Norske Skog Discontinues Operations at Walsum Paper Mill

The Walsum mill has an annual production capacity of 205,000 tons of light-weight coated (LWC) paper.

June 9, 2015 - Norske Skog on June 5 announced that it has decided to discontinue operations at its Walsum paper mill in Duisburg, Germany. The mill has an annual production capacity of 205,000 tons of light-weight coated (LWC) paper.

The mill employs 291 people.

In a press release Norske Skog said, "In 2015, Walsum's cash flow to the Norske Skog group has been negative with up to NOK 10 million per month. Therefore, the board of Norske Skog has decided to discontinue operations at Walsum in order to prevent further losses for the group."

"Walsum has recently had a significant negative cash flow, a trend unlikely to reverse given the unfavorable cost position," said Norske Skog's CEO Sven Ombudstvedt. "In recent years, we have completed several improvement programs with respect to energy, raw materials, number of employees and the level of working capital without achieving profitability,"

In December 2013, Norske Skog closed the production at paper machine PM4, which had an annual production capacity of 225,000 tons. At the time, Norske Skog decided to continue production at the mill's second paper machine, PM10.

"Despite solid efforts from the employees, Walsum is in a loss position. Given the challenging market situation and the mill's high costs relative to competitors, it is very difficult to see a return to profitability," Ombudstvedt said.

According to Norske Skog, the market for publication paper has been demanding for an extended period. Capacity closures of more than 3.0 million tonnes in Europe and North America in 2014 and 2015, in Norske Skog's product segments, contribute to a better market balance, but do not improve the economic fundament of Walsum.

Norske Skog has therefore decided to end the support of the cash negative operations at Walsum. This has led the local management of Walsum to file for opening of insolvency proceedings with the local court in Duisburg.

The closure will not affect agreements that suppliers and customers have with other Norske Skog companies, and will have no effect on any of the other business units of Norske Skog, the company said.

With headquarters in Oslo, Norway, Norske Skog is one of the world's largest producer of publication paper, with 9 wholly and partly-owned mills and 22 sales offices and agents on five continents. To learn more, please visit:

SOURCE: Norske Skog