world news - 31.10.2008

Stora Enso Wood Products plans temporary production curtailments to improve profitability

Stora Enso is planning additional production curtailments in its Wood Products business area through temporary mill closures, shift reductions, efficiency measures and extended maintenance stoppages in Finland, Estonia and the Czech Republic. The Group has already recently agreed similar measures in Austria, Sweden and the Baltic States. In addition, Stora Enso plans to restructure its joinery component business in Estonia by permanently closing down the Viljandi component mill and transferring the business to Imavere sawmill. These planned new measures and already agreed new measures would reduce total production by about 1.2 million cubic metres per year in Finland, the Baltic States, Austria, the Czech Republic and Sweden.

Stora Enso will start co-determination negotiations concerning possible temporary lay-offs of Wood Products personnel at its Kitee, Tolkkinen and Kotka sawmills and possible temporary and permanent lay-offs at its distribution company Puumerkki Oy in Finland. The total number of employees affected by the co-determination negotiations in Finland is about 460. It is also planned to reduce the number of employees at Plana sawmill in the Czech Republic by about 30. Further about 40 jobs could be lost at Viljandi in Estonia. All these measures are subject to local consultation as required.

Earlier this month, Stora Enso concluded co-determination negotiations to curtail production at Ybbs sawmill in Austria from the fourth quarter of 2008 and Kopparfors sawmill in Sweden from the first quarter of 2009. These actions together with other efficiency measures already implemented in Poland and the Baltic States affect approximately 175 employees. Paikuse sawmill in Estonia, with an annual capacity of 170 000 cubic metres, was permanently closed down in October, instead of December as announced on 10 September 2008. In addition, most Stora Enso sawmills plan to take extended Christmas breaks to curtail production and adjust inventory levels.

Solution for weaker demand, lower prices and oversupply As explained in Stora Enso's interim review for the third quarter of 2008, the Wood Products business area faces very difficult operating conditions due to weakening demand, falling sales prices and continuing oversupply in most markets. Raw material costs have not adjusted quickly enough to this new reality. The operating conditions and profitability problems are severest in Finland.

“The planned actions will strengthen our position for the very difficult quarters to come, although we cannot be sure that they will be enough. We will limit our exposure to the least competitive raw material regions, aggressively reduce our inventory levels and reorganise our product portfolio to improve profitability. We are still determined to maintain our level of service to our customers. We also remain committed to minimising the impact of these planned actions on our personnel and their communities. In the negotiations, we shall jointly with local authorities consider all possibilities for helping the employees affected,” says Hannu Kasurinen, head of Stora Enso Wood Products.


See also:

News archive:

ukrainian news: 20032004200520062007200820092010

world news: 20032004200520062007200820092010

members news: 20032004200520062007200820092010