Divestment process for remaining three paper mills to continue.
Stora Enso will sell its Maxau SC paper mill in Germany to Schwarz Produktion, part of Schwarz Group, one of the largest retailers in the world, for approximately €210m, Stora Enso announces today. Closing is expected in the beginning of 2023, at the latest, subject to regulatory approvals.
Schwarz Produktion is expected to assume ownership for the Maxau site in the beginning of 2023, Stora Enso says. Schwarz’s plan is to continue paper production at the site, and the 440 employees working at Maxau will be part of the transaction. Stora Enso says it will continue to operate the Maxau site and serve its supercalendered paper (SC) customers until the closing of the transaction.
"We are very pleased with this agreement, as it fulfils our goal of providing a sustainable long-term future for the Maxau site and its employees. We will continue with the divestment process for the remaining three paper assets Nymölla, Hylte and Anjala,” says Seppo Parvi, CFO and Head of Paper division at Stora Enso. This transaction is part of the earlier announced plan to divest four of Stora Enso’s five paper production sites. The company's focus is on long-term growth potential for its renewable products in packaging, building solutions and biomaterials innovations.
The transaction will reduce Stora Enso’s annual SC paper capacity by 530,000 tonnes. Based on the 2021 figures, the divestment is expected to reduce Stora Enso’s annual sales by approximately €250m. Subject to closing date adjustments, Stora Enso will book a one-time disposal gain of approximately €50m, in its IFRS operating profit in the first quarter of 2023.
Stora Enso announces that it will continue the divestment process for the remaining paper mills in Nymölla, Hylte and Anjala with no committed timeline for conclusion. The company emphasizes that the sale process has no immediate effect on its paper operations which continue to serve their respective customers.
In addition to its sales plans, there is a feasibility study ongoing at the Langerbrugge paper mill in Belgium for the potential conversion of one of the two publication paper machines into a containerboard line. Stora Enso says it will continue to serve its Langerbrugge paper customers at least until the end of 2024.
Stora Enso currently has five printing and writing paper production sites. In total, the Paper division currently employs approximately 2,300 employees. In 2021, Paper division’s net sales amounted to €1.70bn.
Schwarz plans to continue paper production at the Maxau site
The acquisition of the Maxau paper mill would be a new step of vertical integration in the retail group, which will have its own production of paper for printed advertising. Prices for all publication paper grades have doubled within a year, putting the retail chains' advertising bugdets to the test. In the recent past, several retailers throughout Europe have announced to adapt the volume of their printed advertising, but basically continue to consider print as an important advertising medium.
Schwarz Produktion is the umbrella brand for the production companies of the German Schwarz Group. In total, more than 4,500 employees in the Schwarz Produktion companies produce high-quality food as well as sustainable packaging and materials for the retail companies Lidl and Kaufland. In addition to mineral water and soft drinks, the Schwarz Produktion companies also produce chocolate, dried fruit, baked goods, coffee and ice cream. In addition, three plastic and recycling plants are a central component of a unique PET materials cycle.
