Source: Metso Oyj
Metso adjusts its Finnish operations in response to the weakened demand in the pulp and paper industry
A press conference (in Finnish) for media will be held today, Monday,
January 19, 2009, 1:00 p.m. at Metso's Corporate Head Office,
Fabianinkatu 9 A, Helsinki. A conference call (in English) for
analysts will be held at 2:00 p.m. Instructions for participating in
the conference call are included at the end of this press release.
Metso Corporation's company release, January 19, 2009, 11:00 a.m.
local time
Metso will start personnel negotiations regarding employee reductions
in Finnish units serving the paper industry. The employee reduction
is estimated to affect a total of 900-1,200 employees. Approximately
4,700 employees work in the units subject to the personnel
negotiations. The possible reduction in the number of units and the
consolidation of operations into bigger units will be examined as
part of the negotiations.
The preliminarily planned employee reductions are due to the need to
adjust production capacity to correspond with the permanently
decreased machine and equipment demand in the pulp and paper
industry. The situation has been further weakened due to the global
economic crisis. The goal of the planned measures is to secure the
competitiveness of the business by streamlining the operating and
cost structure of the operations in Finland.
The personnel negotiations regarding the employee reductions will
start in the Paper business line and in the Automation business
line's Process Automation Systems unit. They affect all personnel
groups at all locations of these businesses in Finland."It is very unfortunate that we have to start measures of this
magnitude in Finland. However, we want to ensure the competitiveness
of the solutions we offer to the pulp and paper industry also in the
future; our intention is to remain the market and technology leader.
It is our understanding that the new machine market will not return
to the level of the recent years, so we will adjust our cost
structure," says Metso's President and CEO Jorma Eloranta. "Through
the negotiations being initiated, we will seek solutions to this
situation together with the personnel."
In the Paper business line, the reduction need is estimated to be a
total of 800-1,100 people in the Roll Finishing Systems unit in
Hollola, the Technology center in Inkeroinen, the Jyväskylä units,
the Järvenpää units, the Service center in Oulu, the Tampere roll
factory, the Paper business line's Turku units, the Valkeakoski units
and the Varkaus Service center. These units employ a total of
approximately 3,800 people.
Last autumn, personnel negotiations regarding temporary lay-offs were
held in the Paper business line's units in Finland. The measures have
already been initiated to some extent, but unfortunately they are not
enough in the prevailing market situation.
In the personnel negotiations, the possible reduction in the number
of units and the consolidation of the operations into bigger units
will be examined. At the same time, also the division of
responsibilities between units in Finland and China will be defined.
The Automation business line's Process Automation Systems unit's
employee reduction need is estimated to be 90-130 employees. It will
be also studied whether some of the reductions can be replaced by
temporary lay-offs of a larger number of employees. Process
Automation Systems unit's 18 Finnish sites employ a total of just
over 830 people. The biggest sites are in Tampere and Kajaani.
More than half of the orders received by the Process Automation
Systems unit are from the pulp and paper industry customers. Another
significant customer group is the energy and process industry. During
the negotiations, the possibility of production consolidations, the
reorganization, divesture and closure of certain businesses will be
examined and site arrangements will be considered.
The personnel negotiations will start immediately in the Paper
business line and the Process Automation Systems unit, and the aim is
to conclude them by mid-March. The employee reductions are expected
to take place during April-September of this year. In the adjustment
negotiations, also the possibility of part-time employment, internal
transfers and retirement arrangements will be examined. The number of
permanent terminations will be settled in the personnel negotiations.
As a result of the arrangements, the annual expenses of the
businesses in question are estimated to decrease by 40-50 million
euros. The cost reductions are estimated to be realized in full
starting in 2010. The non-recurring expenses caused by the
arrangements and recorded in 2009 are estimated to be EUR 10-20
million. "The need, nature and scope of potential support packages
will be clarified during the negotiations process. Therefore their
cost effect cannot yet be estimated in detail."
Operational focus on services business
The pulp and paper industry's new investments in the upcoming years
are estimated to decrease by about one third, and most likely even
more this year, compared to 2004-2008, and they will be more clearly
focused on Asia and South America. The closures of customer mills in
the Nordic countries and elsewhere in Europe and North America and
the decreasing markets for new machines globally have reduced the
demand for Metso's paper technology and process automation products."Because of the development described above, we will adjust the
existing new paper and board machine production capacity in northern
Europe and our cost structure to correspond to the permanently
decreased demand. At the same time, we will direct our know-how
globally to the services business," emphasizes Bertel Langenskiöld,
President of Metso's Paper and Fiber Technology segment.
