The groundwood line in Rottneros Mill to be closed down, CTMP production planned to increase significantly.

Following an extensive and long-term strategic analysis, Rottneros’ Board of Directors has decided to discontinue the production of groundwood pulp in Rottneros Mill as there are no prospects for long-term sustainable profitability. The decision means that about 40 people will be made redundant. The cost of the closure is expected to amount to approximately 60 MSEK. Production is expected to cease at the end of 2022, following the conclusion of trade union negotiations which are now beginning. The Group plans to invest 160 – 200 MSEK to significantly increase capacity and production in the mill’s CTMP line.

The extensive strategic analysis carried out by the company shows that the prospects for long-term sustainable profitability are insufficient for groundwood pulp. Partly due to the dramatically changed situation on the electricity market with very high and highly volatile prices as a result. Partly a structurally decreasing demand for the end products where groundwood pulp is used, mainly printing and writing paper, which makes it difficult to reach a sufficiently high price level.

In 2021, the Group’s production of groundwood pulp amounted to 64 000 tons, corresponding to 16 percent of Rottneros’ total production of 395 300 tons. During the same year, the groundwood line’s share of the Group’s net sales amounted to just over 10 percent, while the contribution, including electricity hedges, to the Group’s net profit was marginal. The costs for the closure, approximately 60 MSEK, consist mainly of redundancy costs and will be charged in the Group’s earnings for the third quarter. Only a minor part is write-downs of fixed assets.
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