Segezha Packaging Group is to close its paper sack factory Segezha Packaging S.A.U in Almeria, Spain, this autumn due to continued losses and the negative market.
According to a company statement, a compensation plan for the plant’s 61 employees will be negotiated.
The economic and financial crisis in the past years has hit the Spanish building and construction industry in particular.
A dramatically reduced demand for paper sacks for cement and building-mix products, combined with surplus capacity, has resulted in a serious decline in sack prices on the Spanish market and a loss of earnings, with no change in the situation expected in the foreseeable future.
“Customers will be supplied and served as usual so the closure will not affect our commitments currently in force,” the statement continued.
The factory closure is part of the ongoing work on and strategy of consolidating Segezha’s sack production units to meet the new, changed market conditions consequent on the economic crisis. The purpose of consolidating production units to create major units is to ensure a certain production volume for the individual units and make them efficient. This strategy allows Segezha to offer our customers the highest quality products and services in the most cost effective manner possible.
Segezha is owned by the Russian ILP Group and the world’s second-biggest manufacturer of paper sacks.