Sappi Europe plans restructuring at Alfeld mill amid market decline

GERMANY – Sappi Europe has announced the start of a formal consultation process with employees at its Alfeld Mill in Germany, signaling a significant step toward a proposed partial restructuring of the facility.

The decision comes in response to persistent financial challenges and a structural decline in demand for certain paper products across the European market.

The proposed changes could result in the closure of several key assets at the site, including Paper Machine 1, Paper Machine 4, Offline Coater 2, and the Sheet Finishing operations.

If implemented, the restructure may impact up to 200 jobs at the mill.

Despite various operational improvements over recent years, including cost-cutting measures and product portfolio adjustments, Sappi says the mill’s current setup remains too complex and financially burdensome to sustain in the long term.

The company noted that while losses at Alfeld have been reduced, shifting customer needs and a general oversupply in the European paper market continue to challenge profitability.

Sappi’s proposed actions aim to align production capacity with current demand trends, simplify operations, and shift focus toward high-margin, woodfibre-based materials that remain in demand.

The company emphasized that this restructuring is critical to ensuring the future viability of the Alfeld site and supporting long-term sustainability goals.

This announcement reflects broader turbulence within the European paper and pulp industry, where energy costs, environmental compliance pressures, and digitalization are accelerating shifts away from traditional paper products.

According to the Confederation of European Paper Industries (CEPI), graphic paper consumption in Europe declined by over 20% between 2020 and 2023, with expectations of further contraction.

Earlier in 2024, other European producers also took steps to consolidate operations.

UPM announced temporary downtime at several of its newsprint machines, while Norske Skog has continued converting legacy paper lines to produce packaging board and recycled containerboard, signaling a widespread industry pivot toward packaging, hygiene, and specialty grades.

Sappi, a global leader in woodfibre-based renewable materials, has been expanding its footprint in sustainable packaging and dissolving pulp.

The company recently announced investments in South Africa and North America to support growth in packaging papers and textiles derived from cellulose.

While no final decision has been made, Sappi says it is committed to engaging with employee representatives and stakeholders to explore alternatives and mitigate social impacts.

The consultation process will play a key role in determining the scope and timing of any changes at the Alfeld Mill.

The outcome could reshape the facility’s role within Sappi’s European operations, potentially refocusing it around more profitable product lines aligned with long-term market trends.

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