The coronavirus Pandemic has caused a breakdown in paper demand. Navigator made the unprecedented decision to reduce production. Suspension will be for now 30 days.
Starting Wednesday, Navigator decided to suspend paper production on some machines. The reduction in orders led the company to take an unprecedented decision: to reduce production by 700 tonnes per day. In other words, a 15% drop in production. But the measure, which lasts 30 days and will not affect workers’ income, may reach a reduction of two thousand tons per day.
“In the last four weeks, Navigator registered an important reduction in its order book, with several orders being canceled and postponed until the end of this quarter and after, namely orders to be produced in April and May,” explains the company in a statement sent to the market on Tuesday.
For this reason, the company informed the market that it was “forced to reduce, its paper output in line with the current market conditions in the 120 countries where it operates, and will stop gradually and temporarily production in some of its UWF paper machines.”
This suspension will take place from April 22nd and “is currently estimated to last for a period of 30 days “estimated to last for a period of 30 days,” says Navigator implying that if the situation in the markets does not improve the measure can be extended. “The stoppage of these machines will result in a reduction of output of 700 tons per day with the possibility of reaching a maximum reduction in global output of almost 2000 tons per day,” the Navigator explains.
The Semapa group company guarantees that this stoppage “will have no impact on workers’ income”. And that the factories in Aveiro and Vila Velha de Ródão will not be affected, continuing “to operate within normality.”
However, the third largest domestic exporter will be forced to “significantly” revise its investment plan for this year and adopt cost containment measures to offset the reduction in its turnover, which last year was 1.68 billion euros. Navigator wishes to stress that “it currently has a comfortable liquidity situation, resulting from a significant increase in cash position and available credit lines, as well as a thorough management of working capital.”