Pulp and Paper Canada

Stora Enso cuts

October 30, 2007  By Pulp & Paper Canada

Helsinki, Finland — Stora Enso has announced plans to cut its magazine paper and newsprint capacity by 505,000 ton…

Helsinki, Finland — Stora Enso has announced plans to cut its magazine paper and newsprint capacity by 505,000 tonnes of paper annually and reduce pulp by 550,000 tonnes annually.
Citing dramatic cost increases, the company will permanently close down its Summa paper mill, one magazine paper machine at Anjala mill, and the pulp mills at Kemijrvi and Norrsundet to attain the above reductions. A total of about 1400 employees will be affected, 1,100 in Finland and 300 in Sweden.

It will also reduce its Group administrative staff by 300, a 35% reduction intended to streamline administration following recent reorganization and divestment of the North American operations. It will take a non-recurring charge of EUR 380 million. The company anticipates these measures will result in annual cost savings of EUR 140 to 160 million annually, with full impact by 2009.


Stora Enso also plans to divest its mills at Kotka in Finland, as part of a plan to focus its portfolio, and may sell the Kotka sawmill operations if a satisfactory offer is received.

“These closures, production rationalisations and staff reductions, however painful, are crucial for Stora Enso to be competitive long-term,” said Stora Enso CEO Jouko Karvinen. “To wait in the hope of better times would lead to more severe actions in the future. To reduce our wood costs as rapidly as possible, in parallel with the permanent closure plans we will start production curtailments in pulp and certain paper grades already in the current fourth quarter.” He added that these plans are based on present conditions, before the implementation of announced 80% (EUR 50 per cubic metre) duties on Russian wood exports in 2009, noting that if this issue cannot be resolved soon, further steps will need to be taken.

In response to these announcements, Agence France Press reported that thousands of Stora Enso workers staged a 24 hour strike last week. Union spokesman Kari Miettinen told AFP said that six to seven thousand employees took part in the action.

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