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Net sales of Suominen Nonwovens up by 13%
02 Sep '08
6 min read
Net sales of Nonwovens increased by 13 per cent to EUR 41.7 million. Deliveries of thermobonded material for hygiene products increased clearly. In hydroentangled nonwovens, the focus of sales shifted to Europe. There was a clear increase in internal deliveries.
The second quarter brought some increases in sales prices. In raw materials, the price increase of viscose took a downturn and the rise in plastic prices also slowed. The high price of raw materials nevertheless eroded the business unit's margins.
Implementation of the operational enhancement programme was continued, and the decision was taken to discontinue the unprofitable production of pulp-based nonwoven for wipes.
Net sales of Flexible Packaging totalled EUR 37.9 million (38.7) and operating profit EUR 0.7 million (2.1). Net sales and sales volumes decreased slightly from the previous year due to the decrease in hygiene packaging. The demand for carrier bags recovered after the first quarter.
Deliveries of food packaging were on the level of the previous year. Sales development of labels and security and system packaging remained positive. Raw material prices saw a downturn in the spring, but resumed their upward trend by early summer.
It was not possible to pass on all the increases in raw material prices to sales prices. Production at the Polish plant increased by 20 per cent thanks to the investment in the printing machine made in 2007.
The stock of finished products was increased in anticipation of lower production volumes during the summer period. Employee negotiations were concluded in the business area, and
will result in a personnel reduction of some 50 people at the Finnish plants during the autumn.
Mr. Petri Rolig was appointed President and CEO of the Company as of 1 May 2008. Mr. Mikko Pellinen was nominated Vice President and General Manager of the Flexible Packaging business area.
He will join Suominen on 1 November 2008 at the latest. The Corporate Executive Team comprises, the President and CEO, and the Vice Presidents and General Managers of the Wipes and Nonwovens, and Flexible Packaging businesses, and the Vice President and CFO.
Consumption of the main products produced by Suominen is expected to grow faster than general consumption on the Company's geographical markets. The focus of Suominen's operations is on securing improvement in profitability, cash flow and capital structure.
The ongoing cost-saving and efficiency enhancement programme is expected to improve Suominen's competitiveness. The prices of main raw materials continued to rise during the first half of the year, and the rise is expected to continue.
Also energy prices are expected to remain high. Actions are underway in Group's units to increase sales prices to reflect expected rises in costs.
Previously, the guidance concerning outlook for the current year was that Suominen's underlying operating profit is expected to improve on the previous year, and accelerating towards the end of the year.
Present general expectations indicate substantial increases in raw material prices affecting the underlying operating profit to be on the level of the previous year. Whole year result is expected to be negative. No major changes are anticipated in the level of net sales.
The estimate concerning the development of Suominen's net sales is based in part on forecasts and action plans provided by the Group's customers.
Changes in these forecasts and plans resulting from changes in the market situation or changes in customers' inventory levels could affect Suominen's margins.
Nonwovens and Flexible Packaging purchase oil-based raw materials to the value of some EUR 45 million annually. In addition, significant amounts of viscose, printing inks, and solvents are also purchased. Rapid fluctuations in the world market prices of raw materials affect Suominen's margins.
Suominen's cost-saving and operational enhancement efforts are focused on areas such as improving yield, increasing machine speeds, and reducing changeover time. The benefits of these efforts will be most evident if p
The second quarter brought some increases in sales prices. In raw materials, the price increase of viscose took a downturn and the rise in plastic prices also slowed. The high price of raw materials nevertheless eroded the business unit's margins.
Implementation of the operational enhancement programme was continued, and the decision was taken to discontinue the unprofitable production of pulp-based nonwoven for wipes.
Net sales of Flexible Packaging totalled EUR 37.9 million (38.7) and operating profit EUR 0.7 million (2.1). Net sales and sales volumes decreased slightly from the previous year due to the decrease in hygiene packaging. The demand for carrier bags recovered after the first quarter.
Deliveries of food packaging were on the level of the previous year. Sales development of labels and security and system packaging remained positive. Raw material prices saw a downturn in the spring, but resumed their upward trend by early summer.
It was not possible to pass on all the increases in raw material prices to sales prices. Production at the Polish plant increased by 20 per cent thanks to the investment in the printing machine made in 2007.
The stock of finished products was increased in anticipation of lower production volumes during the summer period. Employee negotiations were concluded in the business area, and
will result in a personnel reduction of some 50 people at the Finnish plants during the autumn.
Mr. Petri Rolig was appointed President and CEO of the Company as of 1 May 2008. Mr. Mikko Pellinen was nominated Vice President and General Manager of the Flexible Packaging business area.
He will join Suominen on 1 November 2008 at the latest. The Corporate Executive Team comprises, the President and CEO, and the Vice Presidents and General Managers of the Wipes and Nonwovens, and Flexible Packaging businesses, and the Vice President and CFO.
Consumption of the main products produced by Suominen is expected to grow faster than general consumption on the Company's geographical markets. The focus of Suominen's operations is on securing improvement in profitability, cash flow and capital structure.
The ongoing cost-saving and efficiency enhancement programme is expected to improve Suominen's competitiveness. The prices of main raw materials continued to rise during the first half of the year, and the rise is expected to continue.
Also energy prices are expected to remain high. Actions are underway in Group's units to increase sales prices to reflect expected rises in costs.
Previously, the guidance concerning outlook for the current year was that Suominen's underlying operating profit is expected to improve on the previous year, and accelerating towards the end of the year.
Present general expectations indicate substantial increases in raw material prices affecting the underlying operating profit to be on the level of the previous year. Whole year result is expected to be negative. No major changes are anticipated in the level of net sales.
The estimate concerning the development of Suominen's net sales is based in part on forecasts and action plans provided by the Group's customers.
Changes in these forecasts and plans resulting from changes in the market situation or changes in customers' inventory levels could affect Suominen's margins.
Nonwovens and Flexible Packaging purchase oil-based raw materials to the value of some EUR 45 million annually. In addition, significant amounts of viscose, printing inks, and solvents are also purchased. Rapid fluctuations in the world market prices of raw materials affect Suominen's margins.
Suominen's cost-saving and operational enhancement efforts are focused on areas such as improving yield, increasing machine speeds, and reducing changeover time. The benefits of these efforts will be most evident if p
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