Jan. 27, 2023 - Stora Enso has signed an agreement to divest its paper mill in Hylte, Sweden and all its related assets to Sweden Timber, a Sweden-based sawmill and planing mill company. The enterprise value is approximately EUR 18 million.
The Hylte Mill in southwest Sweden is one of the largest newsprint mills in the world, and has the capacity to produce 245,000 tonnes of high-quality newsprint per year, along with biocomposites and formed fibre products.
The completion of the transaction is expected in the first half of 2023.
Stora Enso also has made efforts to sell its Anjala paper mill in southern Finland, which produces printing paper from mechanical pulp — both coated and uncoated book paper, magazine paper and improved newsprint grades. However, the company said it has decided to discontinue the divestment process.
The Hylte site transaction, along with the discontinuation of the Anjala divestment, concludes Stora Enso's plan announced in March 2022 to divest four of its five paper production sites.
"I am pleased that Sweden Timber will continue to serve Hylte's paper customers with the intent to further develop the operations," said Seppo Parvi, CFO at Stora Enso. "For the Anjala site, we have concluded that the benefits from retaining the site within the Group exceed the value of explored divestment opportunities."
Based on the 2021 figures, the divestment is expected to reduce Stora Enso's annual sales by approximately EUR 90 million. Subject to closing date adjustments, Stora Enso will book a disposal loss of approximately EUR 35 million, in addition to the impairment loss of EUR 19 million recorded in Q4/2022, in its IFRS operating profit in Q1/2023, as an item affecting comparability. The transaction does not affect the Packaging Solutions division's formed fiber and biocomposite operations located at the Hylte site.
The Anjala mill, together with the retained Langerbrugge mill in Belgium, were integrated into Stora Enso's Packaging Materials division on 1 January 2023.
Currently, the Anjala mill leverages integrated operations with Stora Enso's neighboring Ingerois packaging materials site, utilizing synergies in raw material and energy supply.
For the Langerbrugge mill, the ongoing feasibility study for a potential conversion of one of the mill's two paper lines into a packaging materials line is expected to be finalized in the first half of 2023.
The retained Anjala and Langerbrugge sites will continue paper production. The agreement to divest the Hylte mill has no immediate impact on production nor customer deliveries, Stora Enso said.
The previously disclosed agreement to divest the Maxau mill in Germany to Schwarz Produktion is expected to conclude at the beginning of this year.
Divestment of the Nymölla mill in Sweden was concluded on January 2 with ownership transferred to Sylvamo.
In line with its strategy, Stora Enso's focus is on long-term growth for its renewable products in packaging, building solutions and biomaterials innovations.
Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper.
SOURCE: Stora Enso
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