Displaying items by tag: Mreal Corporation

Wednesday, 11 April 2012 08:00

M-real reduces its pulp surplus

M-real Corporation, a part of Metsä Group, has agreed to divest 7.3 percentage points of its shareholding in Metsä Fibre Oy to the Japan-based Itochu Corporation for EUR 138 million and approximately 0.5 percentage points of its holding in Pohjolan Voima Oy to Metsä Fibre for EUR 64 million.

The closing of M-real’s divestment of the 7.3 percentage point shareholding in Metsä Fibre is subject to German competition authority approval and it is expected to take effect by end 2Q 2012. Once the announced restructuring of the ownership of Metsä Fibre is completed, M-real owns 24.9 per cent, Metsäliitto Cooperative 50.2 per cent and Itochu Corporation 24.9 per cent of the company.

The divestment of the 7.3 percentage point shareholding in Metsä Fibre is done to reduce M-real’s pulp surplus and to further strengthen Metsä Fibre’s business especially in the growing Asian market. Once the transaction is completed, M-real’s pulp surplus reduces from approximately 0.5 million annual tonnes to 0.3 million annual tonnes.

After the 0.5 percentage point reduction of shareholding in Pohjolan Voima that took effect today, M-real owns approximately 2 per cent of the company.

M-real will in the 2Q 2012 Other operations’ operating result book as a non-recurring item a capital gain of approximately EUR 88 million related to the Metsä Fibre shares to be divested. The Other operations’ 2Q 2012 operating result will also include as a non-recurring item a realized fair value and gain of approximately EUR 40 million related to the divested Pohjolan Voima shares that does not have an impact on the company’s total equity. The divestments have a negative impact of approximately EUR 15 million on annual operating result compared to actual results in 2011. The divestments have an approximately 40 percentage point positive impact on M-real’s net gearing compared to end 2011.

“We are reducing our pulp surplus according to our strategy. The transaction with Itochu provides an excellent possibility to develop Metsä Fibre further and shows also the great value of our pulp assets. Also in the future we produce more pulp than we use, thus we continue to have a good platform to grow our profitable paperboard business. These divestments also strengthen the company’s liquidity without having a material impact on our operating cash flow,” comments M-real’s CEO Mikko Helander

Itochu Corporation is one of the largest trading companies in Japan with approximately 130 bases in different industries in close to 70 countries. Itochu Corporation’s trading volume for the fiscal year ended on 31 March 2011 exceeded EUR 100 billion. Further information of the company can be found on their home page http://www.itochu.co.jp/en/.
 
Annual General Meeting of M-real Corporation decided on 28 March 2012 to change the company’s business name to Metsä Board Corporation. The new business name is expected to be officially registered during April 2012. Before the official registration the company’s stock exchange releases are sent under the name M-real Corporation.  

M-REAL CORPORATION

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M-real Corporation, part of Metsä Group, announced on 19 January 2012 to renew its management and reporting structure to better reflect the company’s strategy and the focus on fresh forest fibre cartonboard. The company operates through two business areas that are also the company’s reporting segments from the first quarter of 2012 onwards:

  • Paperboard
  • Paper and Pulp

Paperboard business area includes the Kemi, Kyro, Simpele, Tako and Äänekoski board mills, Kyro wallpaper base machine and Joutseno BCTMP mill located in Finland as well as Gohrsmühle mill in Germany. Paper and Pulp business area includes Husum paper and pulp mill in Sweden, Alizay mill in France and Kaskinen BCTMP mill in Finland. As earlier announced M-real is planning to close the entire Alizay mill and the unprofitable operations at Gohrsmühle mill. The plans are expected to materialize in early 2012 that would improve the company’s profitability materially.

Accounting for the 32 percent ownership in Metsä Fibre (formerly Metsä-Botnia) will remain unchanged. The associated company result of Metsä Fibre will continue to be allocated to business segments based on their respective pulp consumption and is reported in EBITDA.  Roughly two thirds of the result impact of Metsä Fibre ownership is expected to be included in the Paperboard business area and the rest in Paper and Pulp business area.

The historical figures based on the new business area structure are presented in the tables below. In addition to the above listed mills, the historical business area figures include also discontinued and divested operations.

figures 1


M-REAL CORPORATION

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M-real Corporation, part of Metsä Group, has concluded the information and consultation process at the Gohrsmühle mill in Germany. In order to eliminate the severe losses of the mill, M-real started the negotiations with the workers’ representatives concerning the planned discontinuation of the mill’s uncoated fine paper and unprofitable speciality paper production. M-real released a stock exchange bulletin on 18 October 2011 concerning these plans.

