like to see Montinutra develop into a volume business, where production is not limited to Vilppula. Growth may also come from another raw material such as bark.”
“The commercialisation of a new bioproduct is always a challenging process that requires patience and competence in many fields. However, Montinutra has always had an extremely competent team.”
This article was originally published in Timber Magazine issue 2023.