As a result of the negotiations, the Fabrics business will reduce 60 jobs at its Tampere, Finland plant by relocating their narrow filter fabric production to Ovar in Portugal by the end of June 2014. The reduction need of personnel at the Tampere plant is 32, taking into account internal transfers of personnel, retirement arrangements and terminations of temporary contracts.
The Power business will cut a total of 88 jobs in Finland and is negotiating a reduction of 70 jobs in Sweden. It will also reduce10 jobs in other countries. The reductions will be carried out starting immediately and concluded by the end of 2013.
The measures will affect all personnel groups. Initially the reduction need was estimated to be 80 jobs in the Fabrics business and 175 jobs in the Power business globally.
As a result of the reductions, Metso Pulp, Paper and Powers' annual costs are estimated to decrease by approximately EUR 17 million. The cost cuts are estimated to be realized in full starting in 2014. One-off restructuring costs are estimated to be approx. EUR 4 million, the majority of which are estimated to be booked during the second half of 2013.
In the filter fabric market, Metso's competitors have increased their capacity and penetrated into the traditional filter fabric market, also increasing price competition.
With the relocation of the narrow filter fabric production from Tampere to Ovar, the Fabrics business responds to the tightening competition and improves its cost competitiveness. The relocation also supports the streamlining and specialization of the Fabrics business' production sites. The production of wide filter fabrics will remain mainly in Tampere.
In the Power business the introduction of shale gas has lowered energy prices in North America driving usage away from biomass and coal. In Europe, the renewable regulatory support situation combined with the region's economical uncertainties has caused a reduction in investments. Decision making in the pulp market has also slowed down, leading to lower demand for pulp mill related energy solutions.