Following the conclusion of the negotiations, M-real is able to make the final decisions to discontinue Gohrsmühle mill’s uncoated fine paper production and the production of the unprofitable speciality papers. As a result, M-real’s annual uncoated fine paper capacity reduces by approximately 120,000 tonnes and speciality paper capacity by 70,000 tonnes. The related personnel reduction of maximum 260 people will be implemented by the end of the second quarter of 2012. The level of redundancy costs is in line with the cost provisions made in the last quarter of 2011.

M-real continues the Chromolux business and is currently investigating possibilities to start up folding boxboard sheeting operations at the Gohrsmühle site.

Actions to establish a business park in Gohrsmühle continue together with the workers’ representatives and the local authorities with the target to create new jobs at the site. One of the alternatives is to find partners to the site to utilise the existing paper production and converting equipment as well as other site infrastructure.  An example of the successful implementation of the business park concept is the Reflex mill, where M-real was able to divest business units to different companies saving more than 200 jobs. Divestment of M-real’s last operations at the Reflex mill, the Premium Paper business, was finalised in mid-February 2012.

“We have reached a very important step in our work to eliminate losses of our paper business. Opportunities to establish a business park in Gohrsmühle are good,” says M-real’s CEO Mikko Helander.

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Commercial printers will soon be able to give customers enhanced print results at more competitive prices with ColorPRO Technology. This new technology will enable printers to achieve brighter colours, higher contrast blacks, sharper lines and finer detail on any printers that use pigmented inks.

ColorPRO Technology is applied to the paper during the production process. Treated papers ‘hold’ the ink at the surface of the paper, producing higher quality and more striking results. The technology also eliminates the need for bonding agents.

M-real’s Modo Jet PRO is one of the first papers to be made with ColorPRO Technology and will be part of the well-established Modo Papers range. Developed in conjunction with HP and Pitney Bowes, it has undergone extensive third party testing and is guaranteed for use on all HP Inkjet Web Presses and Pitney Bowes IntelliJet printing systems series printers, as well as any technology using pigmented inks.

Modo Jet PRO is suitable for all applications on uncoated, wood-free paper, particularly variable data print applications such as invoices and statements. From January 2012, Modo Jet PRO is available in 80, 90, 100 and 115 g/m2.

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Friday, 10 February 2012 10:00

Metsä Board opens an innovation centre

Part of Metsä Group, M-real Corporation, which Board of Directors proposes to the Annual General Meeting to be convened on 28 March 2012 a change of the company’s name to Metsä Board Corporation, is Europe’s leading fresh forest fibre paperboard producer. It has established a new R&D centre in Äänekoski, Finland. Its aim is to support customers in the packaging industry with R&D in product innovation; introduce applications of new raw materials from forest fibres; and study how its products can match rapidly-evolving printing and converting technologies.

The centre draws on experience from within Metsä Board and the whole Metsä Group. It will also collaborate closely with research institutes, universities and Forestcluster Ltd.

“We have relentlessly developed our paperboards, production processes and service to support customers in their business,” says CEO Mikko Helander. “At the same time, our work has achieved benefits in sustainability, for example, in the design of light but stiff boards and in production energy efficiency. Now we want to strengthen our R&D further and drive business forward based on new ideas, customer demand and feedback.”

The new R&D centre is commencing operations from February 2012, with the first research projects coming to fruition within two–three years. It is based at Äänekoski, a well-known forest industry locality in Finland, where Metsä Board has an existing cartonboard mill. It will use an established laboratory and employs a highly-experienced team of experts headed by Lauri Verkasalo, Director for Strategic Research.

The role of the R&D centre falls into these main areas:
- Doing research that leads to improvements in the paperboard products.
- Developing new technologies that will drive advances in cartonboard and liner products.
- Looking for applications based on new raw materials such as microfibrillated cellulose.
- Match developments in printing technology, such as digital printing, in order that paperboards continue to produce optimum results. The centre may also respond to topical issues as they arise, such as mineral oil hydrocarbon migration from printing inks.
- Work on specific win-win co-projects with customers.

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M-real Corporation, part of Metsäliitto Group, renews its management and reporting structure to better reflect the company’s strategy and the focus on fresh forest fibre paperboard.

M-real operates through two business areas that are also the company’s reporting segments from first quarter of 2012 onwards:
- Paperboard
- Paper and Pulp

Pasi Piiparinen (50) has been appointed SVP, Head of Paperboard business area and a member of M-real Corporate Management Team as of 20 March 2012. Piiparinen reports to CEO Mikko Helander. Piiparinen joins M-real from Stora Enso where his latest position was SVP, Sales and Marketing, Fine Paper Business Area. Piiparinen has an extensive background also in Stora Enso’s packaging business. His education is Master of Science, Engineering.

