Ahlstrom-Munksjö plans to significantly improve the competitiveness of its one-side coated business at the Stenay plant in France
31 October 2018
Ahlstrom-Munksjo plans to significantly improve the competitiveness of its one-side coated paper segment. The company contemplates a plan to optimize its production capacity and product offering to meet the profitable demand and investigates the closure of one paper machine (PM1) in Stenay, France. Employee consultation processes will start on October 30, 2018, and are expected to be completed in January 2019.
One-side coated product segment, a part of the Food Packaging business in the Specialties business area, is a segment where the markets have significant overcapacity globally, especially in Europe and the company’s offering is not optimally aligned with the strategy of niche orientation in customized solutions.
While Ahlstrom-Munksjö has proceeded with key measures to improve the situation, the operating environment has further deteriorated mainly due to increased raw material costs.
By concentrating orders to the larger paper machine (PM3) at the Stenay plant, cost savings can also be achieved from higher raw material, energy and waste efficiency, as well as improved inventory management.
Annual impact of the planned turnaround program would be approximately EUR 13 million. Restructuring costs will be specified during the process.
The Stenay plant manufactures one-side coated grades for label and graphic applications as well as paper for the food packaging industry. The Stenay plant, located in the northeastern part of France, has approximately 200 employees.
“We regret the impact of the contemplated measures on our employees. However, in order to significantly improve our competitiveness, and in the light of the challenging market environment and given the machine capabilities we need to take severe measures. It is the only way forward for a sustainable future”, says Omar Hoek, EVP Specialties business area.
The Specialties business area produces materials for food and beverage packaging, laboratory filters and life science diagnostics, water filtration, tape products and medical fabrics. Within business area Specialties in France, the company has announced earlier this year an investment in rebuilding a converting line of sterilization wrap at the Pont Audemer plant. At Saint Severin plant, Ahlstrom-Munksjö is finalizing its investment to meet the growing demand for Genuine Vegetable Parchment (GVP) products used mainly in baking and cooking papers as well as in other food packaging solutions.
In France, Ahlstrom-Munksjö has some 1,800 employees, eight productions sites, two global R&D centers and a sales office. Measured by the amount of employees, France is the second largest country of operations in the Group after the USA and before Sweden.