M-real Corporation, part of Metsäliitto Group, has concluded the statutory negotiations at the Simpele mill. To improve the profitability of the mill M-real started on 24 September 2010 the statutory negotiations concerning the potential transfer of the Simpele speciality paper production and the consequent closure of the Simpele paper machine.

As a result of the negotiations the Simpele paper machine is expected to be closed by the end of the year. The related personnel reduction is to be maximum 70 people. M-real continues offering one side coated label papers and flexible packaging papers from the Gohrsmühle mill in Germany.

The planned actions are expected to improve M-real's operating result by approximately EUR 4 million per annum. As a result of the Simpele paper machine closure, Consumer Packaging's 4Q 2010 result will as non-recurring item include EUR 12 million impairment of fixed assets and a EUR 3 million provision for cash cost. The closure of the Simpele paper machine reduces European annual speciality paper overcapacity by approximately 50,000 tonnes.

In close co-operation with local authorities, M-real 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 businesses.

M-real has earlier announced investments of EUR 26 million to expand the folding boxboard capacity of the Simpele mill. The investment, expected to be finalised in the summer of 2011 will increase the annual folding boxboard capacity of the mill by approximately 80,000 tonnes.

Source: M-REAL CORPORATION

For further information, please contact:
Mika Joukio, SVP, Head of M-real´Consumer Packaging, tel. +358 10 463 3041