Burgo says PM 2 closure is necessary due to shrinking coated mechanical paper demand and weak cost position of the LWC paper machine.
Italy's Burgo Group plans to permanently cease LWC paper production on the PM 2 at the Duino mill near Trieste. The company announced it has already started consultations with employee representatives and was planning to close the PM 2 at the end of December.
Burgo blamed its decision on a continuous decline in coated magazine paper demand that has led the industry to cut capacities by approximately 2.5 million tonnes in the recent years. In addition, the company stressed the weak cost position of the PM 2 which could not be operated in a sustainable way any longer amid rising costs, raw materials and energy in particular.
Some 150 employees will be affected by the closure of the PM 2. Italy's CGIL trade union has condemned Burgo's decision to close the PM 2, especially as the paper market was showing clear signs of improvement over the last few months.