Possible Conversion of the Oulu Paper Mill
Stora Enso has started co-determination negotiations with employees at Oulu Mill in Finland regarding a plan to convert the paper mill into packaging board production and the closure of PM 6 and a sheeting plant. The decision on the potential conversion will be made by the Stora Enso Board of Directors during the first half of 2019 after the co-determination process has been completed.
Stora Enso announced back in June 2018 that it would evaluate development opportunities for the Oulu Mill, because current coated wood-free paper production is facing challenges with market demand and profitability. The feasibility study focused on converting the mill into packaging board grades. Based on the technical and financial aspects of the feasibility study results, the proposed plan is to convert PM 7 into kraftliner production and close down PM 6 and the sheeting plant by the end of 2020 at the latest. The capital expenditure for the potential investment is estimated to be approximately EUR 350 million during the years 2019-2021 instead of the €700 million estimated in the initial feasibility study scope.
The potential investment would include a new world-class kraftliner line with a capacity of 450,000 tonnes per year and the modification of the pulp mill and drying machine to produce unbleached brown pulp. Moreover, it would include investments to enhance environmental performance.
The potential conversion of Oulu Mill would enable Stora Enso to further improve its position in the growing packaging business and take a major step in its transformation. The aim of the change is to improve the competitiveness of Oulu Mill and to ensure a long-term future for the mill.
The environmental permit will be filed in March. The permit application will also include a description of a potential conversion for PM 6, in case this option is considered at a later date.
The entire personnel of Stora Enso Oulu Oy, approximately 600 people, falls within the scope of the negotiations which will start on 25 March 2019. In line with Finland’s co-determination law, the negotiations are based on the proposed conversion plan and include the reorganisation of structures, functions, resources and job roles. The negotiations are expected to take at least six weeks. The potential changes affecting personnel would take place by the end of year 2020.
No decisions regarding the planned conversion or redundancies will be taken until the co-determination negotiations have been concluded.