As earlier announced, Mika Joukio, current SVP, Head of Paperboard business area has been appointed CEO of Metsä Tissue Corporation as of 1 February 2012. After Mika Joukio leaves and before Pasi Piiparinen starts in his new position, CEO Mikko Helander will be the acting Head of Paperboard business area.

M-real's Corporate Management Team consists of the following persons:
- Mikko Helander, CEO, also acting Head of Paperboard business area starting from 1 February 2012 until 19 March 2012
- Matti Mörsky, CFO
- Pasi Piiparinen, SVP, Head of Paperboard business area as of 20 March 2012
- Seppo Puotinen, SVP, Head of Paper and Pulp business area
- Sari Pajari, SVP, Supply Chain and Business Development
- Mika Paljakka, SVP, HR
- Jani Suomalainen, SVP, Procurement

The changes in management structure take effect immediately.

Soili Hietanen and Heikki Husso will step out of M-real’s Corporate Management Team. Husso continues as the Managing Director of M-real Zanders GmbH while Hietanen will work in different development projects in the M-real head office.

Paperboard business area includes the Kemi, Kyro, Simpele, Tako and Äänekoski board mills, Kyro wallpaper base machine and Joutseno BCTMP mill located in Finland as well as Gohrsmühle mill in Germany. Paper and Pulp business area includes Husum paper and pulp mill in Sweden, Alizay mill in France and Kaskinen BCTMP mill in Finland.

As earlier announced, M-real is planning to close the entire Alizay mill and the unprofitable operations at Gohrsmühle mill. The plans are expected to materialize in early 2012 that would improve the company’s profitability materially.

The accounting treatment of the M-real’s 32 percent ownership in Metsä-Botnia will remain unchanged. The associated company result of Metsä-Botnia will be allocated to business segments based on their respective pulp consumption. Roughly two thirds of the result impact of Metsä-Botnia ownership is expected to be included in the Paperboard business area and the rest in Paper and Pulp business area.

M-real will announce its financial statements 2011 on 9 February 2012 based on the old business area and reporting structure. The restated historical figures based on the new business structure will be released during the second half of February 2012.
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M-real Corporation, part of Metsäliitto Group, has agreed to divest the Reflex mill’s Premium Paper business to Walzmühle AG that is owned by Hahnemühle FineArt GmbH, the Hahnemühle management and private shareholders of Hahnemühle. The divestment includes the complete Premium Paper business and related assets as well as approximately 100 of M-real’s employees.

 

Premium Paper products are used in high-quality graphical end-uses, such as letterhead, brochures, books, calendars and envelopes.

 

The divestment is expected to be closed during 1Q 2012. The divestment would decrease M-real’s annual sales by approximately EUR 20 million and it would not have a material impact on M-real’s operative result. The divestment is not expected to have a material non-recurring result or cash flow impact taking into account the bookings made in 4Q 2011.

 

“We are very satisfied that the well-recognised speciality paper producer Hahnemühle takes over the Reflex Premium Paper business. Our actions to build a Business Park at Reflex by finding other producers to the site have been very successful. Thanks to our Business Park concept, more than half of the originally over 400 jobs can be saved at the mill. Key issues in the success have been excellent cooperation with the union, works council, local authorities and Metsä Tissue Corporation who is already our partner at the site. Based on this experience we have a good opportunity to implement the Business Park concept successfully also at Gohrsmühle mill,” says M-real’s CEO Mikko Helander.

 

After the divestment of the Premium Paper business, M-real has no operations left at the Reflex mill. The discontinuation of the carbonless paper converting was agreed in late 2011. In October 2010, M-real sold the paper machine 5 and some related assets at the Reflex site to Metsä Tissue.

 

Hahnemühle FineArt GmbH is a German based speciality paper producer and one of the market leaders in its field in Germany (www.hahnemuehle.com).


 

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M-real Corporation, part of Metsäliitto Group, has concluded the statutory negotiations at the Äänekoski mill. In order to improve the profitability of its coated paper business M-real started on 9 November 2011 statutory negotiations concerning the potential closure of the Äänekoski paper machine and conversion of the mill’s sheeting capacity entirely to folding boxboard sheeting. M-real released a stock exchange bulletin on 2 November 2011 concerning these plans.

Following the conclusion of the statutory negotiations, M-real has decided that the Äänekoski paper machine, with an annual capacity of approximately 200 000 tonnes of coated fine paper, will be closed by 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 related personnel reduction at the Äänekoski mill is a maximum of 169 people. In close cooperation 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 business areas.

