Press release 17 January, 2005

Duni has decided to serve lay-off notices to 210 employees due to its plans to shut down converting operations in Skåpafors. Negotiations with unions in accordance with Swedish worker participation legislation will begin shortly. The decision is an element in Duni’s efforts to improve efficiencies, adapt its operations to changing market conditions, and safeguard and strengthen the company’s long-term competitiveness. Roll goods production by RexCell Tissue & Airlaid AB is not affected by the announced lay-offs.

“It is a painful decision to have to lay off the employees at the converting unit in Skåpafors, and it is naturally a blow to those affected,” said Gun Nilsson, Executive Vice President and Director of Corporate Development at Duni. “However, we must dimension our resources to safeguard and strengthen Duni’s long-term competitiveness in the global market. We will do all we can to implement the shutdown as smoothly as possible.”

The planned shutdown of the converting unit in Skåpafors is part of Duni’s efforts to adjust its production structure in Europe in order to improve efficiencies and capacity utilization. The measures were taken against the backdrop of increased competition from low-cost producers and the fact that customers in Northern Europe, who are becoming fewer in number but larger in size, are putting stiff pressure on suppliers. This has led to greater margin pressure.

Plans call for the majority of the converting done in Skåpafors to be concentrated at Duni’s units in Poznan, Poland, and Bramsche, Germany. When fully implemented, the planned measures are expected to generate annual cost savings of approximately
SEK 40 million.

Negotiations with unions in accordance with Swedish worker participation legislation will begin shortly.

Roll goods production by the subsidiary RexCell Tissue & Airlaid AB, which employs just over 300 people, is not affected by the lay-off decision. These operations comprise tissue and airlaid mills and production of laminate material in Skåpafors and Dals Långed, with annual sales of approximately SEK 1.1 billion. The company will continue to supply Duni as well as external customers.

For further information, please contact:
Anette Laurell,
Corporate Communications Manager, Duni AB,
            +46 734 19 61 44       

Download press release in English (pdf).
Download press release in Swedish (pdf).