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02 Aug 2005 Norske Skog board supports closure proposal The board of directors of Norske Skog has approved the management's proposal to initiate a formal process with a view to the permanent closure of the Norske Skog Union mill. A final decision by the board and corporate assembly is expected in September, with the intention of shutting the mill at Skien in Norway during the first quarter of 2006.
"Closing Norske Skog Union will be the first step in a restructuring plan for investment in our Norwegian facilities," says chief executive Jan Oksum.
The background for the recommendation is persisting excess capacity in European newsprint production, which caused unsatisfactory results for some time.
"The fundamental reality underlying the proposal to close Norske Skog Union is that our capacity for paper production in Europe is too large in relation to customer needs," says Mr Oksum.
"A closure of the mill will strengthen the rest of the group as well as more than 6 000 jobs in Norway and abroad, which can take over the volumes from Norske Skog Union."
He says that the company has assessed an outline proposal from the Norwegian industry minister for a package of measures relating to the mill.
"We will improve our annual results by more than NOK 200 million by closing the mill. In that perspective, the minister's proposal represents just one-two months of savings for us.
"I have great understanding of the uncertainty felt by our employees at Norske Skog Union. We will continue to work closely with the mill workforce and the authorities in the ongoing process."
Further information from
Media
Hanne Aaberg, senior vice president, corporate communications, tel: +47 67 59 93 34, mobile +47 90 52 19 04
Tom Bratlie, communication manager, corporate communications, mobile: +47 90 52 19 04, tel: +47 67 59 93 34
Financial market
Jarle Langfjæran, vice president, investor relations, mobile: +47 90 97 84 34
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