Helsinki, Finland, 23 April 2009 -- Stora Enso Wood Products Business Area today will start co-determination negotiations in Finland with the aim of reducing capacity at Kitee and Varkaus sawmills and restructuring Puumerkki operations in Finland and Latvia. These actions would reduce the annual capacity by a total of 120,000 cubic meters and affect about 50 persons.
“Wood products business is facing an extended demand downturn, continuing heavy overcapacity in Europe as well as challenging raw material supply balances both in Baltic Sea area and in Central Europe. The operating conditions and
profitability challenges have remained the severest in Finland,” said Hannu Kasurinen, executive vice president, Stora Enso Wood Products.
Wood Products also is planning to take a long-term production curtailment at the Świętajno sawmill in Poland and at one sawing line in the Ybbs sawmill in Austria during the second quarter of 2009. These actions would reduce the annual capacity by 220,000 cubic meters and affect about 120 persons. The measures are subject to local co-determination consultation, as required.
These and previous actions amount to long-term reductions in annual capacity of 0.8 million cubic meters, which is 11% of the capacity a year earlier. There will be write downs of EUR 2 million, which do not have cash impact, and provision of EUR 1.1 million related to the planned redundancies.
Remaining 49% of Sunila Pulp Mill to Stora Enso Stora Enso will acquire Myllykoski Paper's remaining 49% minority are holding in Sunila Oy in Finland for EUR 6 million. The transaction is subject to approval by competition authorities and is expected to close by the end of the second quarter of 2009.
Stora Enso is striving proactively to improve its profitability and secure a better future for the Group. In the current challenging operating environment it will be easier for Stora Enso to optimise its own pulp production as the sole owner of Sunila Pulp Mill. Stora Enso has also agreed to supply Myllykoski Paper with pulp for the next three years and Harvestia Oy, which is partly owned by Myllykoski Corporation, will continue its wood deliveries to Stora Enso.
Sunila Oy has about 260 employees. Its annual production capacity is 375 000 tonnes of long-fibre pulp, but production has been halted in 2009 for a lengthy curtailment owing to weak demand and high operating costs.
Stora Enso is a global paper, packaging and forest products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. The Group has 32,000 employees and 85 production facilities in more than 35 countries worldwide, and is a publicly traded company listed in Helsinki and Stockholm. Our annual production capacity is 12.7 million tonnes of paper and board, 1.5 billion square metres of corrugated packaging and 6.9 million cubic metres of sawn wood products, including 3.2 million cubic metres of value-added products. Our sales in 2008 were EUR 11.0 billion.