Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
Palmako, a large wood processing company, announced that by the end of 2022, they will lay off around 100 employees. They have already rearranged their work, i.e. instead of two shifts they now have one shift and they have shortened working time.
The main reasons for the restructuring are uncertainity and increased prices. The CEO of Palmako explained that it is not possible to foresee the demand in the sector. In addition, he explained, the costs of their production has increased more rapidly compared to their competitors in Northern countries. Palmako does not import from Russia anymore, and thus their product prices have gone up as they must import from the Northern countries. At the same time, their Scandinavian competitors have had better opportunities to substitute the wood imported from Russia with domestic wood and thus keep prices lower.
Palmako is part of the Lemeks Group, which is an Estonian forestry and wood industry group active since 1993. They have 34 subsidiaries employing more than 1,000 employees in Estonia and Europe.
There have been several layoffs already in the woodworking sector in Estonia. Recently, Repo Vabrikud (Repo Vabrikud 2022 - EE) announced the layoff of 148 employees. Estonian Forest and Wood Industries Association said that several companies are currently in the process of restructuring. The main reasons being increased prices and decreased demand. Price increase is related to Ukrainian war, but also due to forest policies in Estonia - a lot of forest land has been taken under nature protection in Estonia over the past year, and the summer logging ban was extended to three months. This makes the wood prices high in Estonia.
Eurofound (2022), Palmako, Internal restructuring in Estonia, factsheet number 107674, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/107674.