The restructuring programme launched at M-real in the autumn of 2006 has improved the company’s financial situation and operational efficiency considerably.

“Thanks to positive profit development and an improved financing situation we are now in a good position to develop our business further. Furthermore, the sale of Map Merchant Group adds to our opportunities to actively develop other areas of our business,” says Mikko Helander, CEO of M-real.

He emphasises that in addition to re-engineering, the company has also launched several development projects in production and business administration.

“One example of these is our efforts to improve the folding boxboard produced in Simpele, an investment which is also financially significant. Thanks to our development efforts, the paperboard products are now even lighter than before in addition to having better surface properties. Compared to some competing paperboard products, our folding boxboard is up to 44 percent lighter and demonstrates M-real’s commitment to innovativeness and ecology.”

Capital freed as planned

According to Helander, the company has in fact managed to reduce its unprofitable capacity faster than planned. Moreover, the process has proved to be a continuous source of new ways to improve efficiency throughout the organisation.

“We are currently working towards making everything we do a more straightforward process, from our product range to internal procedures. I would especially like to emphasise that we have already comfortably exceeded the goal of freeing 500 million euros’ worth of capital this year, which was included in the restructuring programme. This helps us to significantly reduce our level of dept. Our cost saving operations have substantially contributed to the improved financing situation.”

According to Helander, M-real is currently on the whole demonstrating a good fighting spirit, although redundancies have been unavoidable.

“Our profitability is now improving on all fronts. A lot also naturally depends on the market prices of paper, which have to some extent taken a tentative turn for the better.”

Industry facing major changes

Helander is calling for paper and paperboard manufacturers to be braver about facing up to the problems associated with the excess capacity that damages profitability.

“The whole industry has suffered from low profitability in recent years. At the same time, only profitable companies can afford to be innovative and to develop more and more environmentally friendly solutions and to improve quality and therefore also to improve the efficiency of their customers’ business.”
In Helander’s opinion it is clear that all paper and paperboard manufacturers will have to undergo profound strategic changes just as M-real has over the last 12 months.

“As far as our paper business is concerned we are keeping all of our strategic options open, and the sale of the paper merchant Map Merchant Group to Antalis is now only pending the approval of the EU’s competition authorities. The packaging industry, on the other hand, will definitely be a core element in M-real’s future worldwide.”


Caption:

“M-real wants to play an active part in moulding the framework that will govern paper and boxboard manufacture in tomorrow’s Europe. The company’s first goal was to overcome the challenging financial situation and the next stage is to thoroughly investigate all our strategic options regarding the paper business,” says Mikko Helander, CEO of M-real. © M-real, www.m-real.com


Note to editors:

M-real is one of the leading producers of paper and paperboard in Europe. The company’s customers include publishers, printers, carton printers, paper merchants, office suppliers and well-known consumer brand manufacturers.

M-real supports its customers’ businesses by providing quality papers and paperboard for consumer packaging, communications and advertising end-uses. Together with its customers and partners, M-real develops products and solutions for demanding end-uses, such as magazines, art books, brochures, direct mail, and office papers. The company’s paperboard is used for packaging of beauty and healthcare products, cigarettes, branded food and consumer durables.
The company has four business areas: Consumer Packaging, Publishing, Commercial Printing and Office Papers.

M-real is headquartered in Finland. The company’s sales are EUR 5.6 billion, and it employs over 13,000 people. M-real, which is part of the Metsäliitto Group, is listed on the OMX Nordic Exchange. Metsäliitto Group is the eight largest forest industry group in the world with sales of EUR 8.5 billion.


More information for the media:

Anne-Mari Achrén, Communications
tel. +358 10 469 4541 e-mail: anne-mari.achren@m-real.com

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