Fibre Excellence Files for Insolvency as Costs and Losses Mount

Fibre Excellence has filed for insolvency with the Toulouse Commercial Court, declaring it can no longer meet its short-term financial obligations following the conclusion of a conciliation procedure.

The company reported a liquidity shortfall of several tens of millions of euros. While production continues at its Saint-Gaudens and Tarascon mills, the risk of liquidation remains unless a rescue agreement is reached with public authorities and its majority shareholder, Paper Excellence. A court decision on the potential opening of judicial restructuring proceedings is expected on 27 April.

Fibre Excellence employs around 545 people across its two sites and supports an estimated 3,000 indirect jobs.

The insolvency follows a period of rising input costs and structural losses. Wood procurement prices have increased by approximately 50% since 2022 to around €100 per tonne. With nearly four tonnes of wood required to produce one tonne of pulp, production costs have risen significantly.

The company also reported losses of about €30 million in 2025 linked to its electricity generation activities. Although the mills produce renewable energy from biomass, regulated tariffs have not kept pace with rising raw material costs, resulting in electricity being sold below production cost.

Operational disruptions have compounded financial pressures, including a five-week shutdown at the Saint-Gaudens site in late 2025 and a stoppage at Tarascon beginning in March 2026.

In response, the French government approved a 20% increase in the electricity repurchase tariff in April. Additional measures under discussion include rescheduling public and social debt over up to ten years, state guarantees covering up to 50% of future investments, and integrating the Saint-Gaudens site into the national carbon quota system.

Regional authorities have also indicated support, with Occitanie considering a minority equity stake and Provence-Alpes-Côte d’Azur signalling the possible cancellation of a €2.3 million loan.

Despite these efforts, Fibre Excellence stated that the measures are not yet sufficient to restore immediate solvency. No formal takeover offers have been confirmed, although preliminary interest has been reported. The outcome of the court’s decision is expected to determine whether operations can continue under a restructuring plan or face potential liquidation.