Today (4 June) the Uetersen-based mill announced that it had been has been “adversely and unforeseeably affected” by unexpected increased energy costs and procurement prices for raw materials.

“During the current year, management has implemented extensive measures to increase operating profitability,” the firm said in a statement.

“Despite these efforts, the latently rising variable costs could not be offset by implemented price increases, partly due to the company's lower-than-expected revenues.”

As a result of the situation, the company intends to restructure under the German Insolvency Act, and applied to the local court in May.

Andreas Romey of law firm Eckert Rechtsanwälte Steuerberater Partnergesellschaft in Hamburg, was appointed as provisional administrator on 27 May.

He will examine the financial situation and supervise Feldmuehle’s management.

“However, the company's management retains power of disposition.”

Feldmuehle employs around 200 and typically ships more than 80,000 tonnes of label and flexible packaging papers a year, to customers in 90 countries around the world.

It claims a market-leading position in wet-strength label papers.

Feldmuehle said that restructuring within the framework of self-administration would give the company's management the opportunity to undertake and implement “all necessary measures to improve profitability and thus to take measures towards the company's sustainable competitiveness”.

Production is expected to resume this weekend.

In 2018 Feldmuehle underwent a similar process twice, during which it halved its workforce, shut down its second paper machine and exited the graphic papers market.

Feldmuehle dates back to 1904. At one time it was part of Stora Enso, but was sold and became independent again a decade ago.

Fellow German mill Kabel Premium Pulp & Paper – which had at one time also been part of Feldmuehle – announced it would shut down last month.