SCA said that it has initiated an “efficiency improvement program” that is expected to reduce annual costs by SEK 1.07 billion. According to SCA, demand in Europe has fallen by 10% and the industry is struggling with high producer inventories and pressure on both liner and corrugated board prices.
The cost savings program includes:
• Bringing forward the closure of the New Hythe mill in the UK to mid-2009
• Closure of 11 corrugated board plants in Europe
• Rationalization of units and workforce, in total 2,200 employees in Europe.
In addition to the actions above, SCA said it is reducing production for linerboard amounting to 160,000 tons during the first two quarters of this year.