Rottneros Mill to Cease Groundwood Pulp Production, Improve CTMP
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Rottneros, Stockholm, Sweden, this week reported that it will immediately begin negotiations to terminate continuous groundwood pulp production at its Rottneros Mill in Sweden. The decision was due to the rapidly declining consumption of printing paper in Europe, the company said, which has led to a dramatic reduction in demand for groundwood pulp.
Rottneros Mill has about 100 employees, 50 of whom will be given notice of termination. CTMP production at the mill will continue, and "limited investments" will be made to improve quality for customers that manufacture board, while at the same time slightly increasing capacity.
In 2011, Rottneros announced, first, an improvement program that included staff reductions and, second, the book value of fixed assets was written down at Rottneros Mill. These measures have now essentially been carried out, "but unfortunately appear to be insufficient," the company noted.
The manufacture of groundwood pulp is expected to cease this winter, but the actual date depends on the outcome of union negotiations and also agreements with customers affected. Costs during the period of notice will be recorded on an ongoing basis and the book values of the groundwood mill have already been written down to zero, which in the current situation means that there is no intention of making substantial one-off appropriations.
"It naturally feels very sad to have to conclude that the market for this product is shrinking. Thanks to raw materials and the high level of professional skills at the mill, we are producing a select and leading product in terms of quality, but this is still not enough," says Ole Terland, President of Rottneros AB. "It is of course worse for our employees who have to leave us and we are therefore attempting to make the transition as smooth as possible," Terland concluded.
"The improved preconditions for CTMP will make us a leading manufacturer in terms of quality, primarily for the board and packaging segment, which is where we see the greatest potential for customer value," says Olle Dahlin, MD of Rottneros Bruk AB. "The production line for groundwood pulp is being left where it is, as it is not out of the question that demand could return, for example owing to changes in the supply of suitable recycled fibers. This will result in an opportunity to alternate staff between the two production lines, thereby generating flexibility," Dahlin said.
The cut-backs at the groundwood mill will not affect preconditions for the production of packaging within SilviPak and likewise for the potential manufacture of "green" vehicle fuel at Rottneros Mill.
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