Joutseno pulp mill faces indefinite layoffs after months-long shutdown

Metsa Fibre is preparing negotiations on possible indefinite layoffs at its Joutseno pulp mill, which has been shut since spring, Yle reports. The mill in Lappeenranta has about 160 employees.

Some employees are already on temporary layoff, while others are carrying out maintenance work at Joutseno or working at Metsa facilities including the Simpele board mill and the Lappeenranta sawmill. There is currently no date for a return to normal operations.

The negotiations announced on Monday would cover layoffs with no fixed end date. According to chief shop steward Jari Teppana, the talks will be the eighth round involving the workforce in three years.

Previous layoffs have lasted no more than 90 days, giving employees a date to look forward to. Teppana said the lack of a deadline could create serious financial concerns for families if the layoffs continue for a long time.

Production at the mill was shut down at the end of March. Since then, several dozen employees at a time have been laid off, while alternative work has been found within the company for most of the approximately 160 workers.

Some employees have worked temporarily at other Metsa Fibre mills, while others have remained at Joutseno to maintain security staffing and carry out maintenance. Teppana said there had been preliminary discussions about continuing to offer work at other Metsa facilities, but the details will be addressed during the negotiations.

International pulp market remains difficult

Jakob Donner-Amnell, a researcher at the University of Eastern Finland who has followed the Finnish forest industry for many years, said the negotiations reflected both the generally weak profitability of pulp production and Metsa Fibre’s decision to concentrate production restrictions on Joutseno rather than its other mills.

Metsa Fibre operates four pulp mills. Donner-Amnell said the international market for pulp is currently difficult. UPM has also reported production stoppages at some of its pulp mills in Finland.

The problems mainly concern market pulp sold on international markets. About half of Finland’s pulp production is market pulp, while the rest is processed into paper and board in Finland.

About half of Finland’s pulp exports go to Asia, with China the largest market. Donner-Amnell said exports had been profitable for a long time but had turned negative in recent years, partly because China’s own pulp production has grown and continues to expand.

Demand for softwood pulp, which is also produced in Finland, has gradually declined in the forest industry, while the use of hardwood pulp produced elsewhere has increased.

Finnish mill closures expected

Several pulp mills have been closed in Canada in recent years. Donner-Amnell said industry experts believe Finland will probably also have to close at least one pulp mill in the coming years.

He said the cost level in the Nordic countries was high enough that it would be surprising if Finland avoided pulp mill closures altogether in the near future.

According to the Finnish Forest Industries Federation, Finland currently has 12 pulp mills. Eleven are owned by the three largest companies, Metsa, UPM and Stora Enso. The mills employ more than 1,400 people.

Donner-Amnell said the existing mills had remained in Finland mainly because Finnish forest companies were in stronger financial condition than many international competitors. This has allowed Finnish companies to wait and see whether competitors close their mills first, which would improve the position of Finnish mills.