Consumables
Stora Enso CEO Jouko Karvinen comments on fourth quarter and full year 2010 results announced today
Tuesday 08. February 2011 - "We at Stora Enso finished 2010 with a positive tone. Product pricing continued to improve and we beat the run-rate improvement target for fixed costs set in our Next Step programme announced in spring 2009. The increase in maintenance costs compared with the third quarter, especially in Consumer Board and Magazine Paper, did burden our earnings in this particular quarter, but it was well within our own plans.
“The accelerating variable cost inflation was a focus point for us and will remain so in 2011. The hard work to improve our productivity and our accomplishments in recent years have made us stronger and confident to tackle the challenges in 2011 and beyond. We also see continuing momentum to improved pricing during the first quarter of 2011, especially in newsprint and magazine paper.
“Since the planned acquisition of Inpac in the fastest-growing consumer packaging markets of China and India announced in the fourth quarter of 2010, we have announced further significant strategic investments in 2011. We will build a new containerboard machine in Poland to improve our cost position, product offering and self-sufficiency to support our business in the growth markets of Eastern Europe; and together with our partner Arauco we launched the investment in a world-class pulp mill in Uruguay. Our Wood Products Business Area has also just announced specific actions to grow in the high-value-added multi-storey wooden building business. Those are steps in creating the new future of Stora Enso as a global renewable materials company with a clear focus on growth markets and businesses with sustainable competitive returns.
“With the announced investments, I believe it is more important than ever to stay on our never-ending path of improving our existing businesses, whether it be business mix, costs, productivity or customer support improvements. Only that will give us, and our shareholders, the confidence to invest in our new future. Building the new future will take a few years, but it will also give us an opportunity to make our earnings clearly more dependent on our own actions, and less on external uncontrollable factors.
“The short-term market outlook for the first quarter of 2011 is generally positive, even though demand will remain below pre-financial-crisis levels in most paper grades and wood products. Earnings are expected to improve due to the better cost position and pricing in the first quarter of 2011 compared with the fourth quarter