As part of their respective cost-saving programmes, Metsä Group and its subsidiary Metsä Board plan to restructure tasks and operations, and reduce workforce across several operating countries. Together, they will cut several hundreds of jobs, the majority of which will be eliminated at operations in Finland. Statutory negotiations with employee representatives are said to be initiated in accordance with each country’s legislation.
According to preliminary assessments, Finnish forest industry group Metsä Group intends to reduce 800 jobs, 540 of them in Finland. The group cited weaker demand amid global trade uncertainties, higher raw material costs and unfavourable exchange rates as factors weighing on profitability.
Metsä Group’s €300m cost-savings and profit improvement programme places special focus on reducing procurement and logistics costs, as well as improving efficiency in the wood supply chain.
In addition, the group stressed the need to restructure and streamline operations, while underlining that "the negotiations will not include permanent closures of production units.”
"We operate in a capital-intensive business in which lower utilisation rates due to weak demand combined with clearly higher costs create an unsustainable equation that must be addressed,” said Jussi Vanhanen, President and CEO of Metsä Group.
Cost provisions related to the cost savings and profit improvement programme will be recorded in the result for the last quarter of the year, Metsä Group said.
Metsä Group employs about 9,600 people globally, including 5,600 in Finland. According to the Finnish daily Helsinki Times, the preliminary breakdown of planned reductions in Finland includes around 140 jobs in Espoo, 70 in Äänekoski, 60 in Kemi, 40 in Simpele, 35 in Lappeenranta and Joutseno, and a further 190 spread across other locations.
The planned reductions at Metsä Board, a listed company part of Metsä Group, are included in these figures, Metsä Group announced.
Metsä Board plans to cut up to 315 permanent positions, 155 of them in Finland. Statutory negotiations in Finland are scheduled to begin no earlier than 7 October.
"The change negotiations are based on production-related, financial, and operational restructuring reasons. The aim is to adjust the company’s cost structure, improve cash flow, enhance business operations, and strengthen the conditions for sustainable growth,” writes Metsä Board. One-off costs related to the possible changes will be recorded as items affecting comparability, and more detailed reporting will be provided after the negotiations are concluded.
Metsä Board stops pre-engineering investments at Husum and Kyro mills
As part of the €200m cost savings and profitability improvement programme, Metsä Board will also shelve pre-engineering investments at the Husum mill in Sweden and the Kyro mill in Finland. At the mill in Husum, the Metsä Board and Metsä Tissue were looking at the conversion of the PM 2 from the production of white-top kraftliner to food service packaging and siliconised greaseproof papers. The investment at the Kyro mill involved a project to improve the current performance of the current barrier board and expand its application areas. At the same time, the development of Metsä Group’s new business projects such as the Muoto (moulded fibre pacakging), Kuura (textile fibres from softwood pulp) or bio-based CO2 capture project will continue according to each project’s individual plan and schedule, the group announced.
