Stock exchange release
October 21, 2013 10:00 AM EEST
The cost-competitiveness program of Valmet, the company to be formed in the demerger of Metso, will continue in the Energy and Fabrics businesses
Metso Corporation's stock exchange release on October 21, 2013 at 10:00 a.m.
Valmet, the company to be formed in the demerger of Metso (currently Pulp, Paper
and Power business), will continue its global cost competitiveness program
launched in April 2013 (stock exchange release April 23, 2013) to adapt to
changes in the marketplace. The global program, which has been speeded-up from
the initial schedule, targets an annual cost reduction of approximately EUR 100
million by 2015. In the third stage of the program the business will begin
statutory negotiations in Finland and Sweden on personnel reductions in its
Energy business, which is part of the Pulp and Energy business line and in the
Fabrics business, which is part of the Services business line.
In both businesses, the majority of the reduction measures are expected to be
implemented during the last quarter of 2013.
The target is to achieve a reduction of approximately EUR 25 million in annual
operating costs as a result of the negotiations. It is estimated that the
savings will be realized in full as of the fourth quarter of 2014.
As part of the 100-million-euro cost competitiveness program, the business has
announced reduction measures earlier this year, which will result in annual cost
savings of approximately EUR 75 million.
The competitive situation in the energy market continues to be challenging. The
energy market in Europe is impacted by the slow economy and political
uncertainty around renewable energy support schemes, while the market in North
America is impacted by the low price of natural gas driving utilization away
from biomass and coal. With this cost reduction program the Energy business aims
to improve its financial performance, secure its long term competitiveness and
adjust to the continued challenging market conditions.
The statutory negotiations in the Energy business will affect all personnel
groups in Finland and Sweden. The estimated total necessary headcount reduction
is 390 persons, of which 220 in Finland, 120 in Sweden and 50 in other
countries. In addition, there might be temporary lay-offs affecting all
personnel groups in Finland. The Energy business currently has a total of
approximately 1820 employees globally, of which 1030 in Finland, 470 in Sweden
and 320 in other countries. The estimated reductions are implemented for
financial, production and restructuring reasons.
Cost reduction measures include plans to down-size in-house boiler manufacturing
in Finland and Sweden. This plan could include the closing of the Messukylä
Workshop in Finland, and reducing the production capacity in Gothenburg, Sweden
and in Lahdesjärvi, Finland if so decided as a result of the negotiation
process. Other cost reduction measures will include e.g. redundancies, internal
transfers, early retirement options, terminations of temporary contracts and
temporary layoffs, outsourcing and centralizing work if so decided as a result
of the negotiation process.
The competitive situation also in the paper machine clothing and filter fabrics
markets continues to be challenging which has decreased profitability. The
Fabrics business will reorganize its operations and lighten its cost structure
in order to improve its profitability and cost competitiveness.
The statutory negotiations in the Fabrics business will affect all white collar
employees in Finland. The estimated total amount of headcount reduction is 35,
of which approximately 25 in Finland and approximately 10 persons in other
countries. The Fabrics business currently employs approximately 1300 persons
The cost reduction measures will include e.g. redundancies, early retirement
options and termination of temporary contracts if so decided as a result of the
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.
As of January 2014, Metso's Pulp, Paper and Power business will serve its
customers with an even more focused and competitive approach as an independent,
listed company, Valmet Corporation.
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 contribute to
sustainability and deliver profitability to customers worldwide. Metso's shares
are listed on the NASDAQ OMX Helsinki Ltd.
Further information, please contact:
Jyrki Holmala, Head of the Pulp and Energy business line, Metso Corporation,
tel. +358 20 14121
Sweden: Lina Stolpe, Managing Director, Metso Power AB, Pulp and Energy business
line, Metso, tel. +46 31 50 10 00
Jari Stålhammar, Head of the Fabrics business unit, Services business line,
Metso Corporation, tel. +358 10 404 9000
VP, Investor Relations
NASDAQ OMX Helsinki Ltd