Glatfelter Corporation recently announced that it is closing its Ober-Schmitten, Germany, facility due to the ongoing financial underperformance of the electrical and glassine specialty papers manufactured at the site. The actions taken are part of the Company’s turnaround strategy that is aimed at improving the financial p erformance of the overall business. The Ober Schmitten facility, part of the Composite Fibers segment, has approximately 180 employees and is located in Nidda, Germany, with an associated sales office in Suzhou, China. The Ober-Schmitten Economic Committee and Works Council were notified of the closure and negotiations regarding a compromise of interest and social plan will begin immediately.
“This site has faced continued challenges from escalating energy, raw material and labor inflation, increased competition, and most recently, declining markets,” said Mr. Thomas Fahnemann, President and Chief Executive Officer. “We increased prices for the electrical and glassine products in the fourth quarter of 2022 to avoid further losses and subsequently, we lost meaningful business to our competition. Through this process, it became evident that Glatfelter is unable to compete in this market without a significant investment to streamline operations and substantially reduce the site’s overall manufacturing costs for these non-core products.”
Mr. Fahnemann continued, “The decision to close Ober-Schmitten followed an extensive process undertaken by management to assess all options for the facility, including a potential sale of the operation. Unfortunately, all attempts to find a new owner who could invest in restoring the site’s long-term viability did not lead to a successful outcome. Today’s announcement was not taken lightly given the impact it will have on our employees, their families, and the overall local community. I want to take this opportunity to thank our employees for their years of dedicated service and many contributions to Glatfelter. In addition, we are grateful for the support of the regional and local community, especially the government officials, and know we can continue to rely on their support in the months ahead.”
Total estimated costs associated with closing the Ober-Schmitten facility will be dependent on the final social plan and related employee separation costs, along with shuttering the operation.