Metsä Group is investing €25 million in a new Muoto fibre packaging production line in Finland, while abandoning plans for its Kuura textile fibre mill as changing market conditions reshape the company’s investment priorities.
Metsä Group is moving forward with a major investment in fibre-based food packaging, committing approximately €25 million to a new production line for its Muoto™ packaging solution in Äänekoski, Finland.
The line is expected to start operations in 2028 and will have a nominal capacity of more than 100 million products per year, marking an important step from demonstration-scale development towards commercial production for the fibre-based packaging technology. The production equipment will be supplied by Valmet.
At the same time, Metsä has decided not to proceed with its planned Kuura textile fibre mill in Kemi. Taken together, the two decisions offer an interesting indication of how changing market conditions are influencing where the Finnish forest industry group sees the strongest opportunities for wood-based materials.
While the textile fibre project has been affected by global overcapacity and difficult market economics, Metsä sees growing demand for alternatives to plastic as creating new opportunities in packaging.
From Demo Plant to Commercial-Scale Fibre Packaging
Developed by Metsä, Muoto is a moulded fibre-based packaging solution manufactured from the company’s own wood fibres. It is produced directly from wet wood pulp without intermediate manufacturing steps and is designed to combine lightweight construction with stiffness and functionality.
Metsä says the technology can be used in applications including foodservice and more demanding food packaging, where fibre-based materials increasingly need to provide functionality traditionally associated with plastic packaging.
The new production line will be built alongside Metsä’s existing Muoto demo plant in Äänekoski. The group had previously considered locating future commercial production in Rauma, but ultimately selected Äänekoski based on existing infrastructure, production capabilities and investment costs.
For Metsä, the investment reflects what it describes as growing demand for fossil-free packaging solutions and a broader market search for alternatives to plastic in selected product categories.
Niklas von Weymarn, CEO of Metsä Spring, said the company sees a significant market opportunity emerging for Muoto as brands and packaging suppliers explore alternative material platforms. Metsä also expects European packaging regulation to support the commercial prospects of the technology, pointing specifically to the Packaging and Packaging Waste Regulation (PPWR) as a factor shaping future market demand.
Packaging Insights reports that Metsä views both customer expectations and regulation as forces that will continue to reshape the packaging market, as the company expands Muoto capacity and customer collaborations ahead of commercial production.
Why Metsä Is Stepping Back from Textile Fibres
The investment decision becomes more significant when compared with what is happening elsewhere in Metsä’s innovation portfolio.
The company has confirmed that the proposed Kuura textile fibre mill will not proceed in its current form, citing rapid changes in the global market for man-made cellulosic fibres.
According to Metsä, significant new production capacity — particularly in Asia — has created global overproduction and weakened the competitiveness of higher-quality, responsibly manufactured textile fibres. The company also notes that too few customers are currently willing to pay a premium for these materials.
Metsä says the expertise generated through the Kuura project remains valuable and that it will explore other ways of using the knowledge developed, but the planned mill investment itself has been shelved.
The contrast is notable. In textiles, additional global capacity has made it harder to establish an attractive business case for differentiated sustainable fibres. In packaging, by comparison, Metsä sees regulation, customer demand and the search for plastic alternatives creating room for new fibre-based solutions.
A Signal for the Fibre Packaging Market?
The two investment decisions should not necessarily be interpreted as a simple transfer of capital from textiles to packaging. Metsä has not stated that funding originally intended for Kuura is being redirected to Muoto.
Nevertheless, the timing provides a revealing snapshot of the commercial environment surrounding wood-based innovation.
Packaging is currently facing substantial pressure to reduce material use, improve recyclability and decrease reliance on fossil-based resources. At the same time, food packaging remains technically demanding, requiring materials to deliver protection, functionality, manufacturability and economic viability at industrial scale.
That combination creates opportunities, but also raises the bar for fibre-based alternatives.
By committing €25 million to a line capable of producing more than 100 million Muoto products annually, Metsä is moving beyond experimentation and testing whether its fibre-based technology can compete at a considerably larger commercial scale.
The decision therefore says something broader about the direction of packaging innovation: fibre alternatives are increasingly being evaluated not simply as sustainability concepts, but as industrial businesses that must prove they can satisfy both regulatory expectations and real market demand.
For Muoto, 2028 will represent an important milestone in determining whether that opportunity can translate into scale.
Image Credits: Metsä Group
