The pulp mill came off on a poor start, with declining pulp prices. Most of the pulp was exported and director Henry Melhuus therefore proposed that Saugbrugsforeningen establish a paper mill. He hoped to reduce the volatility in revenue and that the company would do better in poor times. This resulted in a plan for a paper mill with two paper machines with a combined capacity of 10,000 tonnes, a new electrical pulp mill with an annual capacity of 12,000 tonnes, an expansion of the chemical pulp mill and an expansion of the power station. Total investments were NOK 4 million.