Wizernes and Charvines paper mills in France up for sale. Information and consultation process with employee representatives already underway.
In view of the sharp drop in printing and writing papers volumes in 2013 and the continuing structural decline in 2014, Sequana is stepping up its efforts to transform Arjowiggins into a company with a focus on specialty business. Yesterday, on the occasion of its 2013 financial results presentation, the company has announced a restructuring plan for the Graphic and Creative divisions.
In the creative papers segment, Sequana plans to change Arjowiggins' current business model and concentrate the biggest part of the production at the Stoneywood paper mill in the UK. Arjowiggins' Charavines paper mill is to be sold or closed, in the case that no buyer can be found, according to the plan. Furthermore, Arjowiggins will reduce the number of shifts at the UK Chartham paper mill and refocus operations at the Spanish Gelida paper mill on the bookbinding market.
In addition, Sequana plans to exit the US market for graphic papers and consolidate production capacities of Arjowiggins' Graphic division at the Bessé-en-Braye and Le Bourray paper mills in France in order to "significantly reduce Arjowiggins's exposure to the standard coated paper segment." The plan involves the sale or closure of the 140,000 tpy Wizernes woodfree coated paper mill in France.
"Information and consultation procedure are under way with the relevant work councils regarding a comprehensive restructuring plan of the Graphic and Creative Papers divisions", said Sequana.
Weak graphic paper demand and asset impairment costs
weigh heavy on Sequana's 2013 results
2013 was a rather disappointing year for Sequana. Sales were down 8% y-o-y to €3,326m. Operating loss and net loss deepened to €246m (2012: €35m) and €301m (€123m). The company attributed the increase in net loss to €295m in non-recurring charges related to asset impairments and restructuring costs.
According to Sequana, Arjowiggins' results declined in 2013 due to lower printing and writing paper volumes, pressure on selling prices and a deterioration in the product mix. Antalis, Sequana's distribution arm, also suffered from lower volumes for printing and writing papers, "even though gross margin held up well thanks to the increasing contribution of Packaging and Visual Communications activities."
Sequana's Board of Director will recommend to the shareholders that no dividend be paid for 2013.