M-real has decided to divest its Alizay mill in France and its Gohrsmühle mill in Germany or, alternatively parts of the Gohrsmühle separately. The closure of the mill in Alizay will affect 330 employees.
M-real has received several offers for the Alizay mill. None of the buyer candidates however fulfilled M-real’s conditions for entering into transaction, according to M-real. The production capacity of the Alizay mill is quoted at 310,000 tpy of uncoated woodfree and recycled office papers.
M-real has not been able to find a buyer for its Gohrsmühle mill, whether in parts or as a whole. M-real is planning to discontinue the unprofitable speciality paper businesses as well as the production of uncoated fine paper in Gohrsmühle. M-real will continue the profitable Chromolux business and investigate possibilities to start up a new customer service and logistics center for folding boxboard in Gohrsmühle, including a sheeting facility.
“We have done lot of work to find buyers for both Alizay and Gohrsmühle mills. We have been ready to accept a heavily negative sales price. Regardless, demands of buyer candidates have on the one hand been unacceptable from the company’s’ perspective, while on the other hand they have not been able to demonstrate capability to turn the unprofitable operations profitable, thereby guaranteeing the continuation of operations as a responsible owner and employer”, says M-real’s CEO Mikko Helander.
If the production closure measures are implemented as planned M-real’s annual sales is expected to reduce by approximately EUR 400 million, while the operating result is expected to increase by approximately EUR 70 million based on 2011 first half’s actual performance. Most of the annual financial impact is expected to materialize in 2012 with full impact from 2013 onwards.
