Stora Enso to shut newsprint machine in Sweden

Plan to close PM3 and deinking plant at Hylte

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Stora Enso's Hylte paper mill in Sweden Creator Patrik Leonardson via Stora Enso internet
Stora Enso's Hylte paper mill in Sweden Creator Patrik Leonardson via Stora Enso internet

16 September 2020 – Stora Enso will start codetermination negotiations with employees at its Hylte Mill in Sweden regarding a plan to reorganize the mill, including permanent closure of paper machine PMhttps://indianprinterpublisher.com/blog/2019/10/12/wan-ifra-entering-virtual-reality/3 that produces standard newsprint and the deinking plant (DIP). After the planned restructuring, the mill would run on 100% thermomechanical pulp (TMP), improving the mill’s competitiveness. The planned closure of PM3 and the reorganization of the mill would impact a maximum of 140 persons. PM3 is intended to be closed by the end of 2020 and the DIP latest in Q2 2021.

The plan would result in annual cost savings of Euro 14 million. Stora Enso will book restructuring costs of approximately Euro 12 million as an item affecting comparability (IAC) in its Q3 2020 results, of which about Euro 8 million will have a cash impact. According to the press release, the planned closure would not have a material impact on Stora Enso’s sales or operational EBIT.

Newsprint demand not expected to recover

“The decline in global newsprint demand continues due to changes in consumer behavior, and it is not expected to recover. This has led to global overcapacity, low operating rates, and poor profitability at the Hylte Mill. The planned measures would improve the competitiveness of the mill. Also, Stora Enso has invested in the site’s future to produce formed fiber products and biocomposites,” says Kati ter Horst, EVP, Paper division.

No decisions regarding the planned reorganization or employee impact will be taken until the conclusion of the codetermination negotiations. Hylte Mill currently operates two newsprint machines with an annual capacity of 480,000 tonnes. Production at Hylte Mill would continue on one line, PM4, for standard newsprint paper. The planned shutdown would decrease Stora Enso’s annual newsprint capacity by 26% or 235,000 tonnes, representing 4% of total European newsprint paper capacity. The planned shutdown would reduce Stora Enso’s total paper capacity by 5%.

Stora Enso will continue to produce standard newsprint at Hylte, Langerbrugge, and Sachsen mills. The closure of Hylte Mill PM3 would not impact Stora Enso’s newsprint product offering, and the company says it would be able to serve its customers as well as it does currently.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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