Pfleiderer Closing Plant in Germany

Neumarkt, Germany, Oct. 11, 2010--Pfleiderer AG said it will permanently shut down its production plant in Gschwend, Germany.

The reason for closure is the sharp decrease in demand for particleboard caused by the recession, which is leading to structural adjustments in the industry, Pfleiderer said.

The Gschwend plant has been on short-time work for the past 13 months due to sustained operation at well below its optimum capacity, the company said.

"Even in the long term, there is still no recovery in sight for the market for raw particleboard," said Michael Wolff, managing director of Pfleiderer's Western Europe Business Center.

"In view of substantial overcapacity, it is therefore absolutely essential to adjust our production output. We are convinced that the phase of consolidation in the engineered-wood industry will continue.

"Furthermore, our margins are under pressure from sharp increases in raw-material prices."

Pfleiderer said it will increase its prices in Western Europe by a further 20 to 30 euros per cubic meter this November.

Pfleiderer already adjusted its production capacity at the Gschwend plant to significantly weaker demand more than a year ago.