M-real to Restructure Coated Paper Business
 Print this article | Send to Colleague
M-real Corp., Finland, part of the Metsäliitto Group, plans to restructure its coated paper business to achieve an approximate EUR 20 million improvement in annual operating results. Paper production at the company's Husum mill in Sweden will be reorganized. The mill's coated paper capacity will be increased from 285,000 metric tpy to about 340,000 metric tpy without material investments. The reel production of M-real's Äänekoski paper machine in Finland will be transferred to Husum.
The Äänekoski mill's coated fine paper machine will be closed and the sheeting capacity converted fully to folding boxboard sheeting. Statutory negotiations related to the possible closure of paper production and the development of sheeting capacity covering the whole of Äänekoski paper and board mills' personnel of approximately 370 people will begin on November 9. Personnel at the Äänekoski mills will be reduced by 180 maximum.
Currently, the Äänekoski paper mill has one paper machine with an annual capacity of approximately 200,000 metric tons of coated fine paper. After the planned closure of paper production, the paper and board sheeting operations at the site will be combined, increasing folding boxboard sheeting capacity and improving M-real's profitability, the company notes.
In the future, M-real's coated papers will be sold by Sappi Fine Paper Europe. Based on the planned measures, M-real's annual coated paper capacity would be reduced by approximately 145,000 metric tons. Its annual sales would be reduced by some EUR 60 million and its operating result would increase by about EUR 20 million based on the actual performance of coated paper production in the first half of 2011. The full annual financial impact of the planned measures is expected to be seen from 2012 onwards.
"Profitability of coated paper production is very weak due to the worsened market situation and the structural overcapacity in Europe. The situation is not expected to materially improve in the future either, due to which we are planning to reduce our coated paper production and to focus it to our most efficient unit in Husum where M-real has one of the most modern and efficient coated paper production lines in Europe. Husum is one of Europe's largest paper and pulp integrated sites, where productivity has been increased to a very good level thanks to successful improvement measures," says M-real's CEO Mikko Helander.
|
|
