Arctic Paper Munkedals AB was founded in 1871. Pulp grinders were run with the help of the waterfalls in Munkedals' river for the manufacture of mechanical pulp. In 1890 the Mill changed over to chemical pulp and fine paper manufacture began in 1906. At that time there were six paper machines in operation and the factory had been provided with a steam engine so that production could be kept going even during dry periods.
In the year 1917, the total production capacity of the Mill was 10,000 tonnes/year. The factory was continually updated and modernised and the marketing organisation expanded. Munkedals AB exported to several countries in Europe, Africa, Asia and South America.
Despite great difficulties during and between the wars, Munkedals AB was able to maintain production due to its modern plant. The well-developed sales organisation also secured sales for the total production volume. In 1943, shipowner Haakon Onstad, became MD at Munkedals AB after having acquired a majority stake in the company. Under his direction the company expanded further and a group of companies was formed with Munkedals as the parent company. This has remained unchanged since 1943.
At the beginning of the 60s a modern paper machine - PM8 - was installed. Taking the environment and other reasons into consideration, the manufacture of sulphite pulp ceased in 1966. All of the old paper machines were also scrapped, except PM5 and PM8. A new era in Munkedals AB's history had begun.