Finnish packaging company Metsä Board has revealed plans to shut down its Tako mill in Tampere and enhance the efficiency of its Kyro mill in Kyröskoski, Finland.

The decision, driven by prolonged weak profitability, has initiated change negotiations at both mills and associated operations, affecting approximately 360 employees.

The talks may result in up to 215 job cuts and are expected to last at least six weeks. If the closure goes ahead, the Tako mill's operations will cease in 2025.

In October 2024, the company revealed its plans for change negotiations on potential temporary layoffs at its Finnish mills, impacting 1,100 employees due to low projected demand in 2025.

The Tako and Kyro mills have struggled with underutilisation and temporary layoffs due to market conditions. Both mills have been loss-making through 2023 and 2024, with the Tako mill's cost competitiveness further hampered by high energy costs and the limited scale of its production lines.

Its central location in Tampere also restricts development opportunities. Despite the potential closure, Metsä Board assures that customer deliveries will remain unaffected.

The Tako mill houses two folding boxboard machines with a combined annual capacity of 210,000 tonnes, which is approximately 13% of Metsä Board's total annual folding boxboard capacity of 1.6 million tonnes.

Metsä Board anticipates that the proposed measures could enhance the company's comparable earnings before interest, taxes, depreciation, and amortisation by around €30m ($30.8m) annually. The measures would also necessitate asset write-downs of roughly €30m.

The company will detail the one-off costs related to potential redundancies and restructuring at a later stage. These expenses are expected to be reflected in the first quarter of 2025 operating result as an item affecting comparability.

In November 2024, the company announced an investment of €60m to upgrade its Simpele, Finland, folding boxboard mill in late 2025.