Stock exchange release
December 3, 2013 11:00 AM EEST
Future Valmet concludes statutory negotiations in its Energy and Fabrics businesses in Finland
Metso Corporation's stock exchange release on December 3, 2013 at 10:00 a.m.
Metso Pulp, Paper and Power's, the future Valmet's, Energy and Fabrics
businesses have concluded the statutory negotiations initiated on October
21, 2013 in Finland.
The process is part of Valmet's 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
the end of 2014.
As a result of the statutory negotiations concluded in Finland, the Energy
business will reduce its headcount by 172 positions in Finland. A reduction of
20 positions has also been implemented in other countries. The negotiations to
reduce the headcount by 120 positions in Sweden and an additional 20 positions
in other countries, which were announced earlier, are still on-going. The
decisions will be taken and the implementation of these measures will start
after the negotiations have been completed in the affected countries. Initially,
the estimated total headcount reduction in Energy business was 390 positions
globally, of which 220 are in Finland, 120 in Sweden and 50 in other countries.
The reductions in Finland will be implemented through redundancies, retirements
and terminations of temporary contracts. In addition to the position reductions,
temporary layoffs may be implemented in Finland during the latter part of 2013
and 2014, as required by the workload or financial situation of the company. The
possible temporary layoffs may affect all personnel groups.
As one of the cost reduction measures, the Energy business will downsize its in-
house boiler manufacturing in Finland and Sweden. In the Finnish production
facilities in Tampere, this means closing the production line in Messukylä by
the end of 2013 and reducing production capacity in Lahdesjärvi. In Sweden,
production capacity will be reduced in the Gothenburg workshop.
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 these cost reduction measures, the Energy business
aims to improve its financial performance, secure its long term competitiveness
and adjust to the continued challenging market conditions.
The competitive situation in the paper machine clothing and filter fabrics
markets continues to be demanding which has decreased profitability. The Fabrics
business is reorganizing its operations and lightening its cost structure in
order to improve its profitability and cost competitiveness.
As a result of the statutory negotiations, the Fabrics business will reduce its
headcount by 23 positions in Finland. A reduction of 10 positions has also been
implemented in other countries. The reductions will take place through
redundancies and retirements. Initially, the estimated total headcount reduction
was 35 positions globally, of which approximately 25 positions are in Finland
and 10 in other countries.
Implementation of the measures
In both businesses, the majority of the reduction measures are expected to be
implemented during the last quarter of 2013.
As a result of the cost reduction measures, the aim is to achieve savings of
approximately EUR 25 million in annual costs. It is estimated that the savings
will be realized in full as of the fourth quarter of 2014. The majority of the
consequent one-off restructuring costs are estimated to be booked during the
last quarter of 2013.
As part of the EUR 100 million cost competitiveness program, Valmet announced
reduction measures earlier this year, which will result in annual cost savings
of approximately EUR 75 million.
Valmet will provide a range of support measures for those affected by the
restructuring in Finland through its "Polku" employment support program, which
includes providing support for entrepreneurship, studying, re-employment, such
as job-to-job training, and relocation support.
The future Valmet Corporation is a leading global developer and supplier of
services and technologies for the pulp, paper and energy industries. Our 11,000
professionals around the world work close to our customers and are committed to
moving our customers' performance forward - every day.
Valmet's services cover everything from maintenance outsourcing to mill and
plant improvements and spare parts. Our strong technology offering includes
entire pulp mills, tissue, board and paper production lines, as well as power
plants for bio-energy production.
The company has over 200 years of industrial history and will be reborn through
the demerger of the pulp, paper and power businesses from Metso Group on 31
December 2013. Valmet's net sales in 2012 were approximately EUR 3 billion.
Valmet's objective is to become the global champion in serving its customers.
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 (0)10 672 0000
Jari Stålhammar, Head of the Fabrics business unit, Services business line,
Metso Corporation, tel. +358 (0)10 672 0000
VP, Investor Relations
NASDAQ OMX Helsinki Ltd