Sustainable packaging material developer BillerudKorsnäs will shut down paper production at its facility in Tervasaari, Finland.

The facility is equipped with a paper machine with a production capactiy of 100 000t/a of machine-glazed (MG) papers.

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The decision is in line with the firm’s reorganising efforts and will reoprtedly free up Skr100m ($12.2m) of restructuring costs for the company.

BillerudKorsnäs expects the site to be closed by the end of the third-quarter next year.

"The closure of production at Tervasaari is a first step in streamlining our production structure."

BillerudKorsnäs COO and executive vice-president Christer Simrén said: "The closure of production at Tervasaari is a first step in streamlining our production structure. There is right now intensive work being done in the form of feasibility studies that will lead us in our further development of our production structure.

"The machine in Tervasaari is one of the largest of its kind and our staff has done a great job to improve profitability through creative ideas and committed efforts but unfortunately this has not been enough due to external factors."

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The firm has reportedly been considering moving the MG paper machine in Tervasaari to the Swedish Skärblacka integrated unit in August.

Relocating the machine is expected to turn Skärblacka into an efficient production unit for white MG papers worldwide.

BillerudKorsnäs had started an investigation, exploring possibilities for the proposal, which is still continuing, and is expected to be finalised by within the first six months in 2016.