Botnia to Significantly Cut Pulp Production in Finland

Jan. 7, 2009 - Botnia today announced plans for significant cuts in pulp production during 2009 which will affect 678 employees at its five mills in Finland.

A steep drop-off in demand for pulp in the latter part of 2008 has increased producer inventories and eroded pricing.

“The demand for pulp has decreased rapidly in connection with the recession in the global economy. The weak demand has lowered pulp prices and increased the producers' stock levels significantly,” the company said in a press statement.

Botnia said the pulp curtailments will affect all of the company's pulp mills in Finland: Joutseno, Kaskinen, Kemi, Rauma, and Äänekoski. The mills have a combined annual production of 2.7 million tons.

Botnia did not disclose the amount of capacity it plans to take out, but did say that curtailments would coincide with demand.

Not included in the press statement was Botnia's one million tpy eucalyptus pulp mill in Fray Bentos, Uruguay, which started-up in December of 2007. However, the mill did take 40,000 tons of market-related downtime in the last quarter of 2008.

The company has notified employees of layoffs during production shut-downs and will begin labor talks as required by Finland's Act on Cooperation in Companies on January 12.

Botnia is owned by M-real Oyj, Metsäliitto Osuuskunta, and UPM-Kymmene Oyj and is the second largest pulp manufacturer in Europe. The combined production capacity of Botnia's six mills is 3.7 million tons per year. The owner groups consume about 80 percent of the production and the remaining 20 percent is sold as market pulp.

SOURCE: Botnia

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