Norske Skog to Cut Newsprint Capacity by 450,000 Tons
March 13, 2008 - Norwegian papermaker Norske Skog yesterday said that it got the go-ahead from an advisory group of shareholders and employees to cut its total newsprint production capacity by 450,000 tons.
The company said the move is due to excess capacity in the newsprint market that has resulted in weak pricing.
The capacity cut amounts to about 7 percent of the company's total global production capacity, and includes the following mills/paper machines:
- Permanent shutdown of Norske Skog Steti (Czech Republic) - 130,000 tons
- Indefinite shutdown of PM2 at Norske Skog Follum (Norway) - 130,000 tons
- Indefinite shutdown of Norske Skog Cheongwon (Korea) - 190,000 tons.
The timing of the individual shutdowns will be decided by Norske Skog's board.
Norske Skog is the world's second largest producer of newsprint after AbitibiBowater, and Europe's largest. The company is the world's fourth largest producer of magazine paper.
The world market for newsprint and magazine paper is about 60 million tons, and Norske Skog has about 10 percent and 5 percent of those segments respectively. The newsprint business accounts for 79 percent of the company's total EBITDA, while magazine paper brings 21 percent.
SOURCE: Norske Skog, and Reuters