Sappi Europe has started a consultation process with employees at its Stockstadt mill to identify viable alternatives for its Paper Machine 2, as it aims to “adjust its capacity in line with market demand”.

The company said the “continuing and accelerating structural drop in demand” for coated papers in Europe and elsewhere has made it “impossible” for it to fill its capacities adequately and to be sufficiently profitable in its current form. “Importantly, the current unfavourable market situation is caused by factors that are beyond Sappi’s control,” it added.

Taking these conditions into account, and with a view to strengthening its position in graphic papers markets “to deliver maximum value”, Sappi said it has undertaken a thorough review of its European production assets and has concluded that “the least disruptive way” to adjust its capacity to match demand in the market would be to operate fewer machines.

Following “exhaustive analysis”, the business said its preferred option to achieve this would be to relocate the entire production output of Paper Machine 2, which equates to around 240,000 tonnes per annum of coated graphic paper, to other Sappi paper machines in Europe.

Sappi Europe chief executive Berry Wiersum said: “We fully recognise and commend the enormous efforts, both past and present, that employees and the management of Stockstadt mill have undertaken to reduce costs in order to earn better margins. Despite these relentless efforts the situation will not improve in the foreseeable future.”