Largest investment in Slovenian paper industry in four decades launched

Sladki Vrh – A new production line at the Paloma hygienic paper factory has been officially launched. Worth EUR 41 million, this is the largest investment in the Slovenian paper industry in the last 40 years.

The investment will make Paloma, a company from Sladki Vrh near Maribor, a competence centre for high-quality tissue products within the Slovak SHP Group and a leading manufacturer in the region, according to CEO Richard Žigmund.

He also said that the increase in production capacity will meet increased demand in the markets of South-Eastern Europe, Germany, Austria and Switzerland.

The investment was a logistically challenging project, in particular due to the transport of components for the new paper machine from Italy to Sladki Vrh.

At the beginning of March last year, the pandemic forced a temporary halt to the assembly of the new machine, but the project was soon resumed with the shutdown and dismantling of the old paper machine, which had been in use since 1977.

The new line will increase the company’s production capacity from 65,000 to 90,000 tonnes per year, thanks to the higher speed and width of the master rolls. At the same time, they will improve the quality of paper and finished products and reduce operational risks.

The investment in Paloma’s technical modernisation includes a paper machine with a production speed of up to 2,000 metres, which means a daily production of 220 tonnes.

SHP Group is a leading manufacturer of hygiene paper products in Central and South-Eastern Europe with revenues of over EUR 200 million, including sales under the Harmony and Paloma brands.

It employs over 1,800 people and is controlled by Eco Investment, a private holding company based in the Czech Republic, owned by Milan Filo. Paloma has been part of the group since 2017.

Filo announced that this was not the last investment in Paloma, as they plan to further expand production. A total investment of around EUR 100 million is expected.

The launch also featured Prime Minister Janez Janša. He recalled that in recent weeks, there has hardly been a day when a Slovenian company has not been opening new production facilities or laying foundations for new investments.

He said that the outset of the epidemic had shown in many Western countries that some things could not be taken for granted, as some countries had seen a shortage of hygiene products in the first few weeks of the epidemic despite their economic development.

“We have started to realise that it is not just recycled paper, but one of the symbols of civilisation. This has been a fact in Slovenia for 140 years, since Paloma’s beginnings, and in the future it will be even more important to have options of production at home and within the EU,” he said.

Economy Minister Zdravko Počivalšek said that the decision of the previous state owners to sell their stake to the Czech-Slovak owners had been correct, because their investments created 50 new jobs.

“Above all, the investment also means preserving the existing 500 jobs, which is a big step forward for this part of Slovenia,” added Počivalšek. He also assured that the state would continue with its efforts to support similar investors and investments.

Janša said the government would pursue a significant improvement of the business environment in Slovenia. He mentioned that the first of several anti-bureaucratic packages had already been proposed.

The packages will aim to significantly shorten procedures and eliminate red tape, while a comprehensive proposal for tax changes is also being considered.

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