Metso aims to invest more strongly in developing the services
business for the pulp and paper industry. The wide installed base of
machinery and equipment offers good opportunities for developing
rebuild, repair, maintenance, and spare and wear parts services.
Consequently, Metso has strengthened its services resources close to
its customers in emerging markets.
Locations of the personnel negotiations
Metso has a total of about 9,300 employees in Finland, 3,800 of them
work in the Paper business line and about 800 in the Automation
business line's Process Automation Systems unit.
+-------------------------------------------------------------------+
| Locations under employee negotiations | Personnel |
|-------------------------------------------------------+-----------|
| Jyväskylä | |
| Paper and Board Machines, Foundry, Jyväskylä Service | 1,894 |
| Center | |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Järvenpää | |
| Coaters and Calenders, Winders, Järvenpää Service | 981 |
| Center | |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Tampere | |
| Tampere Roll Factory | 617 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Turku | |
| Air and Chemical Systems, Turku Service Center, Metso | 381 |
| Paper Turku Works Oy | |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Valkeakoski (incl. Jämsänkoski) | |
| Stock Preparation and Recycled Fiber, Metso Paper | 352 |
| Valkeakoski Oy | |
|-------------------------------------------------------+-----------|
| Kajaani | 123 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Hollola | |
| Roll Finishing Systems | 98 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Oulu * | |
| Oulu Service Center | |
| Process Automation Systems | 66 |
| * Metso's composites manufacturing business in Oulu | |
| was sold to xperion Oy as of December 31, 2008, and | |
| is therefore not included in these figures | |
|-------------------------------------------------------+-----------|
| Inkeroinen (previously Anjalankoski) | |
| Inkeroinen Technology Center | 69 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Varkaus | |
| Varkaus Service Center | 34 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Kemi | 19 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Helsinki | 21 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Imatra | 14 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Ylöjärvi | 11 |
| Process Automation Systems | |
|-------------------------------------------------------+-----------|
| Kuopio, Pietarsaari, Rauma, Äänekoski, Pori | 16 |
| Process Automation Systems | |
| | |
|-------------------------------------------------------+-----------|
| Total | 4,696 |
+-------------------------------------------------------------------+
Metso is a global supplier of sustainable technology and services for
mining, construction, power generation, automation, recycling and the
pulp and paper industries. We have over 29,000 employees in more than
50 countries. www.metso.com
Additional information for the press, please contact:
Bertel Langenskiöld, President, Paper and Fiber Technology, tel. +358
20 484 3200
Hannu Mälkiä, President, Paper business line, tel. +358 400 460 587
Pasi Laine, President, Automation business line, tel. +358 20 484
3262
Sakari Ruotsalainen, President, Process Automation Systems unit, tel.
+358 20 483 8933
Additional information for investors, please contact:
Johanna Sintonen, Vice President, Investor Relations, Metso
Corporation, tel. +358 20 484 3253
Press conference (in Finnish) 1:00 p.m. at Metso's Corporate Office,
Fabianinkatu 9 A, Helsinki.
The press conference will be attended by Metso's President and CEO
Jorma Eloranta, Bertel Langenskiöld, President, Paper and Fiber
Technology segment, and Hannu Mälkiä, President, Paper business line.
President and CEO Jorma Eloranta is available for press interviews on
Monday from 2 p.m. - 4 p.m. Interview requests through Communications
Manager Jaana M. Lappalainen, tel. +358 20 484 3005
Conference call for analysts
Metso's conference call for analysts and investors will be held
today. Olli Vaartimo Executive Vice President and CFO and Johanna
Sintonen, VP, Investor Relations, will give a short presentation and
answer questions.
The conference call will be held in English today from
- 12:00-1:00 p.m. GMT (London)
- 1:00-2:00 p.m. CET (Paris)
- 2:00-3:00 p.m. EET (Helsinki)
To participate in the conference call, please dial a few minutes
prior to the start of the teleconference in
- US: +1 334 323 6201
- Other countries: +44 20 7162 0025
A replay of the conference call will be available for 7 days from
January 19, 2009 until midnight on January 26, 2009
- US: +1-954-334-0342
- Other countries: +44 (0)20 7031 4064
- Access code: 309340
Presentation material for the press conference and the phone
conference is available in Finnish and in English on Metso's web
site: www.metso.com