11/1/2014 12:00 AM
In 2015 Lecta will continue shifting its coated woodfree capacity to specialty products and base paper, in keeping with changes implemented during 2014. During this two year period the reduction in coated woodfree paper capacity at the Group's Spanish mills will reach a total of 100,000 tons.
The drop in capacity is a consequence of the closure of the base paper mill in Uranga (February 2014) and the mill in Sarria de Ter (October 2014), an industrial reorganization process aimed at increasing the efficiency of our manufacturing systems and culminating with the startup of PM7 at the Zaragoza mill at the beginning of November and, lastly, investments in expanding production capacity of specialty papers.
In addition to Lecta's actions, European coated woodfree paper capacity as a whole has also dropped in 2014. As a result, a better balance between supply and demand has been achieved, and according to Lecta estimates, operating rates in the European coated woodfree market have been between 92% and 94% for several months in 2014.
Further closures and shifts in production capacity have also been announced and are scheduled to take place in 2015, which would enable the coated woodfree industry to achieve an operating rate of over 93%. Rates such as these have not been observed in the past 20 years and would represent working at almost full capacity for the majority of the year.
The improvement in supply and demand, with operating rates of above 90% expected over the upcoming years, would represent a turning point for the coated woodfree market, and overall a more favorable scenario for 2015.