BillerudKorsnäs to Close Tervasaari Paper Mill by Q3 2016

The Tervasaari mill operates one paper machine and has the capacity to produce 100,000 tonnes per year of machine glazed (MG) paper Kraft paper.

Oct. 15, 2015 - BillerudKorsnäs announced that it will permanently cease production at its Tervasaari paper mill in Finland no later than the third quarter of 2016.

The decision was made after union negotiations and is based on unsatisfactory profitability levels, the company said.

The Tervasaari mill operates one paper machine and has the capacity to produce 100,000 tonnes per year of machine glazed (MG) Kraft paper, which is used in applications such as consumer bags, food packaging, envelopes and technical papers.

BillerudKorsnäs noted that the paper machine is unintegrated to pulp production which results in an unfavorable cost position, despite the fact that the machine is among the largest of its kind.

The mill employs about 55 people.

In August this year, BillerudKorsnäs started a feasibility study investigating among other things the potential of moving the Tervasaari machine to Skärblacka in Sweden. Skärblacka would offer integration of pulp production and, with the Tervasaari machine, Skärblacka would strengthen its position as one of the world's most efficient production units for white MG papers.

The study is on-going and will be finalized during the first half of 2016, the company said.

“The closure of production at Tervasaari is a first step in streamlining our production structure,” said Christer Simrén, COO and Executive Vice President, BillerudKorsnäs. “There is right now intensive work being done in the form of feasibility studies that will lead us in our further development of our production structure.

“The machine in Tervasaari is one of the largest of its kind and our staff has done a great job to improve profitability through creative ideas and committed efforts, but unfortunately this has not been enough due to external factors,” Christer Simrén added.

The closure will lead to restructuring costs of approximately SEK 100 million. These costs will be included in the reporting for Q3 2015 under “Other units,” BillerudKorsnäs said.

BillerudKorsnäs is a world-leading manufacturer of packaging papers, including: kraft and sack paper, liquid packaging board and cartonboard, and containerboard (fluting and liner). The company also produces market pulp. To learn more, please visit: www.billerudkorsnas.com.

SOURCE: BillerudKorsnäs