Losing the Lease at Laajasalo


Neste Oil announced Aug. 29 that it will close a lubricant blending plant in Helsinki – Neste’s only such facility – by the end of 2009. Management said it is being forced to take the action because the city has designated the property for residential development.

Officials declined to discuss the possibility of opening another blending plant or the fate of 45 employees at the existing facility, known as the Laajasalo plant.

Labor laws in Finland require us to enter a negotiation process with our employees that will last six weeks, Vice President for Oil Retail Esa Miettinen said. After that we will be able to say what our plans are.

Neste, which is based in Espoo, Finland, leases the site of its plant and warehouse from Helsinki through a contract that expires at the end of 2010. The city has informed the company that it plans to rezone the property for residential use and will not renew the lease. The company must cease operations a year earlier to allow time to demolish its buildings and perform any necessary clean-up.

Although Nestes finished lubricant business has a smaller scope than its base oils unit, which sells Group III stocks throughout much of the world, Miettinen said the company would like to stay in the lubricants market. It sells lubes mostly in the Baltic region.

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