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Botnia to close down Kaskinen mill

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The statutory negotiations according to the Act on Cooperation in Companies at
Oy Metsä-Botnia Ab:s Kaskinen mill were finished on 12 January 2009. Financial
prerequisites to continue the operations of the mill could not be found during
the negotiations, and the mill will be closed down during the first quarter of
2009. 

Kaskinen mill is the oldest of Botnia's mills and its profitability has been
deteriorated due to the in the long term restricted availability of for its
mill price competitive wood raw material and increased production costs. "The
rapid decrease in the demand for pulp and lowered prices due the poor demand
has made the situation even more severe and there are no prerequisites for
profitable operations of the mill. The mill is at the end of its technical life
cycle. Continuing the operations would require significant investments that are
not feasible in this situation", says Ilkka Hämälä, President and CEO of the
company. 

The domestic wood raw material becoming available from Kaskinen mill will be
directed to Botnia's and Metsäliitto Group's other Finnish production
facilities to secure their long-term operations. As result of the closure the
company will book as write-off in fixed assets and as one-time closure costs in
aggregate approximately EUR 75 million, of which cash impact approximately EUR
20 million. 


The statutory negotiations affected in Kaskinen altogether 223 persons. It is
estimated that approximately 70 persons can be placed at Botnia's other
locations or at the mill integrate's shared operations (M-real BCMTP mill on
the same site). Additionally, the mill integrate will offer temporary tasks for
about 30 persons, and the project for the closure of the mill will employ about
20 persons. Approximately 70 persons have the possibility for retirement
schemes. 

Botnia cooperates with the towns in the region to find new employment
opportunities in the area. More information on the possible options and the
precise closing schedule will be given later. 


For more information, please contact Ilkka Hämälä, President and CEO, at +358
10 465 4672 after 11.30 Finnish time (CET +1). 


The company will organise a press conference at Kaskinen mill today, 14 January
2009, at 12.30 Finnish time.





                                            

                

            

        

    

    



    

        
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