Stora Enso Plans Major Restructuring across all Business Areas

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Stora Enso says it will record a restructuring provision and a fixed asset and working capital write-down as non-recurring items totaling approximately EUR 42 million related to the restructuring plans in the fourth quarter operating profit.

PM 1 at the Hylte Mill has an annual capacity of 180 000 metric tons of newsprint. The shutdown is related to what the company says is structural weakening of newsprint demand in Europe. The planned closure and other efficiency improvements will affect approximately 140 employees at the Hylte Mill.

The company's closure of the corrugated packaging plant at Ruovesi in the second quarter is due to decreased demand for offset-printed corrugated packaging in Finland and poor financial performance of the plant. Stora Enso plans to serve Finnish offset customers through its other offset plants in Europe. The planned closure will affect approximately 60 employees.

Stora Enso also plans to streamline operations at the Heinola, Ingerois, and Pori board plants in Finland and corrugated packaging operations at all of the Swedish units to ensure long-term competitiveness. The plans would reduce the number of employees in Sweden and Finland by up to 100 altogether, mostly by the end of the third quarter of 2013.

In addition, Stora Enso plans the permanent shutdown of board machine (BM) 2 at the Ostroka Mill in Poland, as announced earlier. BM 2 is reaching the end of its technical lifetime, the company noted. The shutdown of BM 2 and related technical functions is planned by the end of this year. Including the effects of an overall review of Polish board and converting operations, the number of employees in Poland would decrease by up to 135 altogether.

The company also plans to improve efficiency at its Skutskar Pulp Mill in Sweden to reduce costs and improve the mill's competitiveness in response to the challenging market environment. The plans would reduce the number of employees at Skutskar Mill by approximately 60, mostly by the end of the third quarter in 2013.

The company's Building and Living group plans to improve flexibility and reduce costs at the Ala and Gruvon sawmills in Sweden and Varkaus Sawmill in Finland from the first quarter of 2013. The restructuring plans would affect approximately 25 employees at the Ala, Gruvon, and Varkaus sawmills.

No decisions regarding closures and employee reductions will be taken until the local co-determination negotiations have concluded. Stora Enso says it would make every effort in co-operation with local communities to help the affected personnel find new employment opportunities, and all job openings in other Stora Enso units would be available to those affected.