Apr 15, 2013. /Lesprom Network/. Metsä Wood, part of Metsä Group, will initiate a new cost savings programme, company said in a statement. The reasons for this are the unsatisfactory development of profitability over the last few years and the declining sales on the main market areas. With the programme, Metsä Wood aims to improve its competitiveness in the future.

Metsä Wood operations will be reorganised by merging the Plywood and Building Products business lines into a Building and Industry business line. The Timber and Upgrades business line will continue to do business in its existing form. Significant synergies will be sought from the combination of operations in the entire organisation.

During the past few years, the market in the UK has developed unfavourably, reported Metsa. Operations have been previously adjusted in line with market conditions. The company is proposing to initiate new adaptation measures in all UK Timber and Upgrades business units. These measures could affect in a reduction of up to 150 jobs. At the same time, Metsä Wood will continue its activities to increase sales and to ensure more efficient customer service.

As part of the programme, Metsä Wood plans to divest the Casteljaloux sawmill, upgrading and distribution unit in France. The company has initiated a divestment process with the aim of finding a credible buyer for the unit and to divest the operations within the next two months. If a credible buyer is not found, Metsä Wood will initiate statutory labour negotiations for closing down the unit. These operations currently employ a total of 34 persons.

As part of the cost savings programme, glulam business in Finland and I-joist and Pole Processing businesses in the UK will be subjected to strategic analysis as non-core businesses. Metsä Wood seeks to improve the profitability of these operations.

Based on the cost savings programme the maximum headcount reduction is not expected to exceed 255, of which an estimated 95 in Finland. Metsä Wood will launch statutory labour negotiations on 22 April 2013 in Finland. A total of 1,300 Metsä Wood employees are included in the scope of the negotiations. The sawmills, upgrading units and sales functions of these in Finland are outside the scope of the negotiations.