U.S.-based Glatfelter a global manufacturer of engineered materials and personal care and packaging items, has announced the closure of its plant in Ober-Schmitten, Germany, due to the continued financial underperformance of electrical insulation papers and glassines produced at the site.
The Ober-Schmitten plant, part of the Composite Fibers segment, has about 180 employees and is located in Nidda, Germany, with an associated sales office in Suzhou, China. Production capacity at the site ranges between 7,000 and 8,000 tons per year.
The Ober-Schmitten economic committee and works council have been informed of the closure, and negotiations for a compromise of interests and social plan will begin immediately.
«This site has faced continuous challenges due to rising energy, raw materials, and labor inflation, increased competition, and, more recently, declining markets,» explains Thomas Fahnemann, the company’s president and CEO. «We raised prices for specialty papers for electrical and glassine use in the fourth quarter of 2022 to avoid further losses, and subsequently lost significant business to our competitors. Through this process, it has become evident that Glatfelter is unable to compete in this market without a significant investment to streamline operations and substantially reduce overall site production costs for these non-core products.»
«The decision to close Ober-Schmitten followed an extensive process undertaken by management to evaluate all options for the plant, including a potential sale of the business,» Fahnemann continues. «Unfortunately, all attempts to find a new owner who could invest in restoring the long-term viability of the site did not result in a positive outcome.» The total estimated costs associated with the closure of the Ober-Schmitten plant will depend on the final social plan and associated employee separation costs, as well as the closure of the business.