Stock exchange release
August 5, 2013 11:45 AM EEST
Metso's Pulp, Paper and Power business continues its cost reduction program to improve competitiveness
Metso Corporation's stock exchange release on August 5, 2013 at 11:45 a.m.
Metso's Pulp, Paper and Power business will continue its global cost
competitiveness program launched in April 2013 (stock exchange release on April
24, 2013) to adapt to changes in the marketplace. As part of the global program
- which targets an annual cost reduction of approximately EUR 100 million by
2016 - the business will begin statutory negotiations on personnel reductions in
several of its units serving especially the paper industry, but also the pulp
The Metso locations affected will be determined during the negotiation process.
Negotiations will be commenced immediately, and will affect all personnel
groups. In total the estimated amount of necessary headcount reductions are 750
positions primarily in Finland. Reduction measures will include e.g.
redundancies, internal transfers, early retirement options, terminations of
temporary contracts and temporary layoffs, closing of office and/or production
locations, if so decided as part of the negotiation process. The reduction
measures are expected to be implemented during the third quarter 2013.
The target is to achieve savings of approximately EUR 50 million in annual
operational costs as a result of the negotiations. It is estimated that the
savings will be realized in full as of the third quarter 2014.
The aim of the reduction measures is to bring production capabilities in line
with current and expected demand, and secure the businesses' global
competitiveness over the longer term. A lighter operational cost structure and
greater flexibility is essential.
"We have already implemented some measures and need to continue with the cost
savings to improve our competitiveness and profitability. Significant, permanent
structural changes in our paper machinery business' operating environment have
impacted our operations and undermined our competitiveness and profitability.
The demand for paper machinery is low and moving towards cheaper technology
solutions", says Pasi Laine, President of Metso's Pulp, Paper and Power
"The paper industry continues to be important to us as a business, despite the
slowdown in the printing paper machinery market. Board and tissue consumption is
continuing to grow moderately, and Metso's large installed base will offer us
opportunities to further develop our services business. A lighter cost structure
will enable us to compete more effectively in the marketplace."
In Metso's Fiber business line, that serves the pulp industry, measures are
taken to improve competitiveness and profitability. More efficient use of common
resources, connected to a move closer to major customers is therefore necessary.
"Because of these reasons we unfortunately must take such strong measures
affecting our employees", Pasi Laine says.
As part of the 100-million-euro cost competitiveness program the business
carried out statutory negotiations on personnel reductions in its Power and
Fabrics units globally earlier this year, resulting in annual cost savings of
approximately EUR 25 million.
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*.
*Pending Metso EGM approval.
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.
For further information for the press, please contact:
Pasi Laine, President, Pulp, Paper and Power, Metso, tel. +358 20 484 3200
Jari Vähäpesola, President, Paper business line, Metso, tel. +358 40 557 6627
(available after 3 pm)
VP, Investor Relations
NASDAQ OMX Helsinki Ltd