Stora Enso to shut down SC paper machine in Sweden

Photo by courtesy of Stora Enso
16 Feb 2017 − 

More SC paper capacities are to be taken from the European market. After UPM and Heinzel, Stora Enso has now also announced plans to cut capacities by closing a PM at Kvarnsveden with a capacity of 100,000 tpy. This corresponds to about 9% of the company's SC paper capacities.

Stora Enso has announced plans to permanently close its SC paper machine PM 8 at the Kvarnsveden mill in Sweden. The machine has an annual capacity of 100,000 t and is expected to be shut down by the end of June this year.

The company said it had begun co-determination negotiations with employees at the site regarding a plan to reorganise the mill which includes the PM closure. A maximum of 140 employees would be affected by the shutdown. Stora Enso emphasised that no final decisions would be taken until the negotiations had been concluded.

"We plan to reorganise Kvarnsveden mill to ensure its competitiveness in the structurally declining paper market. This plan includes the permanent shutdown of PM 8, which, due to its small size and technical age, is unfortunately no longer competitive in the current market conditions," explained Kati ter Horst, Executive Vice President of Stora Enso's Paper division.

Stora Enso said that the closure of PM 8 in Kvarnsveden would reduce the company's overall European SC paper capacities by 9%. However, the group pointed out that this would not impact its SC paper offering as it continued to produce SC paper at the site's PM 12 (capacity of 400,000 tpy) as well as at PM 6 and PM 8 at the Maxau mill in Germany (260,000 tpy and 270,000 tpy) and at PM 3 in the Langerbrugge mill in Belgium (155,000 tpy). The group also serves its SC paper customers from the Dawang mill in China (140,000 tpy).

In addition to PM 8 and PM 12, the Kvarnsveden mill operates PM 10, which produces improved newsprint. The site has an overall capacity of 665,000 tpy.

The measure would result in annual cost savings of €12m, according to Stora Enso. The company says it will book restructuring charges of approximately €17m as an item affecting comparability in its first quarter results.

SC paper market will see a capacity reduction of 600,000 tpy in 2017

According to different plans known to date, around 600,000 tpy of SC paper capacities will be taken from the European market this year. Only recently, UPM announced it would reduce SC paper capacities by 305,000 tpy. The company has already shut down PM 2 in Augsburg, Germany (113,000 tpy of SC-A paper) at the end of 2016 and will close down its PM 3 (192,000 tpy of SC-B paper) at the Steyrermühl site in Austria at the end of March this year.

In addition, Heinzel plans to convert its SC paper machine PM 10 at the Austrian Laakirchen mill to the production of corrugated case material. This will reduce SC paper capacities by another 200,000 tpy. PM 10 can produce up to 250,000 tpy, but Heinzel will simultaneously increase SC paper capacity at the site's PM 11 by 50,000 tpy. The machine is planned to be halted in August this year to start conversion work.

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