Eco-Investment boss Milan Filo told reporters on Wednesday that the new production line is important for further development of the plant at Sladki Vrh, which employs 660 people.

It will also make SHP Group, Paloma's parent, the biggest producer of sanitary paper in Europe. Paloma will remain the group's centre for top quality products, and the leading brand in South-Eastern Europe.

The investment, which SHP Group chairman Rischar Žigmund says will reduce business risks and costs, and increase quality, is set to be launched in the first or second quarter of 2020.

The final price tag of the investment is not yet clear, as the company is still negotiating with four contractors.

Eco-Investment committed to invest heavily in Paloma when it took over the Slovenian company through a capital increase in 2016, and is already thinking about adding a new production line at Sladki Vrh.

Nevertheless, there was talk of dissatisfaction among employees over wages, but Paloma boss Thomas Reible said today that a deal was reached in April.

While not disclosing any figures, Žigmund said that his group had been hit by high prices of cellulose this year.

Last year, Paloma made EUR 1.3m in net profit on EUR 85.8m in sales revenue, down EUR 200,000 and EUR 1m from the year before, respectively.