Cham shuffles operations to prepare for future

Cham Paper Group is restructuring and reorganizing its operations to prepare it for the future as it reports declining 2011 results; a move that will see its full-time workforce cut by more than two-thirds and land at its Cham, Switzerland facility repurposed.
 
Cham Paper develops, produces and distributes coated speciality papers worldwide. It manufactures papers for packaging and labels in its Consumer Goods division; release papers for films, tapes or labels, and backing papers for industrial casting and lamination processes in its Industrial Release unit; and inkjet and sublimation papers for large format print within its Digital Imaging operation.
 
In a statement regarding its 2011 performance, Cham Paper said it is withdrawing from less attractive markets in Switzerland and Italy. The utilization of production capacity can be thoroughly reorganized and optimized on a per-location basis by the simultaneous relocation of selected product lines to the mills in Italy, it said. It will focus on Consumer Goods, Digital Imaging and glassine papers in the future, as they are areas where it has managed to show profitable growth and the long-term prospects are also favorable.
 
At its Cham site in Switzerland, the company intends to focus on its core competency of surface coating. New curtain-coated speciality papers for the Consumer Goods segment and the increasingly popular Digital Imaging products will continue to be produced in Switzerland in the future as well. In order for the Cham mill with its special coating machines to be able to concentrate fully on value-added surface treatment technologies, base paper will be sourced on the market in the future. In so doing, the Group's site in Switzerland will be transformed into a technology, R&D and coating center, and specialist solution provider for a wide variety of industries.
 
The proposed steps will result in the shutdown of base paper production in Cham. Plans have been made to decommission the PM4 paper machine in the first half of 2012 and the PM5 by the end of 2013. The large volumes of speciality papers for the tobacco industry – which currently provide for a significant part of capacity utilization in Cham – will be produced in Carmignano, Italy by the end of 2013. The mill in Carmignano is already focusing completely on Consumer Goods in general, and on flexible packaging products in particular. The growing market in China will continue to be supplied from Europe.
 
The Condino site, also in Italy, will be further expanded and will concentrate on the production of glassine papers. During the past three years, sales of these papers have increased from 37,000 tonnes to 45,000 tonnes. Plans have been made to expand capacity in excess of 20 percent by 2014.
 
Site location and product portfolio optimization throughout the Group will result in a substantial improvement in cost structures and a reduction in the Group's dependence on the development of the Swiss franc, it said. In doing so, Cham Paper claimed it is creating a basis on which profitable growth will be possible.
 
The proposed restructuring of Cham Paper will lead to a gradual reduction in the number of full-time employees from the present level of 312 to approximately 100 by the beginning of 2014. The first decommissioning step will take place with the proposed shutdown of the first paper machine in the first half of 2012. The second step will be completed by the end of 2013 with the proposed production shutdown of the second machine.
 
By concentrating on R&D and surface coating technologies, substantially less land area will be needed and a large portion of the underutilized industrial park located in the center of Cham will be available for other uses.
 
To this end, the board of directors has commissioned a number of studies to investigate a step-by-step repurposing of this land area. In the decades to come, new residential and employment opportunities are to be created on the 100,000 sq m grounds providing direct access to the A4 and the north bypass of Cham. Cham Paper will be working hand-in-hand with local authorities to ensure ‘optimal perspectives are created for the community of Cham, its present and future inhabitants and commercial enterprises, as well as for the Cham Paper Group’. The preparation and planning work for the requisite rezoning of the factory grounds to a mixed zone has been commenced and will take some time, the company said.