Stora Enso Fine Paper to Restructure Operations

May 3, 2011 - Stora Enso said that it is re-evaluating its Fine Paper Business Area working methods and building a new business model to increase cost competitiveness.

According to its plans, Stora Enso would restructure operations at Nymolla Mill in Sweden. At Uetersen Mill in Germany the plan is to restructure operations more towards Speciality Papers and at Oulu Mill in Finland, together with the sheeting plants in Belgium and the United Kingdom, find the most efficient way to utilize the converting capacity and streamline operations.

"The plans announced today would make Stora Enso Fine Paper more flexible and cost efficient, and so better able to meet customer and market expectations," said Hannu Alalauri, executive vice president, Fine Paper Business Area.

"Fine paper demand is still clearly below pre-crisis levels, and there are no signs of sustained recovery. We have been successfully remodelling our operations during the past few years, and now we plan to continue on the chosen path of improving our existing businesses. We are comparing the best practices at all our mills so we can continuously adopt the most efficient ways of working. Similarly, we need to question our way of running the operations. These plans are part of rethinking in Stora Enso, but of course rethink means much more for us, such as new products and services, new solutions with our customers — better solutions for the future," Alalauri said.

Stora Enso Fine Paper plans to reduce annual costs by approximately EUR 20 million, starting during 2011 with all actions to be completed by the end of the second quarter of 2012.

The proposed restructuring measures would affect altogether up to 285 employees in Finland, Sweden, Germany, Belgium and the United Kingdom.

Stora Enso will record a cash provision of approximately EUR 16 million as a non-recurring item in its second quarter of 2011 operating profit.

The plans would not affect the Business Area's paper production capacities, Stora Enso said.

The outcome of the plans will depend on the result of the local co-determination procedures, the company 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.

SOURCE: Stora Enso