Already in 2021, Stora Enso converted one previously closed paper machine into a board machine in Oulu. The company’s result in July–September was excellent.
Stora Enso invests about one billion euros in the conversion of the decommissioned paper machine of the Oulu mill into a large-scale consumer packaging board line.
According to the company’s press release, production with the modified version will start in early 2025.
“Renewable packaging will continue to be our biggest strategic growth area. The market is now growing faster than the market for plastic-based packaging for the first time. The decision made now was a more efficient way than other alternatives to utilize existing resources to bring products to market quickly and cost-effectively. We have good conditions to increase our turnover and market share”, CEO of Stora Enso Annica Bresky says.
The investment will bring about 300 new jobs to the Oulu factory. The figure includes the factory’s support functions. In addition, the indirect employment effect is 1,500 jobs.
Oulu the mill’s other previously closed paper machine was converted into a machine for producing corrugated board as early as 2021.
So now the second decommissioned paper line will also be converted into a cardboard machine. However, the product is different from the first machine. The new machine produces folding cardboard and coated unbleached cardboard used in consumer packaging.
Stora Enso already decided 15 years ago to focus on the packaging business, and during Bresky’s term as CEO, the company has rapidly abandoned the rest of paper production.
The company closed the large factories in Veitsiluoto and Kvarnsveden a year ago. Old paper machines have also been converted, i.e. practically rebuilt into cardboard machines.
The company has put its last paper mills up for sale. Anjala paper mill is for sale in Finland. The demand for paper in Western countries has decreased at a steady pace due to the digitization of office work and information transmission.
At the same time, the growth of online shopping and the effort to reduce the use of plastic packaging has increased the demand for different types of cardboard.
Line the annual capacity will be 750,000 tons. The end uses of cardboard are food and beverage packaging, especially for frozen and cold products, as well as dry product and fast food packaging. The target markets are mainly Europe and North America.
According to the company’s estimate, the converted line will generate a turnover of around 800 million euros per year.
“The investment is a big step forward in the European market and makes our Oulu unit a large-scale factory that improves the profitability and competitiveness of both consumer packaging cartons and corrugated surface cartons, i.e. kraftliners”, director of the packaging materials business Hannu Kasurinen says in the announcement.
According to him, the converted line will be the most cost-competitive folding carton machine in Europe.
Stora Enso also announced its third quarter results on Friday. It was excellent. The company’s turnover increased by 15 percent compared to the same time last year to 2,963 million euros.
The operating profit was 527 million euros, or 29 percent higher than last year’s July–September. Operating profit was almost 18 percent in relation to turnover.
Compared to many global competitors, Stora Enso has benefited from the fact that it produces almost 70 percent of the energy it uses. According to the company, the demand outlook for packaging material is stable despite the growth of the economic environment and geopolitical risks.
According to the results release, negotiations on increases in the delivery prices of packaging materials are ongoing, so cost inflation can be transferred to sales prices.
The price of pulp has fallen from a long-continued exceptionally high level. The peak prices of sawn timber during the pandemic have also been left behind, and the company predicts that sawn timber prices will continue to fall.
“The first signs of a possible macroeconomic slowdown are visible, the effects of which may soon extend to Stora Enso’s business as well. However, I trust our ability to anticipate and adapt. Stora Enso is stronger and more sustainable than before thanks to structural reforms and strategic choices made in recent years,” says Bresky in the press release.
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