Norske Skog to close Follum paper mill

Norske Skog plans to close down the Follum paper mill in Norway. The company's corporate management has recommended to the board of directors to discontinue production at the Follum site by the end of the first quarter 2012 at the latest, Norske Skog says. Production at the Skogn and Saugbrugs mills is to be maintained at full capacity for the time being. The company blames its decision to close the Follum mill on low paper prices, high raw material costs and the appreciation of the Norwegian krone. In addition, the impact of electronic media has negatively affected Norske Skog's paper sales. "We unfortunately no longer need as many paper mills," says President and CEO of Norske Skog, Sven Ombudstvedt.

No alternatives to closure

Follum paper mill runs two paper machines and has 365 employees. The mill can churn out some 290,000 tpy of newsprint, magazine and book paper. Norske Skog says alternatives to the closure of the Follum site have been investigated, but no viable solutions could be found. At the beginning of November, Viken Skog, Norway's largest forest owners cooperative and the biggest shareholder in Norske Skog, has placed a bid to acquire the Follum mill for NOK280m. Viken Skog plans to develop the Follum site into a forest fibre-based industry cluster.