Swiss Timber files for bankruptcy

The largest sawmill in Switzerland, Swiss Timber, has filed for bankruptcy after failing to secure local government agreement for part of its restructuring plan.

The mill in Domat/Ems, which has a capacity of 1 million m³, was only taken over by Mayr-Melnhof last year from Stallinger, but a combination of a lack of timber supply, an 18% exchange rate loss (Swiss franc/euro) and the economic crisis led to “great almost unsurmountable challenges”.

But Mayr-Melnhof said it was ultimately the negative decision of the Grisons parliament about making a CHF6.75m investment in a pellet plant, part of Swiss Timber’s restructuring, that led to the bankruptcy.

“With this decision, the restructuring agreement subsequently failed,” said Josef Dringel, Mayr-Melnhof Holding CEO.

Mr Dringel said he respected the democratic decision of the Grisons parliament.

Mayr-Melnhof admitted that its decision to acquire Swiss Timber in 2009 was a “great risk”.

“For this reason, we did not financially integrate Swiss Timber into the Mayr-Melnhof group but operated it as a full subsidiary,” said Mr Dringel.

“The financial commitment of Mayr-Melnhof in Domat/Ems is manageable and is, as already mentioned, outside of the Mayor-Melhof group. The bankruptcy is no threat whatsoever to Mayr-Melnhof Holding AG.