Swiss-owned Interspan will close its particleboard plant in Vásárosnamény by March 2011, laying off most of its almost 200 employees, reports regional daily Kelet-Magyarország.

The owners of the factory, the Swiss Krono Group blamed the closure on higher wood and energy costs when compared with neighbouring countries.

The increased wood costs were due to large-scale electricity generating plants being built in the country in recent years and being fuelled by wood.

The mill has three single-opening lines and capacity of ca 330,000m3 /year, with around 75% of that production being surfaced on three short-cycle lines.

Barnabás Seregi, who heads the Krono Group unit in Hungary, said the owner would have had to invest up to HUF20bn (US$95.2m) to modernise the plant but was unsure it would recoup the investment.

Interspan will keep 10-20 staff for sales and logistics.