Metsä Group starts talks on US$330M savings plan amid market pressures

SWITZERLAND – Helsinki-based forestry company Metsä Group has begun statutory negotiations across its operations as part of a US$330 million cost savings and profit improvement program announced earlier this year. 

The initiative targets enhanced efficiency in a challenging economic environment, with discussions set to follow local labor laws in each country.

Global trade disruptions have cut demand for Metsä Group’s products, while shifting exchange rates and rising raw material prices have squeezed margins further. 

“Our profitability has been undermined by three factors,” stated Jussi Vanhanen, President and CEO of Metsä Group. 

“First, increased uncertainties in global trade have reduced demand for our products. Second, changes in exchange rates have weakened our result and will continue to do so. Third, the increase in raw material costs and the general cost level has eroded our profitability.”

In a statement, the company outlined focus areas including procurement, logistics, and improvements in the wood supply chain, which represent a large portion of the expected savings. 

Operations restructuring aims to trim fixed costs, alongside cuts in variable expenses. Vanhanen noted that while staff have performed well under the existing model, deeper changes are needed to maintain competitiveness over time.

Preliminary estimates indicate the program could result in 800 permanent job losses worldwide, with around 540 positions affected in Finland. 

These figures encompass changes at Metsä Board, a key subsidiary focused on paperboard for packaging. 

Duties for remaining roles may also shift as part of the adjustments. 

Metsä Group, which employs about 9,600 people globally including 5,600 in Finland, emphasized that the talks exclude any permanent shutdowns of production sites.

New ventures remain on track despite the measures. For instance, the Muoto project, a wood fiber-based alternative to plastic packaging, continues its development. 

According to recent updates, Metsä Group started pre-engineering for a commercial Muoto factory at its Rauma site in Finland, with the phase wrapping up by early 2025. 

This effort, launched in 2020, converts wet wood pulp directly into 3D shapes like trays and containers, cutting carbon emissions and meeting EU packaging rules. 

Other initiatives, such as Kuura, lignin extraction, and bio-based CO2 capture, will proceed per their schedules.

Financial impacts from the program, including related provisions, will appear in the fourth-quarter results. 

The moves come as Metsä Group navigates broader industry shifts toward sustainable materials, with earlier partnerships like the one with Amcor on molded fiber for food packaging highlighting ongoing innovation in eco-friendly solutions.

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