Raute Corporation has announced the closure of its production facility in Changzhou, China, as part of a broader plan to restructure its global manufacturing network. The decision stems from weak market demand in China, which has impacted the unit’s profitability, and from the company’s strategic goal to optimize production resources, enhance flexibility, and strengthen competitiveness in a changing market environment.
The closure will result in non-recurring items amounting to an estimated eur 3.8 million, related to impairments and provisions. The restructuring is expected to reduce Raute’s fixed costs by approximately eur 2 million annually.
The Changzhou facility has been dedicated to manufacturing the R3 product line, Raute’s most basic technology offering. However, domestic demand in China has shifted toward even simpler and lower-cost solutions—an area where Raute has no current offerings or strategic plans for product development.
While international interest in R3 products has been moderate, Raute will continue to meet global demand through its existing production channels outside China, ensuring continued availability of R3 products as well as spare parts and maintenance services.
The closure will affect around 40 employees at Raute (Changzhou) Machinery Co., Ltd. The company has stated that employment relationships will be handled in a structured and respectful manner, with employee consultations beginning immediately.
“We have carefully evaluated the role and future of the Changzhou facility. To safeguard the competitiveness of our business, we must respond to market realities, which unfortunately means closing a unit that is no longer profitable. Raute will continue to offer R3, R5, and R7 solutions in the Chinese market, but R3 production will be transferred and optimized within our global internal and external manufacturing network,” said Mika Saariaho, President and CEO of Raute.
