Stora Enso Approves Cuts and Production Changes to Improve Efficiencies
Helsinki, Finland, 26 November 2008 -- Stora Enso's co-determination negotiations at its Imatra, Varkaus, and Veitsiluoto mills in Finland have been concluded. As a result, Stora Enso will permanently shut down board machine (BM) 1 at Imatra, with an annual capacity 170,000 metric tons, by the end of 2009, and Corenso's coreboard machine at Varkaus, with an annual capacity 100,000 metric tons, by the end of 2008, due to persistent profitability problems.
Polymer (PE) coating machine 2 at Imatra will be shut down in May 2009. The PE coating machine at Karhula will be shut down by the end of 2010. As a result of the co-determination negotiations at Imatra and Karhula, the PE coating machine at Karhula will be shut down on a longer schedule than initially planned, and profitability will be improved by efficiency measures agreed in the co-determination negotiations. The sheeting lines at Imatra will cease operations, the smaller one at the beginning of July 2009 and the other one in autumn 2010. Planned related investments in sheeting and PE coating operations will be considered when the investment plans are ready.
Operations at Imatra will be streamlined and measures taken at Varkaus to improve profitability by increasing efficiency in fine paper and newsprint. Further measures to improve productivity in operations, maintenance, and administration will be implemented at Veitsiluoto.
The total number of personnel will be reduced by 329 at Imatra and Karhula, by 136 at Varkaus, and by 96 at Veitsiluoto. About 330 of these employees are currently estimated to have an offer of employment within Stora Enso or other arrangement for their future. The Group will support the rest of the affected employees with financial and other resources for redeployment, retraining, and relocation, as in the previous restructuring program.
Stora Enso will continue to operate the recycling and Ecogas gasification plants at Varkaus to use packaging materials collected from households and industry. The collected material consist mainly of corrugated and liquid packaging and wrapping materials. The recycled fiber will be used in other Stora Enso mills in Finland, confirming the sustainability of fiber-based packaging.
“We have actively planned and developed ways of helping the employees affected to find new employment inside or outside Stora Enso. We hope that through these actions we can minimize the negative consequences for our employees,” said Juha Vanhainen, country manager Finland.
Investments are being made at the Imatra and Ingerois mills At Imatra, investment in the pulp mill will reduce costs and the dependence on Russian roundwood, and the annual capacity of BM 4 will be increased to improve production efficiency and product quality to serve current customers of BM 1 in addition to its current customer base. At Ingerois, the quality, capacity, and productivity of the board machine will be improved and the sheeting capacity increased. The board machine projects are scheduled to start immediately and to be completed by the end of 2009. The ongoing pulp mill investment is proceeding according to plan and will be completed in early 2009.
“I'm happy that we have been able to conclude the co-determination negotiations in a constructive manner and consequently decided to invest in our assets to make us more competitive in the future. We have also been able to find a way to continue our recycling beverage cartons concept, which supports our sustainability goals,” said Mats Nordlander, executive vice president, Consumer Board.