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Stora Enso Eyes Joint Ownership With Arauco of Stora Enso Arapoti in Brazil
Helsinki, Finland, 26 October 2006 -- Stora Enso is initiating exclusive discussions with the aim of joint ownership regarding certain assets of Stora Enso Arapoti in Brazil with Arauco, a Chilean forest products company.

Stora Enso acquired Stora Enso Arapoti from International Paper in September 2006 for an enterprise value of approximately USD 420 million (EUR 333 million). The Arapoti assets were formerly owned by Inpacel - Indústria de Papel Arapoti Ltda. and Inpacel Agroflorestal Ltda., subsidiaries of International Paper.

Stora Enso Arapoti comprises a paper mill producing coated mechanical paper (205,000 metric tons annual capacity), a sawmill (150,000 m3 sawn timber annual capacity), and approximately 50,000 hectares of land, including approximately 30,000 hectares of productive plantations. The potential joint ownership with Arauco is focused primarily on the sawmill and forestland operations. The non-binding joint ownership discussions are expected to be finalised before the end of January 2007.

"One of the core businesses of Stora Enso is to produce high quality publication paper, which was the main reason for acquiring Arapoti," said says Nils Grafström, president of Stora Enso Latin America Division. "Stora Enso does not see itself as a sawmill operator in Latin America. Stora Enso will also explore with Arauco the most efficient use of the forest resources," he said.

Arauco is one of the largest forestry enterprises in Latin America in terms of surface area and yield of its plantations, production of market kraft wood pulp, and production of sawn timber and panels. It is organized into four strategic business areas: Forestry, Wood Pulp, Sawn Timber, and Panels. Arauco has operations in Chile, Argentina, Brazil, and Uruguay.

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