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Photo: Stora EnsoStora Enso to close newsprint sector at Varkaus
Published: Thu, 2010-07-08 09:45
Stora Enso will close down newsprint and directory paper production at Varkaus
Stora Enso will permanently close down newsprint and directory paper production at Varkaus in Finland by the end of the third quarter of 2010. The European newsprint and directory paper market is strongly structurally oversupplied and sales prices have fallen significantly. As a result, newsprint production at Varkaus Mill is expected to remain unprofitable in the long term.
"The overcapacity position in the European newsprint and directory paper market has persisted in 2010. Consequently, sales prices have fallen significantly. In the longer term demand in Europe is expected to decline further, as has been happening in North America. In addition, the competitiveness of Varkaus is weakened because newsprint production at Varkaus relies on less-competitive virgin fibre, the availability of wood raw material in Finland is not stable and Varkaus is far away from most of its customers and main markets," says Juha Vanhainen, EVP, Publication Paper Business Area and Country Manager Finland.
The closure of the two newsprint machines PM 2 and PM 4 at Varkaus Mill will reduce newsprint and directory paper annual production by 290 000 tonnes. The co-determination negotiations at Varkaus were concluded at the end of June. As a result of the ending of newsprint production, 175 employees will be made redundant. There are currently 506 employees at Stora Enso's Varkaus Mill.
The Varkaus mill site will continue to produce pulp and fine paper after newsprint and directory paper production ends. The operations of the sawmill and the NSE Biofuels Oy biofuel joint venture with Neste Oil and its demonstration plant will also continue. The ending of newsprint production will not substantially affect the amount of renewable energy produced at Varkaus.
Stora Enso will support redeployment of those affected by the plans through efficiently offering jobs internally and eligibility for outplacement services. The Group works closely with local employment and economic development centres to find new job opportunities for people affected. Stora Enso will also support financially those who would like to start their own business.
Comments (1)
Finnish paper industry are very abounding to the production of newsprint paper (newsprint for magazines and other form of printing paper).It is today an over capacity of 2 million ton newsprint in europe.But the over capacity will be even higher forthcoming years because the technology shift of less reading and more using of videostreaming over the net.
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