M-real to close its 200,000 tonnes/year coated fine paper machine at Äänekoski, Finland, mill by end of 2011, affecting 169 people; mill's sheeting capacity to be converted fully to folding boxboard

ESPOO, Finland , December 22, 2011 (press release) – M-real Corporation, part of Metsäliitto Group, has concluded the statutory negotiations at the Äänekoski mill. In order to improve the profitability of its coated paper business M-real started on 9 November 2011 statutory negotiations concerning the potential closure of the Äänekoski paper machine and conversion of the mill’s sheeting capacity entirely to folding boxboard sheeting. M-real released a stock exchange bulletin on 2 November 2011 concerning these plans.

Following the conclusion of the statutory negotiations, M-real has decided that the Äänekoski paper machine, with an annual capacity of approximately 200 000 tonnes of coated fine paper, will be closed by the end of 2011. The mill’s sheeting capacity will be converted fully to folding boxboard. Planning work related to the sheeting capacity conversion is on-going.

The related personnel reduction at the Äänekoski mill is a maximum of 169 people. In close cooperation with local authorities, M-real will assist redundant employees to find new employment. In addition, M-real will also facilitate redeployment, if possible, by offering employment opportunities internally within the company or other Metsäliitto Group's business areas.

M-real continues to produce coated papers at the Husum mill in Sweden. Äänekoski paper machine’s reel production will be transferred to Husum. The annual coated paper capacity at Husum will be increased from 285 000 tonnes to 340 000 tonnes during 2012.

Also in the future M-real’s coated papers will be sold by Sappi Fine Paper Europe. Based on the above measures, M-real’s annual coated paper capacity is reduced by approximately 145 000 tonnes. M-real’s annual sales will reduce by approximately EUR 60 million and operating result will increase by approximately EUR 20 million based on the results of the coated paper production in 1–3Q 2011. The full annual financial impact of the measures is expected to materialise from 2012 onwards.

Consumer Packaging’s 4Q 2011 operating result includes approximately EUR 25 million non-recurring impairments and cost provisions related to the measures in Äänekoski. Total net cash impact of the measures is expected to be slightly positive when taken into account the reduction of working capital.

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