Stora Enso to Close Corrugated Packaging Mill in Paty, Hungary

Stora Enso's Paty mill is located in Paty (20 km from Budapest), Hungary and started production in August 2001. The facility is scheduled for closure in the third quarter of 2012.

April 5, 2012 - Stora Enso Renewable Packaging announced plans to restructure its converting operations involving the closure of its corrugated packaging mill in Paty, Hungary and initiating efficiency measures at its consumer board mill in Barcelona, Spain.

"Demand for corrugated board consumer packaging has significantly weakened in Hungary, so we plan to centralise our operations in Hungary to Komarom Mill and close down Paty Mill," said Mats Nordlander, EVP, Renewable Packaging.

"As a part of the plans, Komarom Mill would be enhanced with asset transfers and recruitment so it can better meet customer and market needs. The efficiency measures planned in Barcelona are intended to improve the millís profitability.

"The plans announced today, in combination with earlier announcements, would improve Renewable Packaging's cost competitiveness," Nordlander said.

According to the plans, converting operations at Paty Mill in Hungary would be permanently closed down by the end of the third quarter of 2012.

The planned closure would affect 79 employees at Paty.

The Paty mill manufactures multi-color, high quality offset printed corrugated board consumer packaging in flute profiles B, E, F and N.

The proposed restructuring measures would reduce the number of employees at Barcelona in Spain by 15. No decisions will be taken until after the local co-determination negotiations have concluded, Stora Enso added.

Stora Enso said 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.

These restructuring measure plans, together with ongoing efficiency plans at Skoghall and Fors mills in Sweden and at Imatra in Finland, would reduce annual costs by approximately EUR 7 million, starting gradually from the fourth quarter of 2012 onwards.

Stora Enso will record a restructuring provision and a fixed asset write-down as non-recurring items of approximately EUR 9 million related to the restructuring plans in the Renewable Packaging Business Area in the first quarter 2012 operating profit.

SOURCE: Stora Enso