Forest products firm to shut down

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Efforts to save what once was a major pulp mill on the Hurum peninsula southwest of Oslo have failed. The Swedish owner of the mill at Tofte, Södra, announced on Monday that it would shut down Södra Cell Tofte later this summer, throwing 295 employees out of work.

PHOTO: newsinenglish.no

Södra Cell Tofte will shut down at the end of August, throwing nearly 300 employees out of work. PHOTO: newsinenglish.no

Employees of the troubled Södra Cell Tofte mill were told of the decision at a mid-day staff meeting. Norwegian Broadcasting (NRK) reported that Södra Cell managers decided it would be more profitable to shut down than to sell the large facility.

Employees leaving the meeting told NRK that they’d been told operations would continue until August 24.

Several said they were bitterly disappointed because several potential purchasers have shown interest in the cellulose firm that’s perched on the Oslo Fjord at the southern tip of Hurum in Buskerud County. Newspaper Dagens Næringsliv (DN) had reported in May that even a Thailand-based forest products firm had considered buying Södra Cell Tofte and sent a delegation to assess the company.

Norwegian timber owners weren’t pleased that the Thai company, Double A (formerly Advance Agro), planned to import eucalyptus for processing at Tofte instead of Norwegian timber, but it could have saved the company. Other Norwegian timber owners also expressed interest, but Viken Skog, a forestry cooperative, gave up its effort in early June, citing delays by Södra in making a decision.

The looming shutdown of the Södra Cell pulp mill in Tofte reflects tough times in Norway's forest products industry. PHOTO: newsinenglish.no

The looming shutdown of the Södra Cell pulp mill in Tofte reflects tough times in Norway’s forest products industry. PHOTO: newsinenglish.no

The looming shutdown of Södra Cell Tofte will also threaten as many as 6,000 workers in the timber industry in Norway, because it provided a market for around 25 percent of Norwegian timber. A state plan to bail out the plant at Tofte, by buying Viken Skog’s shares in Moelven, also stranded.

“This is just terrible,” one dejected worker, Dag Kristian Kleven, told NRK. “There’d been some optimism lately, and then we get the opposite message. It’s just terrible.”

Hurum Mayor Monica Vee Bratlie interrupted her summer holiday to travel to the factory at Tofte. “This is a sad day for the employees, for their families and for Hurum and the Norwegian forest products industry,” she told NRK. “This has been a long process and Södra management has kept the employees hanging on to hope for nearly half a year.”

As state welfare and employment agency NAV announced plans to start informing workers of their rights and options, Södra Cell chief executive Gunilla Saltin claimed the Swedish company had “ambitions to sell” Tofte all along, “but we can’t sell for just any price.”

Saltin rejected criticism that Södra just wanted to shut down the plant and misled employees. “We have been very clear that we wanted to sell, but we can’t sell cheaply because then we’d create a dangerous competitor,” Saltin told NRK. “We have said we wanted to remove capacity from the market.”

Martin Kolberg, a Member of Parliament for the Labour Party, and the managing director of the timber owners’ group Norges Skogeierforbund, blamed each other for not helping Tofte stay in business. Kolberg said Södra Cell didn’t want to sell to a company that was backed by the state, since that also could have created a new competitor, and claimed the timber owners “sat still” and didn’t help find a solution.

In the end, Södra managers said the bids that did come in for the plant “weren’t good enough to defend a sale.” A “controlled shutdown” was to begin immediately. “Everyone involved, not least the employees in Tofte, have done a good job for a long time and can be proud of their work,” Saltin said in a prepared statement. Södra managers also said they’d try to help workers find new jobs.

Views and News from Norway/Nina Berglund

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  • Great sectors of Norwegian industry are in a very bad economical shape. had it not been for the oil production, norway had been in a crisis like Greece. But the oil prize is tending down and the oil wells run empty, so the outsights for Norway in the years to come are not very good.