Paper Mill closures in Europe

BRUSSELS, Belgium, Dec.20, 2010 -- Western European demand for coated papers has matured and the post recession rebound in demand is over. According to RISI's new European Coated Papers Risk of Closure Study, overcapacity of both coated woodfree and coated mechanical papers has reached 1.2 million tonnes, lowering prices and affecting producer profitability in Europe. With coated woodfree capacity in China forecast to exceed domestic demand by the end of 2011 and new capacity in Russia, export prospects of Western European coated paper producers are threatened and capacity closures of 2.7-3.5 million tonnes are expected by 2015.

"Coated paper mills are currently operating at a loss in Europe. To maintain profitability, prices will have to rise and capacity needs to be balanced, through closures," said Sampo Timonen, Director of European Graphic Papers at RISI, and author of the study.

Timonen analysed ninety paper machines and twenty producers for this study and created a methodology that compares company and machine risk against the industry average using a range of criteria - financials, long-term cost position and the strategies of coated woodfree and coated mechanical producers in Europe - to evaluate the machines most likely to close on a permanent basis. The European Coated Papers Risk of Closure Study analyses machine risk of closure by company, indicating machines likely to face proactive closure, potential divestments and closures due to bankruptcy.

More information, about the study can be found at www.risi.com/eurisk

About RISI

RISI is the leading information provider for the global forest products industry. The company works with clients in the pulp and paper, wood products, timber, biomass, tissue, nonwovens, printing and publishing industries to help them make better decisions.

Headquartered in Boston, MA, RISI operates additional offices throughout North and South America, Europe and Asia. More information can be found at www.risi.com.