01 Aug 2005

Top politicians meet Norske Skog CEO

A number of key national politicians and party leaders were briefed this morning by chief executive Jan Oksum about the background for the proposal to close the Norske Skog Union mill.

Held in the company's headquarters at Oksenøya outside Oslo, the meeting was told that Norske Skog faces new market conditions for its products in Europe.
Excess capacity and low prices mean that the company and the industry as a whole have delivered very weak results since 2002. European production capacity must accordingly be reduced.
Located in Skien south of Oslo, Norske Skog Union has the weakest results of the company's mills, and has failed to deliver a profit for the 2002-05 period.
"We must cut capacity in Europe, and the best solution is to close down this unit," Mr Oksum explained to the meeting. "In practice, it would take 250 000 tonnes of capacity out of the market.
"Continuing operations solely on the basis of book paper is no alternative, because excess capacity for paper would not be reduced and we would have to reduce output at other mills.
"Closing Norske Skog Union will strengthen the rest of the group, and more than 6 000 jobs in Norway and abroad, by allowing them to take over the volumes currently produced by this mill."
Mr Oksum emphasised to the politicians that management and employees would continue to pursue open discussions until a final decision is taken by the company's board and corporate assembly.
He gave assurances that the company would make every effort to assist the workforce at Norske Skog Union in these difficult circumstances.
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