Nov 22, 2011. /Lesprom Network/. The Cham Paper Group is reorienting its course for the future. After performing a thorough evaluation of all possible strategic options, the Board of Directors and the Executive Management Board are initiating a comprehensive restructuring of the Group to sustainably secure the Group's future for the coming decade. The measures initiated take the economic and locational situation of the surrounding community into account while leveraging the development potential of all of the Group's assets. The strength of the Swiss franc is forcing the Group to relocate a large portion of its production capacity to the euro zone, as the company said in a press release received by Lesprom Network. In order to ensure a sustainable return to profitability, the Cham Paper Group will have to quickly withdraw from less attractive markets in Switzerland and Italy. The utilization of production capacity can be thoroughly reorganized and optimized on a per-location basis by the simultaneous relocation of selected product groups to Italy. The Cham site intends to focus on its core competency, surface coating. To be sure, the new curtain-coated specialty papers for the Consumer Goods segment and the increasingly popular Digital Imaging products are to continue to be produced in Switzerland in the future as well. In order for the Cham mill with its special coating machines to be able to focus entirely on the high value-adding and thus less forex-sensitive surface treatment technologies, base paper is to be sourced on the market in the future. In so doing, the Group's site in Switzerland is to be transformed into a technology, R&D and coating center and specialist solution provider for a wide variety of industries. The proposed steps will result in the shutdown of base paper production in Cham. Plans have been made to decommission the PM4 paper machine in the first half of 2012 and the PM5 by the end of 2013. Starting in 2012, selected profitable Cham niche products for Industrial Release applications are to be manufactured in the Italian mill in Carmignano. The large volumes of specialty papers for the tobacco industry currently providing for a large part of capacity utilization in Cham are to be produced in Carmignano by the end of 2013. The mill in Carmignano is already focussing completely on Consumer Goods in general, and on flexible packaging products in particular, thus providing for expansion potential. The growing market in China continues to be supplied from Europe. The Condino site will be further expanded. Concentrating on the production of glassine papers, this Italian mill has successfully expanded its sales during the last three years from 38,000 to 45,000 tonnes. Plans have been made to expand its capacity in excess of 20% by 2014. Site location and product portfolio optimization throughout the Group will result in a substantial improvement in cost structures and a reduction in the Group's dependence on the development of the Swiss franc. In so doing, the Cham Paper Group is recreating a basis on which profitable growth is possible. In the course of this restructuring the Group's management structure will also be adapted in accordance with the new exigencies in the course of a highly coordinated undertaking. In one of the first steps CEO Peter Studer will be additionally assuming the management of the Carmignano mill from 1 December 2011. The current mill manager Rainer Kürschner will be leaving the Cham Paper Group at the end of the year. The 2011 operating result is excessively burdened by the impact of the strong Swiss franc. The company is reckoning with a loss from operating activities (EBIT) of approximately CHF 10-15 million ($10.7-16 million). Added to this: value adjustments of assets and tax losses carried forward, restructuring provisions and non-recurring effects of an estimated CHF 80-90 million ($86-96.7 million) that will burden the 2011 net result. Of this amount, however, only CHF 20-25 million ($21.5-26.8 million) will affect the Group's cash position over the next couple of years. More details on the restructuring provisions and non-recurring effects will be forthcoming at the annual financials press conference in March of 2012. Thanks to its sound balance sheet and existing cash reserves, the Group will be able to deal with the restructuring and reorientation process through its own resources. The equity ratio will continue to amount to a comfortable 40%. With a stable economy, the Cham Paper Group should return to operating in the black in the course of 2012.