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Holmen to Close Coated Paper Mill in Sweden by December

Aug. 14, 2008 - Holmen said that it will permanently close its Wargön Mill in Sweden by December 2008. The mill has a production capacity of 145,000 tons per year of coated paper.

According to Holmen, the mill has been unprofitable for some time and steep increases in the cost of wood, energy and other input materials have added to its finacial pressures.

Holmen said that it considered upgrading the mill, but substantial investment would still not be sufficient to reach an acceptable level of competitiveness and profitability.

“Unfortunately, we have not succeeded in breaking this trend despite the dedicated efforts of all the personnel and various measures in the form of investments, production increases, and product development in recent years," said Magnus Hall, Holmen's president and CEO. "Closing down Wargön Mill is the only rational decision and we regret that we have arrived at this conclusion

“The market for coated printing paper is highly competitive and Wargön Mill is one of the smallest mills in Europe manufacturing equivalent grades of paper,” Hall added.

Wargön Mill has about 340 employees and a turnover in 2007 of just under MSEK 900. Fixed assets in the business amounts to around MSEK 100.

The closure of the mill will also affect parts of Holmen Paper’s central organization and sales companies, but not the other mills, the company said.

Holmen Paper is one of Europe’s leading producers of newsprint and magazine paper with an annual output of some two million tonnes. Three paper mills in Sweden—Braviken, Hallsta and Wargön—and one in Madrid, have a total of some 2,700 employees. Turnover in 2007 amounted to just over SEK 10 billion.

SOURCE: Holmen




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