Fibre Excellence files for insolvency amid mounting financial pressure
Fibre Excellence has filed for insolvency, declaring a state of cessation of payments as it is no longer able to meet its short-term financial obligations. The filing was submitted to the Toulouse Commercial Court, following the conclusion of a conciliation procedure. The company reported a liquidity shortfall estimated at several tens of millions of euros. While production continues at its Saint-Gaudens and Tarascon sites, the risk of liquidation remains unless a viable rescue agreement is reached with public authorities and its majority shareholder, Paper Excellence.
The company employs approximately 545 people across its two French mills and supports an estimated 3,000 indirect jobs. A court decision is expected regarding the potential opening of judicial restructuring proceedings later this month.
Rising costs and structural losses
The insolvency reflects a combination of sharply rising input costs and ongoing structural losses. Wood procurement prices have increased by around 50% since 2022, reaching approximately €100 per tonne. Given that nearly four tonnes of wood are required to produce one tonne of pulp, this has significantly increased production costs.
At the same time, Fibre Excellence reported losses of approximately €30 million in 2025 related to its electricity generation activities. Although the mills produce renewable energy from biomass, the regulated purchase tariff has not kept pace with rising raw material costs, resulting in electricity being sold below production cost.
Operational disruptions have further affected performance, including a five-week shutdown at the Saint-Gaudens mill in late 2025 and another stoppage at the Tarascon site starting in March 2026, reducing both output and cash flow.
Public support measures under discussion
In response to the situation, the French government approved a 20% increase in the electricity repurchase tariff in April, aimed at partially offsetting the structural deficit linked to biomass energy production. Additional measures under discussion include the rescheduling of public and social debt over a period of up to ten years, state guarantees covering up to 50% of future industrial investments, and the integration of the Saint-Gaudens site into the national carbon quota system.
Regional authorities have also expressed support. The Occitanie Region has indicated its willingness to consider a minority equity participation, while the Provence-Alpes-Côte d’Azur Region has signalled the possibility of cancelling a €2.3 million loan granted during a previous restructuring phase.
Uncertain outlook pending court decision
Despite these initiatives, Fibre Excellence stated that the measures are not yet sufficient to restore immediate solvency. The company emphasised that further analysis is required to assess whether the proposed support can offset the combined impact of high wood costs, weak pulp market conditions, and energy-related losses.
Although several industrial players have reportedly shown preliminary interest, no formal takeover offer has been confirmed. As a result, the company proceeded with the insolvency filing.
The Toulouse Commercial Court is scheduled to review the case today, with a decision expected on 27 April. Should judicial restructuring proceedings be opened, operations may continue while a recovery plan is developed. In the absence of a viable solution, the future of France’s only market pulp producer – and the broader regional forestry value chain – could be at significant risk.
