Stora Enso Paper Mill Announces Major Restructuring Plan

SEATTLE (Scrap Monster): Helsinki-headquartered Stora Enso announced that it will start negotiations with employees at one of its Swedish paper mill regarding restructuring the operations at that mill facility.

According to the reorganization plan, it plans to permanently close paper machine 3 (PM3) and the deinking plant (DP) at Hylte mill in Sweden. It plans to close PM3 by end of the current year and the DIP not later than Q2 next year. The decision is mainly attributed to the decline in global newsprint demand over the past several years. Further to restructuring, the mill will run on 100% thermomechanical pulp, the company press release said.

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The planned closure of operations and reorganization will affect nearly 140 employees. At the same time, it would deliver nearly EUR 14 million in annual cost savings. It is unlikely to have material impact on the company’s sales and operational margins. Stora Enso plans to book restructuring costs of EUR 12 million in its third quarter results, out of which about EUR 8 million will have a cash impact.

Kati ter Horst, EVP, Paper Division, Stora Enso stated that the planned shutdown would reduce the company’s annual newsprint capacity by 26% and its total paper capacity by 5%. The measures are intended to improve the competitiveness of the mill, he added.