Ahlstrom to close its Bousbecque plant, Supremex to cease production at New York, Ontario facilities

FRANCE – Ahlstrom has announced the closure of its plant in Bousbecque, France, following an unsuccessful attempt to divest the facility.

The plant employs 117 people and has an annual capacity of approximately 12,000 tons. In April, the company consulted with employee representatives to explore options for divestiture or closure.

To secure the long-term future and competitiveness of its parchment paper business, Ahlstrom plans to centralize production at its Saint-Séverin plant in France.

Despite active discussions with local stakeholders, no viable solution was found to keep the Bousbecque plant operational under Ahlstrom’s management or through a potential buyer. The company is still considering options to divest the property.

Ahlstrom has agreed unanimously with French unions regarding the job protection plan and support conditions for the affected employees.

The agreement ensures individual support, including opportunities for redeployment within Ahlstrom, assistance with job searching, business setup or takeover, training, and geographical mobility.

“Our priority is to provide individual and tailored support to all employees who will be affected so that we can find a solution for everyone,” said Guillaume Latourrette, Ahlstrom’s Global Food Packaging Vice-President.

“We will continue to work closely with local and national authorities and other players to support the employees concerned.”

For the second quarter of 2024, Ahlstrom has recognized an impairment loss of €9.8 million (US$10.62 million) on the property, plant, and equipment.

Additional costs associated with the closure will be recorded as items affecting comparability in the third quarter of 2024.

Supremex to cease production at New York and Ontario facilities

In related news, Supremex Inc. announced optimization initiatives to improve costs, efficiency, and productivity within its Envelope segment operations.

These initiatives are expected to result in annual cost savings exceeding US$2 million, primarily from the reduction of rent and other fixed costs, and modest productivity improvements.

Supremex is immediately ceasing production at its small facility in Niagara Falls, New York, and maintaining the premises as a distribution center.

Additionally, the company will close its facility in Concord, Ontario, when its lease expires in February 2025, transferring its most efficient production equipment to other Greater Toronto Area (GTA) envelope plants in Mississauga and Etobicoke over the coming months.

These measures will not result in significant headcount reduction as most employees will be relocated within the company’s existing operations.

Supremex will record restructuring charges of approximately US$2.7 million before taxes from the third quarter of 2024 through the first quarter of 2025.

“With the rising cost of real estate, consolidating envelope production in the GTA will significantly reduce fixed costs and allow us to optimize capacity utilization throughout our network as we methodically pursue the execution of our North American expansion strategy,” said Stewart Emerson, President and CEO of Supremex.

“In addition to optimizing the equipment base in the Toronto region, some redundant equipment will be redeployed to U.S. facilities, providing customers with superior service and high-quality products at the most affordable cost.

“Finally, we expect the operating leverage resulting from these initiatives to improve the profitability and cash flow generation of our envelope activities.”

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