Stora Enso chief executive Jouko Karvinen has given more details on plans to cut timber, pulp and paper capacity in response to rising costs and further deterioration in demand.
The big cut in the timber business will be the closure of the 260,000m³ per year capacity Tolkkinen sawmill with the loss of 55 jobs. This will be completed by the end of this year.
Without a recovery in demand for office paper, there are also plans to close the integrated Varkaus mills by the end of 2010 as the closure of the fine paper machine would make it “impossible to make newsprint, directory paper or wood products there profitably”.
In the meantime, there will be capacity cuts at the Varkaus sawmill and there are plans to ‘curtail’ output further at other sawmills.
With other pulp and paper mill closures and capacity reductions, Mr Karvinen said between 450-1,100 jobs could be lost across the business.
“The operating environment has deteriorated faster than ever before; long term structural cost inflation in fibre and energy costs has recently been followed by dramatic weakening of demand, “ he said. “As we cannot change this operating environment, we will instead continue to change Stora Enso so we can operate in the new environment and ensure a brighter future for the Group.”
