RAUTE CORPORATION INSIDE INFORMATION June 9, 2025 at 9:00 a.m. EET
Raute to streamline its global manufacturing network and close its production
facility in Changzhou, China
Raute's strategic objective is strengthening operational efficiency and securing
its competitiveness in a changing market environment. In line with this
objective, Raute has decided to close its production unit in Changzhou, China,
as part of a broader restructuring of its global manufacturing network. The
decision is driven by weak market demand in China, which results in
profitability challenges at the unit, as well as Raute's plan to concentrate
production resources more cost-effectively and increase flexibility in
manufacturing.
Following the closure decision, Raute will book impairments and provisions
affecting comparability in the estimated total amount of EUR 3.8 million. As a
result of the measures, Raute's fixed costs will decrease by approximately EUR 2
million annually.
Raute's Changzhou facility has focused on the manufacture of the company's R3
product category, which represents Raute's lowest price point technology level.
The demand for these products has not developed as expected in the Chinese
domestic market. Customer needs have focused from R3 product category towards
even simpler and lower-cost solutions, for which Raute currently has no offering
or strategic interest in product development.
R3 products have generated moderate interest outside China, and to meet global
demand, Raute can leverage its existing production channels outside China. This
change will not affect the availability of R3 products or the spare parts and
maintenance services Raute provides to its customers.
Raute's Chinese subsidiary, Raute (Changzhou) Machinery Co., Ltd, currently
employs approximately 40 people. The employment relationships will end in a
controlled and orderly manner. Employees will be informed of the changes
immediately, and discussions regarding the impacts will take place.
“We have carefully assessed the role and future prospects of the Changzhou
facility. In order to secure the competitiveness of our business, we must adapt
to market conditions, which unfortunately means closing an unprofitable unit.
Raute will continue to offer R3, R5, and R7 solutions also in the Chinese
market, but instead of local manufacturing, the production chain for R3 products
will be optimized and transferred elsewhere in Raute's internal and external
production network. We are committed to open and respectful dialogue with
employees throughout this transition”, says Mika Saariaho, President and CEO of
Raute.
Raute Corporation
Mr. Mika Saariaho
President and CEO
DISTRIBUTION:
Main media, www.raute.com
FURTHER INFORMATION:
Mr. Mika Saariaho, President and CEO, tel. +358 40 154 9393
RAUTE IN BRIEF - Making Wood Matter
Raute acts as a partner for a sustainable future for the wood products industry.
Our technologies cover various production processes as well as supporting
digital and analyzer solutions for industrially manufactured wood products. In
addition, we offer comprehensive service concepts from spare parts to regular
maintenance and production modernizations. Our innovative technologies, software
and service concepts are designed to support the efficient use of natural
resources in our customers' production. Raute is the only turnkey supplier in
the world that offers mill-wide technology solutions for veneer, plywood and LVL
production. Raute's head office and largest production plant is located in
Lahti. Our other production facilities are located in Kajaani, Vancouver,
Canada, Changzhou, China and Pullman, Washington State, USA. In 2024, Raute's
net sales were EUR 204.6 million The Group's headcount at the end of 2024 was
783. More about Raute: www.raute.com.