HELSINKI, Finland, Sept. 7, 2010 (GLOBE NEWSWIRE) -- Stora Enso will, subject to decisions by the respective German corporate bodies, permanently shut down the 195,000 tonnes per year newsprint machine at Maxau Mill in Germany by the end of November 2010. Newsprint production at Maxau will end due to weak European market outlook and high production costs. Sales prices have fallen significantly while recovered paper and wood costs have risen strongly. As a result, there is no realistic prospect of newsprint production at Maxau Mill becoming profitable again in the foreseeable future.
"The European newsprint market is structurally heavily oversupplied and there has been no substantial recovery in demand since consumption collapsed in early 2009. The outlook for demand is negative too. In addition, the availability of wood and recycled fibre in Germany has been limited, so costs have been rising fast recently," says Juha Vanhainen, EVP, Publication Paper Business Area.
The permanent shutdown of the newsprint machine at Maxau Mill will reduce European newsprint capacity by approximately 1.5%.
The shutdown will affect about 180 of the 617 people employed at Stora Enso's Maxau Mill. Stora Enso is working on a social plan for the employees affected by the restructuring measures. The two uncoated magazine paper machines with total annual capacity of 530,000 tonnes at Maxau Mill will remain in operation.
Estimated financial impact
Stora Enso expects the permanent shutdown of the newsprint machine at Maxau to have the following financial impacts on the Newsprint segment:
--------------------------------------------------------------------- EUR million --------------------------------------------------------------------- One-time non-cash fixed asset and working capital 13 write-downs in Q3/2010 --------------------------------------------------------------------- One-time cash provisions in Q3/2010 as non-recurring 20 items --------------------------------------------------------------------- One-time working capital reduction 4 --------------------------------------------------------------------- Annual sales reduction 40 --------------------------------------------------------------------- Annual operating profit improvement 12 ---------------------------------------------------------------------
Stora Enso is a global paper, packaging and wood products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. The Group is the world leader in forest industry sustainability. We offer our customers solutions based on renewable raw materials. Our products provide a climate-friendly alternative to many non-renewable materials, and have a smaller carbon footprint. Stora Enso is listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora Enso employs some 27,000 people worldwide, and our sales in 2009 amounted to EUR 8.9billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.
STORA ENSO OYJ Jari Suvanto Ulla Paajanen-Sainio
CONTACT: Stora Enso Bernd Rettig, EVP, Country Manager, Germany +49 211?581 2310 Juha Vanhainen, EVP, Publication Paper Business Area +358 2046 21343 Lauri Peltola, Head of Communications +358 2046 21380 Ulla Paajanen-Sainio, Head of Investor Relations +358 2046 21242 www.storaenso.com www.storaenso.com/investors