Forest industry HS data: Stora Enso closes entire Veitsiluoto plant in Kemi – more than 600 people leave

Veitsiluoto produces sawn timber, pulp and paper. This is known to be the largest closure of the forest industry in Finland.

Stora Enso is closing the Veitsiluoto plant in Kemi, according to HS. The job is leaving more than 600 people. The mill employs about 600-700 people at Stora Enso. In addition, subcontractors work in the area.

This is known to be the largest closure of the forest industry in Finland.

The Veitsiluoto mill, founded in 1922, is a so-called integrate that produces pulp, sawn timber and paper. It is one of the largest paper and board mills in Finland.

The paper mill produces light and heavier coated paper, wrapping paper and uncoated paper. According to Stora Enso’s website, Veitsiluoto can produce 850,000 tonnes of paper, 380,000 tonnes of pulp and 200,000 cubic meters of sawn timber.

The state-owned Solidium owns 10.7 percent of Stora Enso. Solidium has 27.3 percent of the voting rights. CEO of Solidium Antti Mäkinen is the Chairman of the Board of Stora Enso.

Paper mills has been closed at a rapid pace in recent years, both in Finland and around the world.

The printing paper market has been shrinking for the past 15 years as more and more magazines are read digitally. The decline in demand clearly accelerated with the interest rate pandemic. A year ago, in the spring, sales of graphic papers were more than 30 percent lower than a year earlier.

Consumption of office paper also declined sharply as the population stayed telecommuting.

Last autumn, UPM closed the Kaipola plant in Jämsä. The mill had three paper machines. Four hundred people lost their jobs.

When CEO of Stora Enso Annica Bresky presented at the end of January the company’s last year’s results, he said, there is no prospect of demand for papers to recover this year.

He speculated that the decline in demand for paper would continue at the same pace as before the interest rate crisis. Thus, after a one-off chase of the crisis, only from a much smaller level.

“There is still overcapacity in all grades of paper. Price pressures are tough, ”Bresky said.

Stora Enso has stated that it monitors the cash flow of its mills above all. Still towards the end of the year, the company’s paper mills brought cash to the cash register, although the official income statement did not show a profit.

Paper The share of Stora Enso’s net sales has fallen sharply in the past. The share is now less than 20 percent. The company invested in cardboard packaging more than ten years ago and that side is being grown all the time.

The company also believes in wood construction and develops new products such as replacing plastics.

The fact that Metsä Group announced in February that it would build a large pulp mill next to Veitsiluoto for EUR 1.6 billion may have played a part in the company’s decision.

The mill will increase Metsä Group’s annual wood consumption by 4.5 million cubic meters, part of which will be sourced from Sweden. Still, it is a big addition to Finland’s annual felling volumes. Stora Enso could estimate that the entry of a pulp mill into the same wood workshops would increase the price of wood beyond the critical limit.

As a product, the papers produced by Stora Enso are higher value-added products than the intermediate product pulp.

Already last autumn and during the winter, Stora Enso converted one paper machine at the Oulu mill into a board machine and closed the other. The new board machine is scheduled to be officially launched in early May.

At UPM, the share of printing papers in the company’s net sales has fallen from 60 per cent in 11 years to 35 per cent last year. So last year, already 65 percent of the business was something else. For a long time, UPM was known specifically as a paper company.

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