Stora Enso will stop all production and sales in Russia until further notice due to the ongoing invasion in Ukraine. Stora Enso has three corrugated packaging plants and two wood products sawmills in Russia, employing around 1,100 people. The company will also stop all export and import to and from Russia. A mitigation plan has been activated to secure availability of input materials from other sources. |
Stora Enso’s shareholders’ nomination board will propose nine board members at the company’s annual general meeting (AGM) on March 15, according to a company press release.
The shareholders’ nomination board proposes that Hakan Buskhe, Elisabeth Fleuriot, Hock Goh, Helena Hedblom, Christiane Kuehne, Antti Makinen, Richard Nilsson and Hans Sohlstrom be reelected members of the board of directors until the end of the following AGM and that Kari Jordan be elected new member of the board of directors for the same term of office.
The shareholders’ nomination board proposes that Antti Makinen be elected chair and Hakan Buskhe be elected vice chair of the board of directors.
Mikko Helander announced that he is not available for reelection to the board of directors.
Stora Enso will start negotiations with employees at its Kvarnsveden Mill in Sweden and Veitsiluoto Mill in Finland regarding a plan to permanently close pulp and paper production at both mills. The planned closures would take place during the third quarter of 2021 and directly affect 670 people in Finland and 440 people in Sweden.
Paper demand in Europe has declined for more than a decade. This trend has further accelerated due to the pandemic, which has led to changes in consumer behavior. As a consequence, there is a significant overcapacity in the European paper market, which has resulted in historically low price levels and challenged the cost competitiveness of many paper mills. Both Kvarnsveden and Veitsiluoto mills are loss-making, and Stora Enso expects their profitability to remain unsatisfactory.
This is heavy news for our company and our colleagues at Veitsiluoto and Kvarnsveden mills.
“This is heavy news for our company and our colleagues at Veitsiluoto and Kvarnsveden mills,” said Annica Bresky, Stora Enso’s president and CEO, in a statement.
“Our people at the sites are very competent and have done their utmost during very difficult circumstances. Unfortunately, in the rapidly declining paper market, we need to adjust our production capacity to improve the competitiveness of our total paper business. This sadly means the closure of unprofitable assets.”
“We have examined several options to improve the financial situation for Veitsiluoto and Kvarnsveden mills,” said Kati ter Horst, executive vice president of Stora Enso’s paper division. “However, none of these options have proved feasible in ensuring a cost competitive future for the mills. If there was a decision to close down the mills, we would work closely together with other Stora Enso locations, the cities of Kemi and Borlange, and other stakeholders to support in re-employment and training of the affected employees. We would also actively engage in discussions to find alternative future uses for the mill sites. Throughout this process, we will serve our customers in the best possible way.”
The planned mill closures would reduce Stora Enso’s paper production capacity by 35 percent to 2.6 million tons per year.
Sales of Stora Enso decreased by 13.5 percent to €2.08 billion ($2.46 billion) in the third quarter of 2020 over the comparable 2019 quarter, due to lower deliveries and prices. The company reported an operating profit of €145 million, down from €170 million in the previous quarter.
“We have delivered a solid result for the quarter and I am satisfied with our performance, considering the unprecedented uncertainty and volatility on markets around the world,” said Stora Enso President and CEO Annica Bresky in the company’s interim report.
“Although we report a decreased operational EBIT of €175 million compared to last year, excluding paper, operational EBIT remained at the same level due to strong results in the packaging materials, wood products and forest divisions.
“The pandemic’s biggest effect continues to be on our paper business. I was very glad to see a return to positive cash flow for the quarter. The market also remains challenging for biomaterials, with low pricing. On a positive note, excluding paper, our operational EBIT margin increased to 11.8 percent, a sign of the resilience of our growth businesses and good cost management.”
Stora Enso has discontinued its quarterly guidance and annual outlook until further notice, due to the uncertainty in the global economy.