Frohnleiten in Austria to close down in 2013

It is not easy to compare different paper mills with different machinery and different histories, but still it looks like W. Hamburger GmbH has put much effort in preserving the paper mill in Styria.

Among the actions taken are, according to the press release:

  • investments,
  • product innovations and
  • a reorganisation of the plant

as well as attempted synergy effects with another mill relatively nearby.

In Finland most paper mills of this capacity have been shut down or have a much wider working width. In addition, in Finland paper machines/mills of even greater capacity have been shut down (notably the Voikkaa, Myllykoski and Kajaani mills). So the statement by the managing director below is laudable, especially given the Finnish experiences:

“Being obliged to close-down a traditional company like Frohnleiten, in which generations have been employed, and which, as an important employer, has revitalised and helped to form the region, is a very difficult task for us”, explains Harald Ganster, managing director of W. Hamburger GmbH today.

Obviously the situation in the Kymenlaakso-region of Finland, where much of the paper industry was concentrated, is very different and despite employer efforts it is difficult to help ‘make the change into a new period of their life easier.’ But the statement by the Austrian managing director do have a different sound to them because of the attempts to keep the mill in business – not only reorganization, but also product innovation and investments. This is not to say that in Finland these things did not happen, e.g. the Summa paper mill is a good example of large investments before it was shut down.
Although it is sad that yet again a traditional paper mill closes down and workers lose there jobs, it is relevant that also in this case the same issues are mentioned as everywhere else, e.g.

  • intensified international competitive context due to over-capacities
  • the current situation in the business sector does not give reason to expect a turnaround
  • Overseas markets cannot be supplied cost-effectively because of the euro-/dollar-exchange rate

This simply is the state of affairs, and the demand for pulp in Eastern Europe and China will only lead to more competition on the European market. To some extent the European paper companies investing in China have brought this onto themselves. By the logic of capitalism, if more profit can be made by competing with ‘Chinese’ products on the European market, this will happen.

So, still no positive news on the European paper market.

 

 

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