Rottneros AB announced that Board of Directors has decided to discontinue the production of groundwood pulp in Rottneros Mill as there are no prospects for long-term sustainable profitability. The decision means that about 40 people will be made redundant. The cost of the closure is expected to amount to approximately 60 MSEK.

Production is expected to cease at the end of 2022, following the conclusion of trade union negotiations which are now beginning. The extensive strategic analysis carried out by the company shows that the prospects for long-term sustainable profitability are insufficient for groundwood pulp. Partly due to the dramatically changed situation on the electricity market with very high and highly volatile prices as a result.

Partly a structurally decreasing demand for the end products where groundwood pulp is used, mainly printing and writing paper, which makes it difficult to reach a sufficiently high price level. The Group's electricity needs will be affected by a closure of the groundwood line, but also by increased CTMP production. As a result, the Group's portfolio of electricity futures will be adjusted, and surpluses will be realized at current market prices.

The value of the Group's electricity futures is high, meaning that the profit impact from the closure is estimated to be substantially lower than the cost of the closure.