Stora Enso Oyj - Company Announcement

Stora Enso makes EUR 110 million transformation investment in conversion of Varkaus Mill fine paper machine to light-weight containerboard

Helsinki, Finland, 2014-04-25 08:00 CEST (GLOBE NEWSWIRE) -- STORA ENSO OYJ
STOCK EXCHANGE RELEASE 25 April 2014 at 9.00 EET 

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. 

STORA ENSO OYJ