News

M-Real is looking to sell its folding cartons business as part of a huge “restructuring” including closures and job losses aimed at saving hundreds of millions of pounds.

The three carton factories are Meulemans in Belgium, Petöfi in Hungary and Finland’s Tako plant. The company said they could be sold together or separately.

M-Real said it had “shortlisted potential divestitures” expected to raise £335m (€500m) to help reduce debt.

It is also looking at selling part of its stake in Metsä-Botnia to Metsäliitto. The overall review was prompted by overcapacity, would start immediately and was due to end in around a year’s time, said the firm.

A spokeswoman refused to say what would happen to the carton factories if a buyer was not found, and staff totals were not revealed. The firm said it had pinpointed for possible closure mills and production lines that were uncompetitive.

“M-Real’s profitability has struggled in recent years and we are not alone,” she said. “The paper business as a whole is under a lot of pressure. Oversupply is not so critical in cartons but it is not the firm’s core business.”

M-Real plans to close two paper mills and two machines to cut production by 485,000 tons. Sittingbourne in Kent has been marked for closure as are two machines in Germany and a plant in Sweden. The threatened areas employ around 500 people.

Chairman Kari Jordan (pictured) said: “Further consolidation within the European paper industry is needed and the whole structure of paper merchanting is going to change.”