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Stora Enso invests EUR 110 million for conversion of Varkaus Mill fine paper machine to light-weight containerboard

Stora Enso invests EUR 110 million for conversion of Varkaus Mill fine paper machine to light-weight containerboard

Stora Enso will invest approximately EUR 110 million in converting the Varkaus Mill fine paper machine in Finland to produce virgin-fibre-based containerboard. Most of the cost is due to the conversion work required on the paper machine and in the pulp mill.

“Utilising existing assets within Stora Enso and modifying them to a new product line is part of Stora Enso’s transformation to a value-creating renewable materials company focusing on growth markets,” says Stora Enso CEO Jouko Karvinen.

“Varkaus is an ideal mill for this kind of conversion. It has an integrated pulp mill, a power plant and a suitable paper machine. In addition, the mill is well located from a raw material supply point of view and it has the necessary infrastructure and competence to run the project successfully,” Jouko Karvinen notes.

Renewable-fibre-based packaging has good growth potential in Europe and globally, and Stora Enso sees an opportunity to benefit from that growth by investing in competitive kraftliner capacity at Varkaus. Through the machine conversion, Stora Enso is taking advantage of the combination of two market forces: the decreasing global market for paper but increasing global market for renewable packaging board.

The conversion will decrease Printing and Reading annual sales by EUR 140 million from 2016 onward and increase Renewable Packaging sales by EUR 280 million when the machine is running on full capacity. The targeted EBITDA margin to the machine conversion in full run is above 15% provided that the current market conditions prevail.

The conversion work is expected to be undertaken mainly during autumn 2015 and the containerboard machine is scheduled to start up during the fourth quarter of 2015. The current 280 000 tonnes per year uncoated fine paper machine is planned to cease production by the end of August 2015. Following the conversion into a linerboard machine, Varkaus Mill’s capacity will be about 390 000 tonnes per year of kraftliner and 310 000 tonnes of brown unbleached kraft pulp. Most of the board production is planned to be sold externally.

Varkaus Mill will produce office paper grades until the end of August 2015. Stora Enso will continue serving its office paper customers from the two other uncoated fine paper units, Veitsiluoto Mill in Finland and Nymölla Mill in Sweden.

For further information, please contact:


Hannu Alalauri, SVP Packaging Solutions, Stora Enso Renewable Packaging, tel. +358 2046 21228
Ulla Paajanen-Sainio, SVP Investor Relations, tel. +358 40 763 8767

Tommy Borglund, SVP Communications, Stora Enso Renewable Packaging, tel. +46 1046 71709
Ulrika Lilja, SVP Communications, Stora Enso Printing and Living, tel. +46 1046 71668

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


Stora Enso is the global rethinker of the paper, biomaterials, wood products and packaging industry. We always rethink the old and expand to the new to offer our customers innovative solutions based on renewable materials. Stora Enso employs some 29 000 people worldwide, and our sales in 2013 amounted to EUR 10.6 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.

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