M-real continues to produce coated papers at the Husum mill in Sweden. Äänekoski paper machine’s reel production will be transferred to Husum. The annual coated paper capacity at Husum will be increased from 285 000 tonnes to 340 000 tonnes during 2012.

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 tonnes. M-real’s annual sales will reduce by approximately EUR 60 million and operating result will increase by approximately EUR 20 million based on the results of the coated paper production in 1–3Q 2011. The full annual financial impact of the measures is expected to materialise 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 in 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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Friday, 09 December 2011 09:30

M-real’s results weaken in the 4Q 2011

M-real’s result will weaken clearly in the 4Q 2011 and statutory negotiations to prepare for low delivery volumes will be started in Finland

M-real Corporation, a part of Metsäliitto Group, expected in connection to the 3Q 2011 result announcement that its operating result, excluding non-recurring items, will in the 4Q 2011 be roughly at the 3Q 2011 level. The 3Q 2011 operating result, excluding non-recurring items, was EUR 6 million.

The delivery volumes of pulp and paper have however been lower than expected and the pulp price has decreased more than anticipated. Also the board delivery volumes have been somewhat lower than expected as a result of rapid inventory reduction in different parts of the delivery chain. Due to these facts the 4Q 2011 operating result, excluding non-recurring items, will be clearly weaker than in 3Q 2011.

M-real starts statutory negotiations concerning all mills in Finland with the target to adapt the production temporarily for low volumes by temporary layoffs and working time arrangements. This is an anticipatory measure if no material improvement in the order volumes experienced in late 2011 emerges. Possible actions will be decided locally at the mills. All in all, the negotiations concern approximately 1.200 people.
“End demand of board seems to be at normal level and the reduced board deliveries seem to be a result of continuing inventory reduction in different parts of the delivery chain. Long-term demand and profitability outlook for board continues good, but M-real will in short-term prepare for low delivery volumes by enabling temporary layoffs at the Finnish mills. Finalization of the earlier announced measures to eliminate losses of Alizay mill, Speciality Papers and the coated paper business, expected in early 2012 the latest, will improve M-real’s results materially”, says CEO Mikko Helander.

M-real will publish the financial results for 2011 on 9 February 2012.

M-REAL CORPORATION

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Wednesday, 02 November 2011 14:00

M-real plans to restructure its coated paper business

M-real Corporation, part of Metsäliitto Group, plans to restructure its coated paper business to achieve an approximately EUR 20 million improvement in annual operating result.

Paper production at the Husum mill in Sweden is planned to be reorganized. The annual coated paper capacity on the mill will be increased from 285,000 tonnes to approximately 340,000 tonnes without material investments. The reel production of Äänekoski paper machine is planned to be transferred to Husum.

Äänekoski mill’s coated fine paper machine is planned to be closed and the sheeting capacity converted fully to folding boxboard sheeting. Statutory negotiations related to the possible closure of the paper production and the development of sheeting capacity covering the whole of Äänekoski paper and board mills’ personnel of approximately 370 people will be commenced on 9 November 2011. Amount of personnel at the Äänekoski mills is expected to reduce by 180 at the maximum.   

Currently there is one machine at Äänekoski paper mill with an annual capacity of approximately 200,000 tonnes of coated fine paper. After the planned closure of paper production the paper and board sheeting operations at the site are planned to be combined. This would increase the folding boxboard sheeting capacity and improve M-real’s profitability.

M-real’s coated papers will also in the future be sold by Sappi Fine Paper Europe. Based on the planned measures M-real’s annual coated paper capacity would reduce by approximately 145,000 tonnes. M-real’s annual sales would reduce by approximately EUR 60 million and operating result would increase by approximately EUR 20 million based on the actual performance of the coated paper production in the first half of 2011. The full annual financial impact of the planned measures is expected to be seen from 2012 onwards.

“Profitability of coated paper production is very weak due to the worsened market situation and the structural overcapacity in Europe. The situation is not expected to materially improve in the future either, due to which we are planning to reduce our coated paper production and to focus it to our most efficient unit in Husum where M-real has one of the most modern and efficient coated paper production lines in Europe. Husum is one of Europe’s largest paper and pulp integrated sites which productivity has been increased to a very good level thanks to successful improvement measures.” says M-real’s CEO Mikko Helander.

Consumer Packaging’s 4Q/2011 operating result is expected to include approximately EUR 25 million non-recurring impairments and cost provisions related to the planned measures in Äänekoski. Total net cash impact of the planned measures is expected to slightly positive taken into consideration also the reduction of working capital.
 
M-REAL CORPORATION

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