This week, Holmen Paper will begin negotiations on reducing the workforce at the paper mill in Hallstavik. Around 150 people will be affected.

"As the market for printing paper continues to be weak, we are forced to take steps to maintain our competitiveness and improve profitability," says Arne Wallin, head of Holmen Paper. "Unfortunately, these measures mean that a number of employees will have to leave the company."

Holmen Paper has already reduced its staff, improved the product mix and shutdown unprofitable production capacity. In Hallsta the recovered paper operation and one paper machine was shutdown in 2008.

"We've succeeded in reorganising production at Hallsta so that we manufacture more improved products such as MF Magazine and book paper. But to achieve acceptable profitability, we also need to lower our fixed costs. Combined with the continuous efforts of further developing our products, among others through a rebuild of PM 11, this lays the foundations for securing a future for the mill that is sustainable in the long term," says Arne Wallin.

For further information please contact:

Jonas Lindell, public communications manager Holmen Paper, tel. +46 (0)70 323 20 13

Ingela Carlsson, public relations director Holmen, tel. +46 (0)70 212 97 12

In its capacity as issuer, Holmen AB is releasing the information in this press release in accordance with Chapter 17 of the Swedish Securities Market Act (2007:528). The information was distributed to the media for publication at 11.00 CET on Monday 21 June 2010.