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M-real Concludes Negotiations for Closure of PM at Äänekoski

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M-real Corp., part of Metsäliitto Group, Finland, reports that it concluded statutory negotiations at its Äänekoski mill in Finland, and has now closed the mill's paper machine, which has a capacity of some 200 000 metric tpy of coated fine paper. To improve the profitability of its coated paper business, M-real started the statutory negotiations on November 9 regarding closure of the machine and conversion of the mill's sheeting capacity entirely to folding boxboard sheeting. The company released a stock exchange bulletin on November 2 concerning these plans.

Following closure of the machine at Äänekoski at the end of 2011, the mill's sheeting capacity will be converted fully to folding boxboard. Planning work related to the sheeting capacity conversion is on-going, the company notes..

Related to the closure, personnel reductions at the Äänekoski mill will total a maximum of 169 people. In close cooperation with local authorities, M-real says it will assist redundant employees to find new employment. In addition, M-real will also facilitate redeployment, if possible, by offering employment opportunities internally within the company or other Metsäliitto Group's business areas.

M-real continues to produce coated papers at the Husum mill in Sweden, and the Äänekoski paper machine's reel production will be transferred to Husum. The annual coated paper capacity at Husum will be increased from 285 000 metric to 340 000 metric tons during this year.

Also in the future, M-real's coated papers will be sold by Sappi Fine Paper Europe. Based on the above measures, M-real's annual coated paper capacity is reduced by approximately 145 000 metric tons. M-real's annual sales will reduce by approximately EUR 60 million and the operating result will increase by approximately EUR 20 million based on the results of the coated paper production in 1Q – 3Q 2011. The full annual financial impact of the measures is expected to materialize from 2012 onwards.

Consumer Packaging's 4Q 2011 operating result includes approximately EUR 25 million non-recurring impairments and cost provisions related to the measures at Äänekoski. Total net cash impact of the measures is expected to be slightly positive when taken into account the reduction of working capital.


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