The French government has stepped in with financial support measures for Fibre Excellence, the pulp producer facing potential closure of its two key mills in Tarascon (Provence) and Saint-Gaudens, as announced by Industry Minister Delegate Sébastien Martin on 2 March.
The aid package, potentially worth up to €150 million, aims to restructure the company’s debt, ease cash flow pressures, and back a modernization investment plan for the sites, which together produce around 550,000 tons of market pulp annually.
The intervention follows months of escalating warnings from unions, local officials, and the company itself about insolvency risks by late March 2026. In January, inter-union groups CGT-FO-CFDT at both sites triggered an alert over surging wood costs (now €100/ton, with 4 tons needed per ton of pulp), unfavorable euro-dollar parity impacting exports, and high energy expenses. By mid-February, the group’s leadership had set a mid-March deadline for state action on electricity buyback rates, citing a €30 million loss from that activity in 2025 despite a €357 million group turnover (11% from power sales).
Production disruptions have already hit: Saint-Gaudens idled from 17 October to 24 November 2025 due to weak European pulp demand—particularly in Asia—and implemented partial unemployment for its 271 staff; Tarascon shut briefly over the Christmas period using staff holidays. Recent reports indicate Tarascon halted again from 2 March due to wood shortages, threatening 700 direct jobs and up to 10,000 indirect roles in forestry, subcontractors, and local economies.
The proposed state aid splits into two €75 million tranches: one for debt relief (waiving interest, spreading public/social debts over 10 years, integrating Saint-Gaudens into carbon quotas) and a second as a 50% guarantee on industrial upgrades. Fibre Excellence welcomed the move as “a first step” but stressed ongoing needs for secure timber supplies and better electricity terms, with CEO Jean-François Guillot noting a recent €9 million cash injection from parent Paper Excellence. The Ministry emphasized shareholder responsibility, stating it “won’t bail out all struggling firms” without private commitment.
This crisis unfolds despite prior investments: Paper Excellence’s 2025 takeover of Tarascon (approved mid-2024) included €180 million pledged for modernization, environmental upgrades, and biomass power by 2025. The mills had also notched technical wins, like a successful Valmet press section rebuild at Provence (started April 2024) and launch of UKP-E kraft pulp for electrical insulation in August 2025.
Fibre Excellence, owned by Indonesia’s Paper Excellence, operates as one of France’s top 10 wood processors. Regional senators have flagged risks to the forest-wood supply chain, urging swift resolution. Discussions continue as the 31 March deadline looms.
image: iStock.com/kevron2001
