Stora Enso to shut down more production facilities and lay off workers

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Forest industry giant Stora Enso plans to cut its output in the wood products business area by temporarily closing down production facilities, reducing shifts, and extending maintenance stoppages in Finland, Estonia, and the Czech Republic.
      The same economic measures have already been in use in Austria, Sweden, and the Baltic States.
      The company further plans to shut down permanently its joinery component mill in Viljandi, Estonia, and to move its business activities to the Imavere sawmill.
     
Combined with the earlier curtailments of production, the measures announced on Thursday will reduce Stora Enso’s annual total output by about 1.2 million square metres in Finland, the Baltic States, Austria, the Czech Republic, and Sweden, the company announced on Thursday morning.
     
Personnel negotiations over lay-offs of around 460 Enso workers will begin at the Kitee, Tolkkinen, and Kotka sawmills. In addition talks will commence over possible temporary lay-offs as well as permanent dismissals at the Puumerkki Oy distribution company.
      Further plans include reducing the number of workers at the Plana sawmill in the Czech Republic by 30 and at Estonia’s Viljandi factory by 40 persons.
     
Earlier this month Stora Enso completed its personnel negotiations over limiting production at the company’s Ybbs sawmill in Austria towards the end of the year, and at the Kopparfors sawmill in Sweden from the beginning of 2009.
      These measures, together with the cutbacks carried out in Poland and the Baltic States, will reduce the number of workers by about 175.
      The permanent closing down of the Estonian Paikunen sawmill with an annual capacity of 170,000 square metres was advanced to October from the earlier announcement of December.
     
In most Stora Enso sawmills large stoppages are being planned for the Christmas period in order to reduce production and to adjust stockpiles to the weak demand.
      According to Stora Enso, the end-of-year market situation for wood products is particularly difficult because of the weakened demand, lowered prices, and continuous overcapacity in most of the markets. In the company’s view the raw material prices have not come down quickly enough.
      The profitability problems are worst in Finland.
     
“The planned actions will strengthen our position for the very difficult quarters to come, although we cannot be sure that they will be enough. We will limit our exposure to the least competitive raw material regions, aggressively reduce our inventory levels and reorganise our product portfolio to improve profitability”, says Hannu Kasurinen, head of Stora Enso Wood Products, in the company’s stock exchange release.


Previously in HS International Edition:
  UPM uses plant shut-downs to fight slowing demand for forestry products (29.10.2008)
  Stora Enso and UPM issue profit warnings (19.6.2008)

Links:
  Stora Enso press release

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