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Rottneros to Close Groundwood Pulp Production

Stockholm, Sweden, 23 May 2012 -- A dramatic reduction in demand for groundwood pulp because of declining printing paper consumption is forcing Rottneros to close groundwood pulp production at its Rottneros mill. Chemithermomechanical pulp (CTMP) production, however, is to be continued. The company decided to immediately commence negotiations with employee representatives.

The Rottneros mill has around 100 employees, 50 of whom will be given notice. CTMP production at the mill will continue, and limited investments will facilitate the development of quality for those customers that manufacture board, at the same time as slightly increasing capacity.

Rottneros tried to raise the efficiency of the mill repeatedly. In 2011, the company announced an improvement program that included staff reductions. The book value of fixed assets also was written down at Rottneros mill. According to the company, these measures have now been carried out, but appear to be insufficient.

Groundwood pulp production is to cease this winter, but the actual date depends on the outcome of union negotiations and agreements with affected customers.

“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,” said 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,” he said.

The company now intends to focus on CTMP production. “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," said Olle Dahlin, managing director of Rottneros Bruk AB.

“The production line for groundwood pulp will be 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.


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