Stora Enso has concluded co-determination negotiations at Summa, Kemijärvi and Anjala Mills and Helsinki Headquarters

Print
| Source: Stora Enso Oyj
multilang-release
Stora Enso has concluded the co-determination negotiations at Summa, Kemijärvi
and Anjala Mills, and the Helsinki Headquarters. The reasons for the capacity
and resource cuts announced on 25 October 2007 have unfortunately not changed -
excess capacity in standard and improved newsprint and uncoated magazine paper,
and dramatic cost increases, especially for imported wood. Stora Enso must
therefore take action to safeguard its cost and competitive position, and
thereby the future of the Group. 

As a result of the negotiations, the total number of personnel will be reduced
by 985, compared with the initial planned reduction of 1 100 as announced in
October. Approximately 170 of these 985 have a fixed-term contract,
approximately 255 are taking retirement, and the announced retraining and
employment support is intended to assist the remaining approximately 560 people
affected. 

Kemijärvi Pulp Mill will be permanently closed down to safeguard the supply of
domestic pulpwood to the mills at Veitsiluoto and Oulu and reduce imports of
excessively expensive wood. Closure of Kemijärvi Pulp Mill will reduce
long-fibre pulp production by 250 000 tonnes, pulpwood consumption by 1.4
million cubic metres and electricity consumption by 140 GWh per year. Kemijärvi
Mill will be permanently closed down by the end April 2008 with 214 job losses. 

Summa Mill in Kymenlaakso is being closed down because of persistent losses in
recent years and poor long-term profitability prospects. Despite tremendous
efforts by its employees, the mill cannot compete in today's and tomorrow's
markets using expensive virgin wood fibre, much of which is imported. Closure
of Summa Mill will reduce Stora Enso's annual capacity by 270 000 tonnes of
standard and improved newsprint and 80 000 tonnes of uncoated magazine paper.
Pulpwood consumption will be reduced by 1 million cubic metres, releasing the
pulpwood from domestic sources for use at other Stora Enso mills. Electricity
consumption will be reduced by 1 000 GWh per year. Summa Mill will be
permanently closed down at the end of January 2008 with 450 job losses. 

Paper machine (PM) 1 at Anjala Mill, with annual capacity 120 000 tonnes of
book paper, will be permanently shut down in November 2008, as already
announced, with 170 job losses. There will also be 122 job losses in services
for the Kymenlaakso area and 29 at the Helsinki Headquarters. 

“Our announced plans to close down the mills at Summa and Kemijärvi have
received a lot of attention. Nevertheless, following the co-determination
negotiations, we remain convinced that we must continue on essentially the
course defined in our plans announced on 25 October, as our views on the amount
of domestic wood available to Stora Enso and the markets for these papers have
not changed. We must safeguard the future of the whole Group and Stora Enso
Finland,” said Stora Enso CEO Jouko Karvinen. 

“In close co-operation with national and local organisations, we are starting
to identify economically viable solutions to minimise the impact of our
decisions. Since the measures we must take will have very serious consequences
for so many people, I now implore all stakeholders to join us in rapidly
establishing new businesses at the sites affected and motivating employees who
can move to seek alternative employment elsewhere with Company support. It is
time to find solutions that safeguard the futures of Stora Enso in Finland and
the employees at the affected sites. We have had several expressions of
interest that support our stated strategy, and I would be happy to see more. We
need to find those solutions as fast as we ever can, so we have hired Ernst &
Young to help us. 

“In early November we announced a EUR 5 million voluntary support package to
help the personnel affected to find new employment. We are today doubling that
amount. The additional EUR 5 million will be focussed entirely on offering
financial support for employees participating in retraining so they can obtain
employment in new businesses created at the affected locations. 

“We want to find uses for the properties at Summa and Kemijärvi that will
establish economically viable businesses which will create new employment
without competing with Stora Enso for critical pulpwood supplies or product
markets. Some of the initiatives under discussion are based on the use of
Eastern Lapland forest resources and support Stora Enso's pulpwood procurement
policy as well,” concluded Jouko Karvinen 

Kotka Mill is not part of Stora Enso's core strategy, so the Company is
actively negotiating to find a new owner that will continue production of
laminated paper and special coated magazine paper. 

Norrsundet Pulp Mill in Sweden is planned to be permanently closed down at the
end of 2008. The conclusions of the ongoing negotiations with the personnel and
the labour unions are expected later this coming spring. 

For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Aulis Ansaharju, EVP, Fine Paper and Country Manager, Finland, tel. +358 400
480 984 
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications, tel.
+358 40 763 8767 

www.storaenso.com
www.storaenso.com/investors 

Stora Enso Oyj


pp. 	Jussi Siitonen		Jukka Marttila