According to Stora Enso’s estimate, the closing of Sunila would affect 250 employees. The arrangement is part of the company’s extensive restructuring measures, as a result of which, among other things, 300 jobs would be reduced from the head office functions.
Forestry company Stora Enso says it plans to close the Sunila pulp mill in Kotka in the second half of this year.
The arrangement is part of the company’s extensive restructuring efforts. The planned structural reforms may result in a total reduction of approximately 1,150 employees.
The company says it will start change negotiations with the employees of Sunila’s pulp production unit to stop production permanently.
The Sunila factory employs approximately 270 people, and according to Stora Enso’s estimate, the closure would affect 250 employees.
“The Finnish wood market has been structurally affected by the tightening of competition for softwood and the end of wood imports from Russia. In these new conditions, where wood costs have significantly increased, Sunila’s unit is no longer cost competitive,” the company says in its press release.
The annual capacity of the Sunila mill is 375,000 tons of softwood pulp. The closure would reduce Stora Enso’s annual market pulp capacity by 13 percent.
According to Stora Enso, its strategy for developing biomaterial innovations will remain unchanged. The pilot plant for hard carbon-based battery material will therefore continue in Sunila.
Sunila in addition to the factory, Stora Enso plans to close the De Hoop recycled cardboard factory in the Netherlands, one recycled cardboard line at the Ostrołęka factory in Poland, and the Näpi sawmill in Estonia.
Stora Enso is also starting change negotiations on reducing office work in group administration.
The group administration’s change negotiations concern approximately 1,300 people. The company’s plan is to reduce approximately 300 jobs in the group’s European offices.
The annual capacity of the Sunila mill is 375,000 tons of softwood pulp. The closure would reduce Stora Enso’s annual market pulp capacity by 13 percent.
Stora Enso has group operations in Helsinki, Stockholm and in the operating countries where it has factories. There is no information yet on the geographical distribution of the deductions.
The purpose of the measures is to strengthen Stora Enso’s competitiveness, improve profitability and allocate investments to growth markets, the company says.
CEO of Stora Enso Annica Bresky describes the measures as “very difficult” but “absolutely necessary”.
“We are at a critical stage in the advancement of our strategy, and in order to strengthen our market position, we must focus even more on capital allocation and a decentralized operating model. Unfortunately, this means that assets suffering from profitability problems would have to be closed and at the same time the organization of group operations would have to be streamlined,” says Bresky in the press release.
Great Enso estimates that the planned actions would improve its operating profit by approximately EUR 110 million per year. The company expects its annual turnover to decrease by around 380 million euros based on last year’s figures.
In connection with the planned closures, Stora Enso will record approximately EUR 130 million in asset impairments and approximately EUR 60 million in costs related to possible layoffs and restructuring costs in its second quarter result.
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