Stock exchange release
September 18, 2012 10:00 AM EEST
Metso to adjust its Finnish operations in response to structural change and weaker demand in the paper industry
Metso Corporation's stock exchange release on September 18, 2012 at 10.00 a.m.
Metso is to begin statutory employer-employee negotiations on personnel
reductions and layoffs in several of its units serving the paper industry and in
its paper production service business. Negotiations will cover approximately
4,100 employees at Metso's Finnish units serving the paper industry. It is
estimated that reductions will affect a maximum of around 630 employees, with
around 150 positions likely to be outsourced.
"It's very unfortunate that we are forced to resort to such drastic measures
affecting our employees. They are essential to maintain our competitiveness and
leading position in a rapidly changing business environment, however," says Pasi
Laine, President of Metso's Pulp, Paper and Power business. "The negotiations
that we are now initiating are aimed at finding solutions to this situation,
together with our employees."
Personnel reductions are necessary because of the need to adjust the
manufacturing capacity of Metso's paper business unit to the permanent
structural changes that have impacted the business and weakened its
competitiveness and profitability. The main factors here have been the ongoing
reduction in in the demand for paper machinery, increasing demand for cheaper
solutions, growing competition, and the downturn in demand for foundry products.
The general climate of uncertainty in the global economy has also affected the
paper industry's appetite for new investments.
"The gains made by new communications technologies have weakened growth in the
consumption of printing and writing paper. As a result, the market for new
printing paper machines has slowed, while the demand for more economical medium-
sized board machines has continued. This global change in demand means that we
must adjust our capacity not only in Finland, but also abroad, including China.
The medium-sized machine segment is also of interest to smaller suppliers, which
makes competition here particularly tough. We have to be able to produce
cheaper, quicker, and more flexible solutions to survive in this market," says
The aim of the personnel reductions is to bring production capabilities in line
with current and expected demand, and secure Metso's global competitiveness over
the longer term. A lighter operational cost structure and greater flexibility is
essential. Outsourcing some operations will also improve Metso's ability to
adapt to changing workloads and focus on its core business.
"The paper industry will continue to be of great interest and importance to us
as a business area, despite the slowdown in the printing paper machinery market.
Board and tissue consumption is continuing to grow moderately, and Metso's vast
installed base will offer us opportunities to further develop our service
business. A lighter cost structure will enable us to compete more effectively in
the marketplace," continues Pasi Laine.
The estimated need for reductions at Jyväskylä, Järvenpää, Tampere, Raisio,
Juankoski, and Valkeakoski covers approximately 630 people in maximum, with
around 150 positions likely to be outsourced. Negotiations will commence
immediately and will affect all personnel groups. Reductions are expected to be
implemented during the first half of 2013.
The need for temporary layoffs will affect all personnel serving the paper
industry at Metso's locations in Jyväskylä, Järvenpää, Tampere, Raisio,
Juankoski, and Valkeakoski, approximately 3,500 employees in all. Negotiations
will commence immediately. The exact number of reductions will be determined on
the basis of the 2013 production situation and order book.
The target is to achieve savings of approximately EUR 30 million in annual
operational costs as a result of the negotiations. It is estimated that the cost
reductions will be implemented in full as of the third quarter of 2013.
Metso's pulp, paper and power professionals specialize in processes, machinery,
equipment, services, paper machine clothing and filter fabrics. Our offering and
experience cover the entire process life cycle including new production lines,
rebuilds and services.
www.metso.com/pulpandpaper, www.metso.com/power, www.twitter.com/MetsoPulpPaper
Metso is a global supplier of technology and services to customers in the
process industries, including mining, construction, pulp and paper, power, and
oil and gas. Our 30,000 professionals based in over 50 countries deliver
sustainability and profitability to customers worldwide. Expect results.
For further information, please contact:
Pasi Laine, President, Pulp, Paper and Power, Metso Corporation, tel.
+358 40 562 4339
Further information for investors, please contact
Harri Nikunen, CFO, Metso Corporation, tel. +358 20 484 3010
VP, Investor Relations
NASDAQ OMX Helsinki Ltd