Metsä exits losing paper segments, turns to board

Finnish board maker Metsä Board is exiting from several unprofitable paper businesses, and has concentrated the company’s production in linerboard and folding boxboard.

The production of uncoated paper reels at the Husum mill ended in July. The remaining inventory will be sold during the second half of the year.

Metsä Board is also planning to close down its wallpaper base machine PM3 and discontinue its loss-making wallpaper base manufacturing at the Kyro mill in Hämeenkyrö, Finland. The company will adjust and improve operations at the Kyro mill in order to increase its competitiveness.

Reporting on the company’s second-quarter results, Mika Joukio, CEO, stated: “The operating result for the second quarter of the year remained at the first-quarter level, as we expected. The development of our result was still affected by the start-up of the new paperboard production line at Husum and the lower prices of the start-up volumes of folding boxboard”.

Mika Joukio about the paper business

“Thus, we have fully exited the unprofitable paper business. From now on, we will focus on the production of lightweight and ecological fresh fibre paperboards according to our strategy. The investment programme at Husum was the last significant step in our transformation from a paper company into a paperboard company.”

Joukio commented that bottlenecks in the finishing area and a leak in the recovery boiler at the pulp mill at the end of the quarter decreased the production volumes of folding boxboard at Husum.

In its near-term outlook, the company stated that demand for paperboard is expected to remain stable in both Europe and the Americas. “European producers have increased their folding boxboard capacity, but a large part of this capacity targets the global market. The market prices of folding boxboard and white fresh fibre linerboard are expected to remain fairly stable or increase slightly.”