M-real plans to substantially reduce the number of Zanders products and streamline its operations.


We have already reduced the number of M-real products available, and this will be a large number when combined with the Zanders products, said executive vice-president and chief financial officer Veli-Matti Mynttinen.


Full details of the streamlining will be revealed in the groups next interim results.


M-real and Myllykoski have also signed an agreement concerning their production, marketing and sales partnership. M-real will sell its 50% share in the jointly owned MD Papier to Myllykoski in a 187m deal.


The changes came as M-real issued its first-quarter results, which showed a rise in sales and pre-tax profits despite weakened demand for nearly all of its main products.


Net sales increased by 68% to 1.1bn (EUR 1.8bn), lifted mainly by the inclusion of figures for MoDo Paper and Zanders Feinpapiere.


Lower product demand and shutdowns at Kangas and Husum mills cut into profitability. The shutdowns were taken as the mills switched production to coated paper grades.


Despite the cutbacks, pre-tax profits rose by more than 30% to 74m, but delivery volumes in all product groups decreased.


M-reals merchanting group management will move to London during the second quarter after the report highlighted that the UK was M-reals most important paper merchanting market.


A spokesman for M-real confirmed that along with the management move, rumoured to be to Surbiton in Surrey, the name of New Merchanting Force will change.


Story by Andy Scott