Holmen closes down newsprint machine at Braviken mill

Newsprint production on PM 51 to be discontinued due to difficult market conditions. Holmen Paper increases its focus in Sweden on specialty printing papers.

Holmen Group will close down the paper machine PM 51 at its Braviken mill near Norrköpping, Sweden. The newsprint machine would be stopped in the third quarter of this year, thus reducing newsprint production at the mill by 200,000 tpy, the company said. Some 180 employees would be affected.

Henrik Sjölund, head of Holmen Paper, said that the company had to shut down part of its newsprint production due to falling demand, pressure on prices, high costs of raw materials and not least the strong Swedish krona. Holmen said that its Swedish operations would increase its focus on specialty paper grades.

Following the completion of the restructuring programme, the Braviken mill will run two paper machines with a combined capacity of 600,000 tpy of specialty publication papers, providing jobs to an estimate of 360 people. Holmen's operating profits in the first quarter of this year are expected to be affected by an impairment loss on assets of about SEK100m and a provision for restructuring costs of SEK40m.

In the last couple of years, a number of paper producers took restructuring measures in order to adapt newsprint output to structurally declining demand and this trend seems to be continuing in 2013. In February, Burgo Group has permanently ceased production at its 160,000 tpy Mantua newsprint mill.

Stora Enso will close two newsprint machines at the Hylte and Kvarnsveden mills in Sweden in the second quarter of the year, reducing newsprint capacities by a total of 475,000 tpy. At the very end of 2012, the company had already ceased newsprint production on 180,000 tpy PM 1 at the Hylte mill.