13 September 2012

Sequana to shut down three plants in Denmark, UK and Argentina

Boulogne-Billancourt - 13 September 2012 - Sequana is continuing to deploy its strategy in line with the plan unveiled in July 2012 at the time of the €150 million capital increase that helped to bolster its financial structure. This strategy aims to consolidate the Group’s positions by enhancing its production model to bring capacity into line with demand and reduce its cost structure, and by pursuing its development in emerging economies and in growth markets on the distribution side of the business. 

Consequently, Arjowiggins has presented the social partners and employees with its plans to close the Dalum Papir A/S plant in Denmark (graphic papers), the Ivybridge plant in the UK (papers used for security documents, creative papers) and the Witcel plant in Argentina (creative papers). 

The particularly tough conditions the paper industry has faced since 2008 have accelerated the fall in demand for graphic papers, with the market contracting by approximately 6% every year. Given thestructural decline and overcapacity on the market, and following the shutting down of a machine at the Chartham plant (creative papers) in the UK in August 2012, Arjowiggins has decided to continue to adjust its capacity in line with demand and to close its Dalum Papir A/S, Ivybridge and Witcel plants. 

These capacity reductions represent a total of 126,000 tonnes (including 103,000 tonnes for Dalum Papir A/S), or around 10% of the group’s total production capacity. Thanks to the flexibility of Arjowiggins’ production model, all product ranges concerned will be transferred and manufactured at other group plants in France, the UK and Brazil. The closure of the Dalum Papir A/S and Witcel plants should be effective by the end of 2012, and the closure of the Ivybridge plant in the first quarter of 2014. Around 430 employees are concerned. 

Approximately €25 million will be booked in the third quarter of 2012 to reflect these restructuring operations. Around €8 million of this amount will be disbursed in the last three months of 2012 and most of the remaining balance in 2013. The restructuring measures will result in full-year net cost savings of around €17 million, the bulk of which will be generated beginning in 2013. 

Furthermore, in line with its development strategy focusing on fast-growing market segments and geographical regions, Antalis has finalised two acquisitions of packaging product distributors, in Chile (Abitek) and in the Czech Republic (Branopac). These acquisitions were carried out for an enterprise value of €17 million and will contribute additional full-year sales of around €15 million. 

These operations follow Antalis’ early-2012 acquisitions of Ambassador in the UK and Pack 2000 in Germany in the same sector, helping it to continue building its presence in packaging distribution, afragmented market currently growing at over 5% annually. 

All of these acquisitions will provide Antalis with additional expertise and a strong platform for launching its Packaging business development program in Latin America (it is now No. 2 in Chile) and in Eastern Europe in line with its strategy of expanding in emerging economies. 

Sequana (NYSE Euronext Paris: SEQ), is a major player in the paper industry, boasting leading positions in eachof its two businesses: Antalis and Arjowiggins. Sequana reported sales of €3.9 billion in 2011 and employed some 11,000 people worldwide. 

Source: Sequana