Stora Enso to shut down two factories in Finland and one in Sweden - 1,400 jobs to go

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In response to dramatic cost increases and in order to safeguard long-term profitability, the Finnish pulp and paper company Stora Enso announced today (Thursday) its intention to close down permanently the Summa paper mill and one magazine paper machine at the Anjala mill, as well as its pulp mills in Kemijärvi and Norrsundet in Sweden.
      The number of personnel affected by the planned mill closures will amount to 1,100 jobs lost in Finland and a further 300 in Sweden.
      Stora Enso also plans to divest the laminating paper business and the special coated magazine paper operations at the Kotka mills. The sawmilling operations at Kotka could also be sold off if a satisfactory offer is received, according to the company’s press release today.
     
Moreover, to streamline its administration following the recent reorganisation, the divestment of North American operations and the planned capacity reductions, Stora Enso intends to reduce its administrative staff by about 300 from the current 850 in the Group administrative functions and shared services in the UK, Finland, Sweden, and Germany.
      According to Stora Enso CEO Jouko Karvinen, the intended restructuring actions are based on "specific analyses of marginal costs in wood supply and asset quality".
     
"I also want to be clear that these plans are based on the outlook before implementation of the announced 80 per cent duties on Russian wood exports from January 1st 2009", Karvinen noted.
      "If the issue of the impending higher duties cannot be resolved soon and the dramatically increasing wood cost trends reversed, we will have to take further steps to rationalise our pulp, paper, board and sawnwood production in Finland", Karvinen concluded.
     
Stora Enso recently pulled out of the North American market after sustaining massive losses.
      The company sold off its factory holdings in North America to NewPage, the paper industry subsidiary of the American investment company Cerebrus Capital.
      Stora Enso received just under EUR 2 billion for its North American factories, which were acquired seven years ago with the purchase of Consolidated Papers. That deal was worth EUR 4.9 billion.


Previously in HS International Edition:
  Stora Enso pulls out of North America after massive losses (24.9.2007)
  Stora Enso reorganisation may lead to lay-offs (6.9.2007)
  Wood shortage threatens pulp production in Kemijärvi (15.6.2007)
  President Halonen says all possible steps taken over timber tariff issue (4.6.2007)

Links:
  Stora Enso press release 25.10.2007: Stora Enso to cut magazine paper, newsprint and pulp capacity and reduce administrative staff

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