Europe’s largest carton board producer has closed one of its largest sawmills due to “long-lasting high price of raw material, the low market price of sawn timber and the reduced demand for the product.”
Last week, Mayr-Melnhof Group announced the closure of the sawmill at MM Kotkamills, which once had a 210,000 cubic metre capacity for lumber production.
The sawmill has been closed since July, with the plant continuing to operate “the most modern fibre board machine in Europe, as well as a machine for saturating kraft paper.”
It will continue to operate its carton board and saturating kraft paper facilities at 100% production, with the Mayr-Melnhof Group confirming to Wood Central that only the sawmill will be impacted by the closure.
In 2020, the Chair and CEO of the Mayr-Melnhof Group, Peter Oswald, claimed that the “medium-term objective is to raise the sales volume to the capacity of close to 400,000 tonnes of carton board per annum.”
“The investment is aimed at strengthening MM Kotkamills’ position as the largest supplier of cartonboard sheets in the European market,” said Päivi Suutari, Managing Director of MM Kotkamills.
At the time, Ms Suutari noted that the investment was part of a push to “easily recycle the cartonboard broke from cutting back into the manufacturing process.”
However, profitability at the sawmill over the last 12 months has deteriorated leading up to the announcement.
It comes as two of Finland’s largest forest companies, Stora Enso and UPM, have reported a significant drop in profit and activity.
Last month, both blamed “geopolitical uncertainty, sluggish economic activity and persistent inflation.”
Wood Central understands that the sawmill has been in trouble for some time. Global Wood Markets reported in September that the mill’s troubles related to the “increased transportation expenses and limited availability of timber resources.”
“In response, the Finnish government has provided support,” it reported, with “financial assistance, training programs, and initiatives aimed at promoting innovation and competitiveness.”
“To thrive, sawmills need to adapt and innovate.”
“Investing in technology, exploring new markets, and embracing sustainable practices are some strategies that can help sawmills navigate through these turbulent times.”
- Please be advised that Wood Central has corrected this story after being contacted by Ma-Melnhof Group. Wood Central confirms that contrary to early reports, the closure will not impact the carton board and saturating kraft paper facilities.