Stora Enso has begun negotiations with employee representatives at the Kvarnsveden mill in Sweden and the Veitsiluoto mill in Finland. It will permanently stop pulp and paper production at these two mills in the third quarter of 2021, resulting in the layoff of 670 employees in Finland and 440 in Sweden.
"Paper demand in Europe has been declining for more than a decade, explains the group, which has 23,000 employees and sales of 8.6 billion euros. This trend has been further accelerated by the pandemic, which has led to changes in consumer behavior. As a result, there is significant overcapacity in the European paper market, leading to historically low price levels and a challenge to the cost-competitiveness of many paper mills. The Kvarnsveden and Veitsiluoto mills are loss-making and their profitability is also expected to remain unsatisfactory in the future."
The two closures will reduce Stora Enso's paper production capacity by 35% (to 2.6 million tons per year). Annual paper sales of the group specializing in renewable solutions in packaging, biomaterials, wood construction and paper will decrease by about EUR 600 million and earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to improve by about EUR 35 million per year. The Paper Division's share of group sales will fall to 10 percent from 23 percent in 2020 after these closures.
The Kvarnsveden mill produces supercalendered magazine paper (SC) and enhanced newsprint, used in magazines, newspapers, catalogs, supplements and retail advertising. And it includes a thermomechanical pulp (TMP) mill of softwood
And the Veitsiluoto mill manufactured uncoated woodfree paper (WFU) for office and coated papers, mainly for magazines, but also for packaging applications as well as integrated chemical pulp production lines, wood grinding and laminating.
