Management of Solombala pulpmill has decided to suspend production due to difficult financial situation of the mill. Unfavorable situation on sales markets and high degree of capacity wear have already made the company to stop production in late 2012.
Back then, Chairman Alexander Plastinin noted that demand is "below usual" and prices of the company's products on the global market remain weak, but there is a feeling that the bottom is reached and the situation “is not as dramatic as it was at the beginning of 2009, when demand was completely absent".
After a major overhaul of equipment in all manufacturing departments the company resumed production, but was not able to take it to normal production mode. "Given the shortage of working capital and difficulty of access to credit resources further financing of reparation and operations was not possible, so we decided to suspend production," the company says in a statement. According to the signed regulation, CHP plant #1, communications, department of biological treatment of industrial waste water, and fire service will continue to operate.
Currently 504 people are idled, while 712 remain at work.
The decision on the prospects of Solombala pulpmill will be taken later, after the management studies market prospects and financial situation and analyses conditions of the production equipment in detail.