Consumables

Stora Enso plans profitability improvement actions across all Business Areas

Tuesday 23. October 2012 - Stora Enso plans restructuring of its operations through the permanent shutdown of paper machine 1 at Hylte Mill in Sweden and the permanent closure of the corrugated packaging plant at Ruovesi in Finland.

In addition, Stora Enso plans efficiency improvements at several other mills. The profitability improvement actions are planned to reduce annual costs by EUR 36 million and reduce the number of employees by approximately 520 altogether. Stora Enso will record a restructuring provision and a fixed asset and working capital write-down as non-recurring items totalling approximately EUR 42 million related to the restructuring plans in the fourth quarter 2012 operating profit.
Printing and Reading plans to close capacity in Sweden
Stora Enso plans the permanent shutdown of paper machine (PM) 1 at Hylte Mill in Sweden with annual capacity 180 000 tonnes of newsprint by the end of the fourth quarter of 2012 due to structural weakening of newsprint demand in Europe. The planned closure and other efficiency improvements would affect approximately 140 employees at Hylte Mill.
Renewable Packaging streamlines operations in Finland, Sweden and Poland
Stora Enso plans permanent closure of the corrugated packaging plant at Ruovesi in Finland in the second quarter of 2013 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 would affect approximately 60 employees at Ruovesi.
It is also planned to streamline operations at the Heinola, Ingerois and Pori board plants in Finland and corrugated packaging operations at all 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 Ostro??ka Mill in Poland as announced earlier. BM 2 is reaching the end of its technical lifetime. The shutdown of BM 2 and related technical functions is planned by the end of 2012. 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.
Biomaterials efficiency improvement plans
Stora Enso plans to improve efficiency at Skutskär 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 Skutskär Mill by approximately 60 mostly by the end of Q3 quarter of 2013.
Building and Living plans to improve flexibility
Building and Living plans to improve flexibility and reduce costs at the Ala and Gruvön 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, Gruvön and Varkaus sawmills.
Financial impacts

Segment Annual sales reduction Annual cost savings from Q4 2013 onwards Fixed asset and working capital write-downs Provisions with cash impact Planned reduction in personnel
Printing and Reading No impact EUR 16 million EUR 10 million EUR 17 million 140
Biomaterials No impact EUR 6 million – EUR 6 million 60
Building and Living No impact EUR 1 million – – 25
Renewable Packaging No impact EUR 13 million EUR 4 million EUR 5 million 295
Total No impact EUR 36 million EUR 14 million EUR 28 million 520
No decisions regarding closures and employee reductions will be taken until the local co-determination negotiations have concluded. Stora Enso 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.