Consumables
Billerud carries out market-related production curtailment within sack paper – will impact profitability significantly in the fourth quarter
Wednesday 17. December 2008 - Billerud will stop all production of white and brown sack paper at its Skärblacka and Karlsborg mills during the period 22 December to 7 January. This measure is being carried out in order to adapt production to reduced demand and avoid a build-up in inventories.
Significantly reduced activity in the building sector in southern Europe and high levels of customer inventories have resulted in a strong decline in demand for sack paper.
Together with other production curtailments, this measure will mean that the overall production curtailment in the fourth quarter will amount to around 10% of total production capacity. The total effect of production curtailments and price erosion will in the fourth quarter 2008 render a negative and significantly lower result than previously expected.
Billeruds CEO Per Lindberg comments:
“We consider that continued production would lead to price erosion on the market that would not benefit us in any way, which is why we choose to stop production. In a process industry like ours, production curtailments of this magnitude however have considerable consequences for profitability in the short term.”