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.