Packaging group Smurfit Kappa has announced the closure of one of its recycled containerboard mills in Valladolid in Northern Spain.
The closure is part of the company's ongoing efforts to permanently close 130,000 tonnes of less efficient containerboard capacity. It will also reduce 2008 production by up to 80,000 tonnes through what it called 'market related downtime'.
The Spanish mill is due to close in the second quarter of this year. The mill has an annual capacity of 130,000 tonnes and SKG says its closure will have the effect of reducing recycled capacity by 70,000 tonnes this year.
The group said it will also take up to 80,000 tonnes of market related downtime to optimise the group's supply demand balance and to address an increase in inventory levels of recycled containerboard. Most of this will be taken in March and April of this year.
'SKG will continue to review its production capacity, the cost profile of its mills relative to integration requirements, broader market demand and industry inventory levels,' the company said.
Shares in the company closed 32 cent lower at €7.20 in Dublin this evening.
