Holmen announced that it has signed an agreement to sell its paper mill in Madrid, Spain, including energy and recycled paper operations, to International Paper, PaperAge reported. Currently, the mill produces newsprint.

According to Holmen, IP will continue to produce newsprint at the mill until the second half of 2017, then begin a grade conversion project for the production of recycled containerboard. During this period, Holmen will sell the newsprint produced at the mill and continue to serve its customers.

“This transaction allows us to focus on developing our successful speciality paper strategy at our Swedish mills,” said Henrik Sjölund, CEO of Holmen.

Holmen is a forest industry group that manufactures paperboard, printing paper and sawn timber, and runs forestry and energy production operations.

“Holmen has the base in renewable forest and energy assets supplemented by industrial operations in paperboard, printing paper and sawn timber. After the sale of the Madrid mill, the printing paper operations have the potential to deliver good profitability,” Sjölund explained.