Stora Enso Agrees to Sell Celbi Pulp Mill in Portugal

Jun 8, 2006 (Press Release) Stora Enso said that it has signed an agreement to sell Celulose Beira Industrial (Celbi) SA, its main asset being Celbi Pulp Mill in Portugal, to Altri, a Portuguese company with steel, pulp and paper operations.

The sales price of Celbi's equity is EUR 428 million and the company has no debt. The Group will record a capital gain of approximately EUR 170 million on completion of the sale.

The transaction is expected to be completed in the third quarter of 2006.

"This is a strategically important divestment for us. We are refocusing our short-fibre strategy towards South America, where the first step was the start-up of the Veracel Pulp Mill in Brazil," comments Stora Enso's CEO Jukka Härmälä. Celbi Pulp Mill which has been a well performing asset is being divested as part of Stora Enso's Asset Performance Review (APR).

Celbi's sales in 2005 were EUR 137 million, of which EUR 55 million were internal Stora Enso sales. Celbi's contribution to Stora Enso Group's sales in 2005 was EUR 82 million and its contribution to the Group's operating profit was EUR 26 million. The divestment will decrease the Group's working capital by approximately EUR 30 million.

Celbi Pulp Mill has an annual production capacity of about 305, 000 tonnes of high quality short-fibre eucalyptus pulp. Celbi's pulp is suitable for the production of printing, writing and speciality papers, and tissue. The mill obtains half of its fibre raw material from its own plantations of approximately 41 000 hectares. Since the spring of 2005, the plantations have dual certification: FSC and PEFC. Both the pulp mill and the forest activities are EMAS registered. Celbi had 345 employees at the end of 2005.

Altri was created in March 2005 as a spin-off from Cofina Group. Altri has two pulp mills and one paper machine producing sack kraft paper.

SOURCE: Stora Enso

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