Rottneros to Permanently Close Spanish Pulp Mill

The Swedish pulp producer cited the high cost of eucalyptus in comparison with its competitors in general and in particular those in the Southern hemisphere, made the operation unprofitable.

The mill has been idle since December 2008.

A total of 155 employees will be impacted by the closure.

The Miranda mill produced sulphate pulp from eucalyptus wood and has an annual production capacity of about 149,000 tons.

Rottneros said that it has been trying to sell the mill for about a year, but high wood prices have created uncertainty among potential investors.

The company added that it has also worked with various Spanish authorities to try to come up with a solution for the mill, but efforts were unsuccessful. However, Rottneros noted in a written press statement that 'these efforts are continuing although the focus has shifted away from sulphate pulp production.'

“It is regrettable that we cannot continue to operate the mill in Miranda, but in the current situation it is not possible to resume operations," said Ole Terland, CEO of Rottneros. "The problem is primarily structural in nature and is not the result of the economic climate. The pulp and paper industry in Spain and Portugal is too large in relation to the wood supply, which is driving up prices in the long term to a level that is too high."

Terland also notes that energy costs are too high because the mill uses older technology and is relatively small. Also, energy prices are generally high in Spain.

According to the company, the mill operations and the company, Rottneros Miranda S.A., will be liquidated in accordance with Spanish insolvency laws.

SOURCE: Rottneros