Myllykoski Paper to lay off one in three employees at Anjalankoski mills
Chief Shop Steward: It will scarcely be possible to operate machines with this size of staff
The paper manufacturer Myllykoski Paper in Kouvola in the southeast of Finland announced on Monday that it would launch co-determination talks on the need to lay off 140 employees without cutting back on activities.
The upcoming negotiations will affect all 450 employees at the Anjalankoski mills as part of a larger cost-cutting programme.
The company’s aim is to improve its profits by approximately EUR 30 million on an annual basis. The planned layoffs would cover around one-fourth of this scheme, says Juha Ebeling, General Manager of Myllykoski Paper.
Part of the need for job cuts could possibly be covered by outsourcing of operations.
”This and the potential numbers will be specified during talks”, Ebeling notes.
The finances of Myllykoski Paper have been in bad shape already for some time.
In the third quarter of the current year, the company’s net operating loss weakened further to EUR 16 million. In comparison, still in the corresponding period last year the profit was flat-lined.
The underlying factor behind the situation is the price competition of paper that has been tightening in recent years. Even the prices of raw materials and energy have been on the increase.
At the same time, Myllykoski’s debt burden has been growing.
The debts of the paper manufacturer, which in 2009 had an annual turnover of EUR 1.2 billion, are currently estimated at approximately EUR 1.0 billion.
”We are now doing what is necessary for the profitability of this mill”, says Ebeling.
According to the General Manager, the plan is to keep all the mill’s three paper machines operating even in the future, after manning reductions.
One of the machines was stopped at the end of November and the downtime is to last until the end of 2010.
Around 100 employees have been temporarily laid off, and the layoffs are to continue until the end of January, Ebeling reports.
Amidst the difficulties, Myllykoski Paper and the competing forestry giant UPM-Kymmene have been engaged in negotiations over a potential business transaction, through which Myllykoski and its German alliance partner Rhein Papier GmbH would be purchased by UPM-Kymmene.
As far as is known, the negotiations that were launched late last spring are still under way.
The reduction of staff is ”in no way connected” with this matter, according to Ebeling. The improvement of profitability is entirely the concern of the mill in question, he adds.
Nevertheless, it is common knowledge that Myllykoski, which is rich in tradition, would like to maintain its independence and keep the Anjalankoski mills.
The cost-cutting treatment would improve Myllykoski’s scope to acquire necessary funding over which the company has also been engaged in negotiations in the course of the autumn.
For the Anjalankoski employees, the news on job reductions came as a surprise regardless of the difficult times.
According to Chief Shop Steward Timo Byman, the staff was prepared for intensive cost-cutting measures, but not for anything on this scale.
”No one can understand such a high number. If so many employees were really taken out from our production, it would be impossible to operate the machines”, Byman argues.
According to the co-determination note, as many as 110 of the announced 140 employees are to be laid off from production, 20 from among the clerical workers, and 10 from among professional and managerial employees.
The precise situation will be specified when the co-determination talks have begun.
”The timing just before Christmas was really superb”, says Byman with undisguised irony.
The first to report on Monday on the news of Myllykoski Paper’s co-determination talks was the Finnish News Agency (STT), just before the company itself announced the matter.
FACTFILE: Myllykoski’s roots are in Anjalankoski
Myllykoski is an international paper group owned by the Björnberg family. The parent company was established in 1892 and its roots go back to the Anjalankoski mills.
Myllykoski manufactures wood-containing uncoated and coated publication papers, including newsprint.
Myllykoski’s production plants are located in Finland, Germany, and the United States.
Myllykoski employs a total of 2,700 people, of whom some 450 work in Anjalankoski.
About 90 per cent of Anjalankoski’s production of around half a million tonnes is exported.
Previously in HS International Edition:
Almost 4,000 employees affected by shutdowns at pulp and paper mills (4.10.2010)
UPM angling to acquire Myllykoski (28.9.2010)
Myllykoski Paper to reduce over 300 jobs (19.4.2006)
Myllykoski Paper press release 8.11.2010
Myllykoski Paper press release 13.12.2010 (in Finnish)