Strong franc forces Swiss paper mill to close

The paper mill closure will end 125 years of industrial history in the region Keystone

The closure of a paper factory in canton Bern will leave only one such plant supplying the newspaper and magazine industry in Switzerland from next year.

The 125-year-old Utzenstorf factory will close its doors at the end of 2017, management announced on Tuesday. The decision was blamed on the strong franc that has appreciated significantly in recent years, making its products unsustainably expensive for foreign markets. 

The Swiss National Bank’s decision in January 2015 to cease pegging the franc to the euro was the last straw for Utzenstorf Papier, as the factory is known in German. In December of that year the factory’s finances were restructured, but this failed to sufficiently improve the situation.

Some 200 workers will be affected by the plant’s impending closure. The only silver lining is that the Perlen paper factory in canton Lucerne – Switzerland’s last such manufacturer –- will take over Utzenstorf’s customer relations and recycling operations. The proceeds of the sale will be used to support unemployed staff, Utzenstorf Papier said in its statement.

The deal will also ensure the annual recycling of 260,000 tons of waste paper in the region.

Beat Singer, mayor of Utzenstorf, said the closure would mark the end of a 125-year piece of industrial history in the region. “Two hundred and twenty employees will be directly affected – that hurts,” he told the Swiss news agency SDA. “The speed with which this has happened is frightening.”

CPH Chemie & Papier Holding, which owns the Perlen site, said taking over some facilities in Utzenstorf would result in increased efficiencies for the company.