AVILON SHUTS DOWN TEMPORARILY - REACHES MAXIMUM CAPACITY IN AUGUST
Avilon Ltd, part of Neo Industrial's Viscose Fibers business, has decided to temporarily shut down production in its Valkeakoski-based factory in April. The shutdown is due to availability problems of dissolving pulp, the main raw material for viscose fiber.
As the price of cotton stays high, the global demand of both viscose and dissolving pulp has exceeded supply. Hence, Avilon has not been able to ensure the continuous availability of the raw material in order to maintain profitable production volume.
During the shutdown, Avilon will complete ongoing negotiations concerning a long-term solution for its raw material needs, together with selected suppliers. According to Avilon's estimates, the new arrangements of its pulp management enable restarting the factory's main production line in July at the latest.
The company has also made a decision on the ramp-up of a second production line, based on the prospects of the raw material undertaking, as well as the very good and continuously growing demand for viscose fiber. Avilon estimates that it will start the Valkeakoski factory's second line in August, after which the factory will be in full production capacity.
The factory was successfully started in January, and it has delivered some 4,200 tonnes of high-quality viscose fiber in the first quarter of 2011.
Due to the temporary layoffs caused by the shutdown, Avilon will start cooperation negotiations with its production staff on 4 April, 2011. No redundancies are expected.
Neo Industrial will give more information concerning Avilon's cooperation negotiations as the process is completed.
Neo Industrial Plc
Markku E. Rentto Managing Director
FURTHER INFORMATION: Claus Carlsen, Director, Avilon, tel. +358 20 780 0502
www.neoindustrial.fi
Neo Industrial Plc's strategy is to invest mainly in industrial companies with similar synergic benefits. The aim of investments is with active ownership to develop the purchased companies and establish additional value. Returns are sought through both dividend flow and an increase in value. Neo Industrial's B shares are listed on the NASDAQ OMX Helsinki Stock Exchange.
© 2011 GlobeNewswire
