Stora Enso to Idle Newsprint Machine at Varkaus

Closure of recycling plant at Varkaus and core plant at Pori planned — temporary newsprint layoff plan at Varkaus

Feb. 19, 2010 (Press Release) - Stora Enso is planning to centralise the use of recovered fibre-based packaging in Finland at the Corenso Pori coreboard mill. A recycling plant investment at the Pori coreboard mill will enable all the used packaging collected from households in Finland to be utilised at Pori. This includes used beverage cartons collected in Finland. Permanent closure of the recycling plant at Varkaus at the end of the third quarter of 2010 is planned. The Ecogas gasification plant associated with the Varkaus recycling plant will continue to operate. The Varkaus recycling plant employs 15 people.

As a part of the restructuring, Stora Enso's wholly-owned subsidiary Corenso also plans to centralise core production in Finland at Loviisa and Imatra, and permanently close down the core plant at Pori in the third quarter of 2010. Demand for cores has drastically decreased in Finland in recent years due to paper machine shutdowns and production curtailments. The Pori core plant employs 15 people.

“Recycling recovered fibre-based packaging at the same site as a board machine using the material is logistically efficient and reduces costs significantly. The plan to centralise core production at Loviisa and Imatra would also yield significant cost savings and improve Corenso's operating conditions in difficult and uncertain markets,” says Sampo Antti, head of the Corenso business unit, explaining the plans.

There are no major financial provisions related to these measures.

Stora Enso plans to curtail newsprint production on Varkaus paper machine 2 (PM 2) with temporary lay-offs until further notice due to weak market conditions. As a part of the plan, newsprint production at Varkaus would be concentrated on PM 4, improving its operating rates. The total number of employees affected by the co-determination negotiations concerning temporary lay-offs is around 90.

The plans are subject to co-determination negotiations with the employee representatives. Any decision on closures and other measures will be taken later when the co-determination negotiations concerning the units have been undertaken and concluded as required.

SOURCE: Stora Enso

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