Metsä Board is set to withdraw entirely from the paper production business.
The paper and pulp company announced on Wednesday that it will discontinue paper production at its plant in Husum, Sweden, primarily at the end of 2015 as well as divest its coated and label paper production plant in Gohrsmühle, Germany.
The announced changes will leave the company without a single paper production plant.
Metsä Board in its announcement cites the poor profitability of its paper production operations as the main reason for its decision. Henceforth, the company will concentrate solely on the production of paperboard and increase its annual paperboard capacity from 1.4 million tonnes to over 2 million tonnes by 2018.
In Husum, Metsä Board will invest approximately 170 million euros in a new folding boxboard machine, which is scheduled to go into operation in 2016.
“These final steps of our transformation to a paperboard company allow us to grow significantly our core business and exit the weak paper production,” Mika Joukio, the CEO of Metsä Board, states in the announcement.
Metsä Board plans to finance the announced measures with a share issue worth roughly one hundred million euros.
Metsä Board is a part of Metsä Group, a Finnish forest industry group. The parent company of Metsä Group, in turn, is Metsäliitto, a co-operative owned by over 100,000 Finnish forest owners.
The measures announced by Metsä Board will leave its parent company without a paper production business. Metsä Tissue, however, will continue to produce tissue papers.
The announcement saw shares in Metsä Board increase by over five per cent in value on the Helsinki Stock Exchange on Wednesday.
Juhani Saarinen – HS
Aleksi Teivainen – HT
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Photo: Lauri Rotko