Holmen to Shut Paper Machine 61 At Madrid Mill

Feb. 2, 2011 - Holmen Paper said that it will shut down PM 61 — the smaller of two paper machines — at its mill in Madrid, Spain.

Approximately 170 employees will be affected by the shutdown.

PM 61 has a capacity of 170,000 tonnes per year and produces coated magazine paper (LWC), as well as improved newsprint to a lesser extent. The capacity reduction is nearly 10 percent of the business area's total production capacity.

In recent years, the machine has seen low capacity utilization.

“We’ve been working to make PM 61 profitable for a long time now, both through cost savings and the development of new products. Our employees have made an excellent job, but we’ve been forced to concede that it’s not enough,” said Magnus Hall, president and CEO of Holmen.

“The machine is not sufficiently competitive to justify continued operation either in the short or long term. The decision is part of a strategy to focus our business on printing paper segments where Holmen Paper has high competitiveness,” Hall said.

Holmen acquired the mill in Madrid in 2000, by which time PM 61 had been operating for two years. In 2005 the mill expanded with the addition of PM 62, a new paper machine for large-scale production of newsprint.

After PM 61's closure, PM 62 will give the mill a capacity of 330,000 tonnes.

Holmen Paper operates three paper mills: Hallsta and Braviken in Sweden, and Madrid in Spain. The mills, combined, produce wood-containing uncoated and coated printing paper, mainly for daily newspapers, magazines, advertising matters and telephone directories.

After the sutdown of PM 61, total production capacity of Holmen's three mills will be 1.765 million tonnes per year.

SOURCE: Holmen