Study Predicts 17 Containerboard Machines in Western Europe Risk Closure
Nov. 10, 2009 - Some 17 containerboard machines in Western Europe face the possibility of closure in the next few years, forecasts a study by RISI.
The new study titled "The Western European Recycled Containerboard Risk of Closure Study" analyses the risk of closure for 85 mills and 120+ machines, each ranked by major criteria such as cost position, market prospects for the grade, future regional wood supply, corporate significance of the mill, machine age and machine size.
According to RISI, despite previous closures that took place last year through the beginning of this year, a further 1.2-1.9 million tonnes of closures appears inevitable over the medium term due to a combination of new capacity entering the markets, pressure from increasing production costs and softer domestic demand in Western Europe.
The study provides an independent perspective on which mills and machines may be affected, RISI said.
Orifjon Abidov, European Paper Packaging Economist at RISI, noted, "With about 1.2 million tonnes of low cost recycled containerboard capacity expected to enter the Western European market in 2010-2011, we expect downward pressure on operating rates and profit margins.
"Our capacity projections over the medium term assume operating rates at lower than historical levels, and we expect to see a number of machine closures," he added.