Duni has entered into trade union negotiations with the intention to close one of three production units in its Rexcell Tissue & Airlaid subsidiary, putting the jobs of 110 staff at risk.
The unit in Sweden produces and sells material focused on the hygiene products sector, and the company said it is not profitable.
It is expected to be fully closed during the first quarter of 2014.
It said: “Duni’s core business comprises products which enhance the atmosphere around the set table and it is there that the company shall grow.“ The consequence of the decision is that, after having attempted to develop the business, Duni will no longer continue to invest in the production of input materials for the hygiene products sector.
“The decision is a difficult one since it affects many people, but it is important for Duni to follow the strategy and focus on the business which provides the best return for the future.”
It added that the assessment has been made that acceptable profitability cannot be achieved in the foreseeable future.
The decision concerns around 110 employees at the Rexcell subsidiary.
The closure of the unit entails a one-off cost of SEK 83m which was incurred in the fourth quarter of 2012.
However, it is expected that Duni’s net debt will fall in the long-term as a consequence of the decision and that sales from the production unit primarily comprise external sales for the tissue business area.
The reduction in sales is not expected to have any negative impact on the Duni Group’s operating income.