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Lund based ÅR Packaging closes two plants

Following the acquisition of the European operations of Mead Westvaco in 2015, AR Packaging operates three plants in Russia. Sales volume development does not justify three plants in the region at the same time as price pressure increases. Consequently capacity and infrastructure costs need to be reduced to meet the profitability demands for the Russian rotogravure operations. The A&R Carton plant in Moscow, will be closed and the Group will serve the Russian market from its two plants in St. Petersburg and Timashevsk, each with focused technology, competence base and increased production capacities.

To be competitive and profitable on the Nordic carton market the cost base needs to be substantially reduced and asset utilisation increased. Therefore, the AR Packaging board has in its meeting on 28th September taken the decision to reallocate volumes to other plants in the Nordic region and close the Kauttua production. Sales, customer service and product development functions will remain in Kauttua.

Bad Year for DMK – Closure of Plants

Ingo Müller (CEO) was dissatisfied with the 2016 reporting period: ”We clearly fell short of our most important goal – to pay competitive milk prices. There’s no way to gloss over that fact”.

As a consequence of the dramatic turn in the market in 2016, many farmers have given up dairy farming. Members leaving Deutsches Milchkontor eG will mean the loss of around 1.7 billion kilos of milk in the next two years. The DMK GROUP is planning to respond to this situation with a new concept for its sites and for milk processing. This concept will involve stopping production at three sites: Rimbeck/North Rhine-Westphalia, Bad Bibra/Saxony-Anhalt and Bergen on the island of Rügen. There are also plans to discontinue slicing and packaging at an additional site, Nordhackstedt/Schleswig-Holstein.

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