Stora Enso Announces Profit Protection Program, Plans Permanent Shutdown of PM6 at Imatra Mills in Finland
As part of a profit protection program, Stora Enso is planning to close paper machine 6 at Imatra Mills in Finland. PM6, which has the capacity to produce 90,000 tonnes per year of consumer board, is a small machine that has reached its end-of-life, Stora Enso said.
Feb. 1, 2019 - Stora Enso announced that it is implementing a profit protection program intended to achieve an annual cost reduction of EUR 120 million as well as reduction of capital expenditure by about EUR 50 million compared to the earlier announced forecast. The program includes plans to reduce costs at the Ala and Imavere sawmills and a plan to close paper machine 6 at Imatra Mills.
Stora Enso said its profit protection program is targeting reductions in variable and fixed costs, as market uncertainty increases. The program will include all divisions and corporate functions. The Group estimates that some effects will be visible already during 2019 with full impact by the end of 2020.
“We have prepared already for a year for the possibility that the markets would become weaker,” said Stora Enso's CEO Karl-Henrik Sundström. “Under the current geopolitical circumstances, there is a notable risk that global trade could shrink materially. Due to market risk and increasing costs, we are now taking proactive action and are implementing our profit protection program. We do this to further strengthen our competitiveness.”
Planned Actions at Imatra Pulp and Paper Mills
As part of the program, Stora Enso is planning to close paper machine 6 at Imatra Mills in Finland and to start co-determination negotiations at the mill related to this plan. With production capacity of 90,000 tonnes per year, PM6 is a small machine that has reached its end-of-life, Stora Enso explained.
Imatra Mills, part of Stora Enso's Consumer Board division, is located in southern Finland and consists of two production units — Kaukopää and Tainionkoski — that produce chemical pulp and consumer board. Imatra Mills' production capacity of consumer board is 1.155 million tonnes per year.
The planned closure of PM6 would result in “a reduction of maximum 80 FTEs (full-time equivalents) and reorganization of some tasks.”
Going forward, Stora Enso said it intends to continue production on PM6 until the maintenance break during the third quarter or until the end of 2019, with an ability to deliver the committed volumes.
The machine closure would cost approximately EUR 4 million related to asset write-off and costs of the co-determination process, Stora Enso added.
Planned Actions at Ala and Imavere Sawmills
Stora Enso is also planning to take performance improvement measures at the Ala sawmill in Sweden and the Imavere sawmill in Estonia. The plan includes actions to increase productivity and reduce costs. The planned actions would result in a reduction of maximum 35 FTEs and required co-determination negotiations related to this plan have been initiated.
Stora Enso noted that the detailed plans of the profit protection program are subject to appropriate information and/or consultation of the relevant employee representative bodies where applicable, and is also subject to the relevant legal procedures and approvals.
Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. To learn more, please visit: www.storaenso.com.
SOURCE: Stora Enso