Countering challenges in 2007 

Stora Enso described the year 2007 and the fourth quarter as “very challenging” as its results were impacted by high fibre costs and the weak US dollar. The company faced these challenges head on and placed much effort on the factors that are under its control – costs and productivity.

The robust actions to counter the challenges in the business environment included divesting the North American operations at fair market value, which strengthened Stora Enso’s financial position. “We have one of the strongest balance sheets in the industry right now”, said DCEO Hannu Ryöppönen at the press conference. “A healthy balance sheet will help us to tackle the challenges lying ahead of us and to participate in industry restructuring independently and in a controlled way.”

Another significant decision in 2007 was major restructuring measures in Finland and Sweden which have gained much attention. CEO Jouko Karvinen said that he was sorry for the hurt these measures have caused employees, but he still stands behind the decisions. His primary responsibility lies in safeguarding and securing the future of the company and some 39 000 employees. Every effort will be made to find sustainable long-term jobs for affected employees.

These major efforts have put the company in a better position to face the coming year. “We were at the peak of an economic cycle in 2007, so the year ahead will be challenging”, estimated DCEO Hannu Ryöppönen.

The increase in export duties on Russian wood is a serious threat that is less than one year away. Stora Enso has already significantly reduced the amount of Russian wood imports in 2007. Although costs are expected to rise by 2.5-3%, each Business Area has concrete plans to compensate for this increase. “We are well on the path to prepare for any reality we have to deal with”, commented CEO Jouko Karvinen. “We are determined to improve our earnings and cost base.”

Listen to the webcast (links to press conference webcast replay)

Photo: Lehtikuva/Hannu Vierula