Rottneros to cut 25 employees at Rottneros, Sweden, pulp mill to reduce production costs, says mill operating at loss with weak markets for groundwood pulp and CTMP, plans further shutdown of mill in autumn

UPPLANDS VASBY, Sweden , September 14, 2011 (press release) – Today, the Rottneros Group has announced a planned reduction of staff that will affect about 25 employees at Rottneros Mill. Negotiations with union organisations will commence immediately. The mill is running at a loss, primarily as a result of a weak market for both groundwood pulp and CTMP, which are the kinds of pulp produced at this mill.

The Group does not envisage any rapid improvement on account of the weak growth on the part of our customers within the printing paper sector, which are the largest purchasers of the mill’s pulp. Rottneros Mill has taken downtime during the year and is planning further shutdowns during the autumn as a consequence of this weak market.

These planned reductions form part of an improvement programme, which also includes changes to our range and other reductions in respect of production costs. It is intended that the cost of these measures be carried in the Group’s result for the fourth quarter of 2011. Our objective is for these measures to be implemented gradually up to and including the summer of 2012.

“It is regretful that we are compelled to take measures that have an adverse effect on our employees and their families, but we cannot continue to run the mill at a loss,” explains Olle Dahlin.

Plans to commence the production of refined biofuel at Rottneros Mill in cooperation with joint venture partners will not be affected by the measures announced.

The Rottneros Group’s other manufacturing unit, Vallvik Mill, which manufactures chemical pulp, is showing good profitability, primarily on account of a strong market.

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