German mill begins insolvency proceedings
Friday, June 29, 2018
German paper mill Zanders has opened insolvency proceedings, citing reasons including increases in raw material and energy costs.
The company said that following its acquisition by current owner Mutares in May 2015, and with the support of its employees, important restructuring successes were achieved, a considerable part of its investment and repair bottleneck was eliminated and its processes were “significantly improved”.
But despite sales growth of an average of 12% between 2015 and 2017, the company said price increases for required raw materials – pulp, chemicals and coal for its own power plant, had a negative impact on its restructuring. In the past 12 months alone, it said the cost of these raw materials had risen by more than 40%.
Following a request from Zanders’ management to begin the insolvency proceedings, Cologne District Court appointed lawyer Marc d'Avoine as appraiser last Friday (22 June).
He has now been appointed as provisional insolvency administrator and will manage the business in collaboration with his team as well as restructuring director Igor Ferlan and external consultants.
The company said its capital assets are currently being collected and evaluated in an objective manner and an inventory is also being carried out. Claims are being recorded, examined and evaluated, and the business expects this will take “weeks to complete”.
While the nature of the restructuring has not been disclosed, Zanders said work on the business plan and its restructuring concept is underway, with an initial interim result expected by the end of July. It added Mutares continues to support the restructuring in the interests of all involved.
A Zanders spokesperson said: “The restructuring process continues, we have a team here on board and we are very optimistic we will be able to create a stable future for Zanders.”
Around 500 employees and 22 apprentices currently work for the business, which said its operations will continue as normal “in order to obtain the possibilities for a reorganisation”, with customers’ deliveries unaffected.
The firm’s management and workforce, as well as key suppliers and customers, have already signalled support for the continuation and reorganisation of the firm, Zanders said, while wages and salaries are secured through insolvency payments until the end of August.
Johann Wilhelm Zanders founded the company in Bergisch Gladbach, near Cologne, in 1829. The business still operates the Gohrsmu¨hle paper mill there today and produces around 100,000 tonnes annually.
Until the end of the 1980s the business exclusively supplied special papers but, since 2012, it has also offered graphic mass papers. The company’s UK merchants are Antalis and Fenner Paper while it also sells some of its products direct.
Zanders is the latest German paper mill this year to enter insolvency proceedings following Feldmuehle Uetersen and Papierfabrik Scheufelen in January. Earlier this month Feldmuehle confirmed that it had been acquired, with more than 95% of jobs saved.