Job cuts warning from toilet paper giant

The maker of Velvet toilet tissue warned today that its UK workforce could bear the brunt of a restructuring set to cost 3,600 jobs.

Svenska Cellulosa, which employs some 7,000 staff at 30 sites across the UK including at Edinburgh, London, Northampton, Darlington and Portsmouth, said the UK, Denmark, Sweden and the Netherlands would be the hardest-hit.

The move, which affects 7% of the group’s global workforce, is part of a major drive to reduce costs after it was hit by tough market conditions and overcapacity.

The group, whose brands include Velvet toilet paper, Tena incontinence pads and Bodyform sanitary towels, employs 50,000 people in 50 countries. The news follows another cost-saving programme implemented in 2004 that led to 1,200 job cuts.

A spokesman said the group could not say at the moment how many jobs would go in the UK, but that it would be among the worst-hit countries. He said the company was currently negotiating with unions.

Some 400 job cuts will be in Sweden with the remainder at its European packaging and hygiene plants. Svenska also has a “forest products” division that makes the pulp used in products such as nappies and incontinence pads.

Only three of its UK sites are involved in forest products, with the remainder in packaging and hygiene.

The cuts are part of a drive to phase out 7% of its tissue production and 17% of cardboard liner capacity. The company is also writing down 2.3bn kroner (€246.4m) of plants and equipment.

The overhaul is expected to cost 3.5bn kroner (€374.9m) and will be implemented by the end of the first quarter of 2007.

Svenska was formed in 1929 as a holding company for some ten forest industry companies producing wood and paper pulp in northern Sweden.

It expanded its range of paper products with the construction of new mills in the 1950s and 1960s, and in 1975 moved into hygiene products.