Speciality fibres manufacturer Buckeye Technologies Inc says it is closing down its cotton production operations in Gleuckstadt, Germany, in an attempt to slash $9 million off its annual costs.

The decision will lead to 100 workers being made unemployed as cotton linter pulp production is moved to plants in Memphis, Tennessee, and Americana, Brazil.

Buckeye predicts that restructuring and severance costs will total $10 million on top of a $7m charge to impair the value of the factory. It added that benefits from the decreased spending and cost reduction associated with the transition are expected to be fully realised in 2006.

Buckeye's chairman, David Ferraro, said that although the production of cotton linter pulp was still important to the business, the company could no longer justify the facility "which has seen its economic position deteriorate considerably from the large rise in the Euro over the past two years".