KKagit

completed

Kipas is a well-known business group in Kahramanmaras Province, Turkey, with interests in textiles, cement, energy and agribusiness. In order to take advantage of the growth of the packaging industry in Turkey, Kipas is currently planning to invest in a EUR260 million recycled fiber based greenfield corrugated paper and cardboard facility with a capacity of 450,000 to 480,000 tons per annum depending on the product mix (“Project”). Kipas Kagit (“Company”), a Kipas subsidiary, will undertake the project. The Project will use 100% wastepaper as raw material. The Project will use recovered paper (RCP), old corrugated containers (OCC) and mixed waste paper, as raw material. The Project includes installation and operation of (i) Paper Machine (PM) - 1,536 ton/day gross, efficiency 85%, 350 days/year - corresponding to annual production capacity of 450,000 to 480,000 ton per year, (ii) Recycled Fiber (RCF) Plant - 1,500 bone dry tons/d - corresponding to Paper Machine production of 450,000 to 480,000 tons per year, and (iii) 50 MW (gross) coal-fired Circulating Fluidized Bed (CFB) boiler Combined Heat and Power (CHP) plant.The CHP plant will be a captive plant providing heat and power to the paper mill operation with high energy efficiency. The net electricity output of the CHP plant will be around 45 MW, of which about 33 MW of electricity will be provided to the Project, and 7.5 MW of electricity for the forthcoming expansion of the Paper Machine expected to be developed within a few years with additional 150,000 ton per year production capacity, resulting in the total electricity demand of 40.5 MW. The remaining generation capacity represents contingency over these initial estimates, to allow for production peaks and future capacity expansion from paper machine development. The CHP plant will also supply about 132 MW heat for the Project and the forthcoming expansion of the Paper Machine. The CHP plant will be fueled by a mixture of local coal procured from Turkish coal market and imported Russian coal. Being the combined heat and power operation, the overall energy efficiency of the CHP plant is estimated to be around 70%, much higher than the electricity only CFB boiler power plant. The ash and the flue gas treatment by-products will be 100% utilized by Kipas’s cement factory. The CFB boiler will have limestone injection plus flue gas desulfurization system to control sulfur dioxide emissions. The Project will be located in a small town of Kilili in the Turkoglu County of Kahramanmaras Province. The nearest village of Kilili is about 500 m from the site. The area of 328,000 m2 has been reserved for the Project and future forthcoming expansion. Out of 328,000 m2 land, 128,000 m2 of the land is owned by the Company, and 200,000 m2 of the land is currently leased from Kipas Holding subsidiary Maren Maras Elektrik Uretim A.S. The Company plans to purchase this plot at a later stage of the Project development. No physical relocation or economic displacement of people will be involved.The raw materials and products will be transported by about 350 trucks (owned and operated by third party service providers) to and from the Project site, which is located right next to the major highway (D825).The Project is expected to employ around 400 people during the construction phase and 300 people for the operational phase.