Raute Oyj: Raute to streamline its global manufacturing network and close its production facility in Changzhou, China
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.