Södra is to invest SEK 4 billion to increase the pulp production capacity of its Värö mill from 425,000tpy to 700,000tpy.
The investment will make the mill one of the biggest in the world in terms of softwood sulphate pulp production.
Lars Idermark, chief executive and group president at Södra, said: “This expansion is a vital part of our strategy and a must if we are to be able to develop our business.
“The paper pulp market is growing globally and now it will be possible for us to continue to grow together with our customers.”
He added the investment will reinforce the company’s market position.
“We already supply high-quality pulp to a number of different customer segments and we can now develop and underpin this.”
The investment will also make the mill more energy efficient.
Södra Cell Värö is already independent of fossil fuels during normal operation. If the environmental permit process goes according to plan, the expanded mill will be ready for commissioning in the third quarter of 2016.
The project will create the equivalent of 400 full-time jobs over a period of ten years.
In the long term, the investment will also create 20 or so new job opportunities at the mill and 220 job opportunities within surrounding businesses.