International Paper (IP) is to shut down PM3 for four to five days at its Inverurie mill in Scotland to balance capacity with demand, but the company has confirmed that the mill is still an integral part of its operations.
IP Europe president Paul Herbert said Inverurie was "an essential part of our pan-European business, and a principal service device for the UK market".
"We are seeing weak demand in the uncoated fine sheet and office papers sectors, and the forecast is for a slow summer," he said.
Orders are being concentrated on IPs "most effective machines", and a maintenance shutdown will also be taken on PM4.
"Like the rest of the market leaders in our industry we are aligning production with orders, and will take further downtime if required," said Herbert.
He refuted newspaper reports of unrest at Inverurie, and said concerns may have been expressed due to his failure to appear at the mill since taking up his new role.
The announcement came as IP published its second-quarter results for 2001.
After special items it recorded a net loss of 233m ($313m), compared with net earnings of 192m last year.
Special items included charges for facility closures, realignment and severance, losses on assets of businesses held for sales, and the integration of Champion after the merger.
Chairman and chief
executive John Dillon said the market continued to
be difficult, but that the company was taking a
whole series of actions and initiatives to improve profitability.
Despite improved efficiencies, earnings were hit by the weak pulp and paper markets, and the strength of the US dollar affecting export competitiveness.
Second-quarter net sales fell 1.5% to 4.7bn. Dillon said he "did not expect to see any near-term improvement" in demand.
Story by Andy Scott