Rottneros to Reduce Staff at Pulp Mill in Sweden

Rottneros Mill, Sweden.

Sept. 14, 2011 - Rottneros today said that it will reduce staff at its Rottneros pulp mill in Sweden. About 25 employees will be affected by the measure.

Negotiations with union organizations will begin immediately, Rottneros said.

In a written statement, Rottneros said, "The mill is running at a loss, primarily as a result of a weak market for both groundwood pulp and CTMP, which are the kinds of pulp produced at this mill.

"The Group does not envisage any rapid improvement on account of the weak growth on the part of our customers within the printing paper sector, which are the largest purchasers of the mill's pulp. Rottneros Mill has taken downtime during the year and is planning further shutdowns during the autumn as a consequence of this weak market.

"These planned reductions form part of an improvement programme, which also includes changes to our range and other reductions in respect of production costs. It is intended that the cost of these measures be carried in the Group's result for the fourth quarter of 2011. Our objective is for these measures to be implemented gradually up to and including the summer of 2012."

Olle Dahlin, Managing Director of Rottneros Mill and Utansjo Mill, said, "It is regretful that we are compelled to take measures that have an adverse effect on our employees and their families, but we cannot continue to run the mill at a loss."

The company's plans to begin the production of refined biofuel at Rottneros Mill in cooperation with joint venture partners will not be affected by today's announcement.

The Rottneros Group's other manufacturing unit, Vallvik Mill, which manufactures chemical pulp, is showing good profitability, primarily on account of a strong market, the company added.

Rottneros Mill employs around 125 people and produces two grades of mechanical pulp, groundwood and CTMP pulp. The mill has a production capacity of about 170,000 tonnes. In 2010, the mill produced 138,500 tonnes.

SOURCE: The Rottneros Group