Södra to Divest Södra Cell Folla

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Södra Cell, Sweden, this week reported that it will divest the company’s Södra Cell Folla mill at Follafoss, Norway. The Follafoss mill produces CTMP (chemi-thermomechanical pulp), which has a variety of uses including the manufacture of tissue. Södra Cell is planning to leave the CTMP market beginning this November 1.

"We've been struggling to create profitability in CTMP for several years. In spite of all the measures we've taken, we've found it increasingly difficult to find a profitable market for what we produce," explained Gunilla Saltin, president of Södra Cell. Södra has used considerable resources to reverse the negative trend, including energy efficiency improvements, product development, and cutting the workforce.

"We've been trying for a long time to find a solution to make operating the mill profitable but we now have to accept that previous conditions for profitable CTMP production at Follafoss no longer exist. We deeply regret that this is the case," Saltin said. "The flexibility and creativity of Folla's employees have kept quality and productivity at a high level and they've fought valiantly to keep production costs low," she added.

The Folla mill produced 83,500 metric tons of pulp in 2011. Average annual production has been 107,000 metric tons. The mill currently has 51 employees. If it closes, a career transition process will be initiated that will include all employees.