Papeteries de Malaucene Facility to Close

Source from:  Tobacco Reporter 04/22/2009

Schweitzer-Mauduit International said yesterday it planned to close its finished tipping paper production facility in France. Employees at SMI's Papeteries de Malaucene facility in Provence were notified on Friday of the company's decision, which is expected to result in the loss of 210 jobs. Restructuring expenses are expected to total about $22 million and SMI believes that operating losses for the Malaucene facility will probably increase from current levels given the expected loss of customer orders during the closure process. In a press note, the company said the closure could negatively impact its earnings by about $0.30 per share during the remainder of 2009, but that the absence of losses from the Malaucene facility is expected to benefit earnings during 2010 by more than $0.30 per share. As part of the same note, SMI said it expected to announce an improvement in first quarter 2009 financial results. "We believe the expected improvement in first quarter results validates our strategy to revitalize our base tobacco-related paper business while aggressively growing the franchises for our higher value lower ignition propensity cigarette paper and reconstituted tobacco leaf products," commented Frederic Villoutreix, chairman and CEO. "The divestiture action being announced today, although regrettable in terms of the impact on the employees and communities affected, further advances this strategy and highlights our resolve to rationalize our global manufacturing footprint and re-focus resources to achieve leading positions in core product categories that provide opportunity for competitive advantage. "Following the divestiture of our finished tipping paper facility in France, all of Schweitzer-Mauduit's focus will be on product lines that represent core technologies and in which we hold a number one or two world-wide market position, whether measured by share of the market or major customer's requirements." SMI plans to issue its first quarter 2009 earnings on May 7, when it will include an update of the full year 2009 outlook for its business. Enditem