Schweitzer-Mauduit to Reduce Workers at French Paper Mill

Sept. 11, 2009 - Schweitzer-Mauduit International today said that it is reorganizing its largest French paper mill, Papeteries de Mauduit SAS (PDM) in Quimperle, France, including plans to reduce employee levels in 2010.

Yesterday, Schweitzer-Mauduit notified employees at PDM of the initiation of consultations with the unions and the Work's Council regarding intended reductions of employment levels by 106 people, or 15% of the current workforce.

"The action at PDM being announced today brings nearer to completion the strategy to transform our base tobacco-related paper business to be more competitive," said Frederic Villoutreix, chairman and CEO.

"The expected reduction in employment levels at PDM, although regrettable in terms of the impact on the employees and communities affected, further advances this strategy and highlights our resolve to adjust the levels of our operations and the supporting overhead structure to achieve this more competitive position," Villoutreix said.

"The contemplated reduction of PDM employment levels, primarily among general staff, are made possible by the installation of an enterprise resource planning computer system as well as the now nearly concluded closure of the Malaucene finished tipping facility, both of which reduce administrative requirements.

"Following completion of the proposed actions, we anticipate PDM will achieve competitive cost parity among western European-based cigarette paper mills and thus better ensure its long-term viability," Villoutreix noted.

Schweitzer-Mauduit expects cash severance expenses associated with the reorganization to total about $14 million through the planned completion of the actions in the second quarter of 2010 and result in annual pre-tax savings of approximately $8 million with roughly half of this savings to be realized during 2010.

However, the company cautioned that the amount of the restructuring expenses, timing and ongoing benefits of the measures hinge on the meetings with unions and the Work's Council.

"To minimize the number of involuntary severances at PDM, we will first implement a plan for voluntary terminations and offer certain benefits to assist employees in finding new employment opportunities through training or other assistance. With today's announcement, SWM is now near the end of the five-year long restructuring of its base paper operations," Villoutreix said..

"No further restructuring actions are currently planned in our French operations. For SWM as a whole, we will continuously adjust our paper machine schedules to optimize efficiency and cost in response to changes in market demands and anticipate this will at most result in the idling of one higher cost paper machine between now and early 2010. We will continue to provide updates about any further restructuring actions as decisions are made," Villoutreix added.

About Schweitzer-Mauduit International
Schweitzer-Mauduit International, Inc. is a diversified producer of premium specialty papers and the world's largest supplier of fine papers to the tobacco industry. It also manufactures specialty papers for other applications. Schweitzer-Mauduit and its subsidiaries conduct business in over 90 countries and employ 3,100 people worldwide, with operations in the United States, France, Brazil, the Philippines, Indonesia, Canada and a joint venture in China.

SOURCE: Schweitzer-Mauduit International

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