Stora Enso sacks staff to keep its head above water

Desperate times calls for desperate measures as more than 1400 staff get the boot after Stora Enso closes pulp and paper mills in response to cost increases.

The company will permanently close down its Summa Paper Mill along with a magazine paper machine at Anjala Mill, and pulp mills at Kemijarvi and Norrsundet. These closures will reduce annual capacity by 505 000 tonnes of newsprint and magazine paper, and 550 000 tonnes of pulp.

Further to these plans, the laminating paper business and magazine paper operations at the Kotka mills in Finland, which employs 650 people, will be divested. 300 of the 850 administrative staff in the UK, Finland, Sweden and Germany will also be terminated.

CEO Jouko Karvinen stood behind the move, stating it was vital to the longevity of Stora Enso. "These closures, production rationalisations and staff reductions, however painful, are crucial for Stora Enso to be competitive long-term," he said.

"To wait in hope of better times would lead to more severe actions in the future. To reduce our wood costs as rapidly as possible, in parallel with the permanent closure plans we will start production curtailments in pulp and certain paper grades already in the current fourth quarter."

Karvinen also warned that this might not be the last of the reductions if times get tough again. "If the issue of the impending higher duties cannot be resolved soon and the dramatically increasing wood cost trends reversed, we will have to take further steps to rationalise pulp, paper, board and sawnwood production in Finland."