Stora Enso invests 350m euros to convert paper mill in Finland

Stora Enso will invest approximately €350 million over the course of 2019-2022 to convert its paper mill in Oulu, Finland, into a packaging production site.

The converted site will produce kraftliner for use in packaging for food such as fruit and vegetables, as well as heavy-duty packaging.

The venture will involve the installation of a new virgin-fibre based kraftliner production line with an annual capacity of 450,000 tonnes; the modification of the pulp mill and drying machine for unbleached brown pulp, and will include investments to enhance the mill’s environmental performance.

However, the company’s paper and sheeting plant will be closed as a result of this conversion project, with approximately 400 employees leaving their positions at the plant by the end of 2020, at which point the Oulu Mill will cease to produce woodfree coated paper.

Approximately 180 people will be permanently employed at the site following the conversion.

In a statement, Stora Enso claimed that the conversion was necessary as part of the company’s efforts to increase profitability, as the “market dynamics of woodfree coated paper have deteriorated”, necessitating a greater focus on the company’s packaging operations.

According to Stora Enso, the Oulu Mill’s pre-tax profit margin is expected to improve by 15–20% once the kraftliner machine is running at full capacity, approximately four years after start-up.

Stora Enso’s CEO Karl-Henrik Sundström said: “The conversion of Oulu Mill will enable Stora Enso to further improve its position in the growing packaging business and take a major step forward in its transformation.

“We have proven competence in running large conversion projects successfully, as we have already converted one paper machine at Varkaus Mill to produce kraftliner.”

Gilles van Nieuwenhuyzen, EVP, Stora Enso’s Packaging Solutions division, added: “Economic growth, sustainability and food safety are key market drivers in the packaging business.

“This conversion will allow us to provide customers with an innovative kraftliner product with high-performance qualities in terms of strength, printability and food safety.”