In order to improve cost competitiveness and profitability at its Varkaus Mill in Finland, Stora Enso will undertake a multifaceted modernisation project. These measures provide for more effective raw material handling and utilisation at the site and will improve product quality in line with customer demand.
Replacement of mechanical pulp line
The existing stone groundwood pulp (SGW) line at the Varkaus Newsprint Mill, which is no longer competitive, will be replaced by a new thermomechanical pulping (TMP) line. The project, which includes rebuilding chip handling for all the mechanical pulping lines, will enhance paper quality by improving the opacity and strength properties of the products. The Varkaus Newsprint Mill produces directory papers and other special newsprint papers.
The advanced TMP line will have an annual capacity of 200 000 tonnes, which will be used entirely internally in the Varkaus Mill. The project, which will cost EUR 49.4 million, is scheduled to be completed in summer 2004, after which the stone groundwood line will be shut down.
Sawmill modernisation
Stora Enso will modernise log handling, the sawing line and kiln drying at the Varkaus Sawmill. The project includes a new on-line further processing line, which will have an annual capacity of 100 000 cubic metres. The project will significantly improve raw material handling and utilisation, and secure a constant chip flow to the new TMP line. Total sawing capacity will increase moderately, from 320 000 to 345 000 cubic metres per year.
The project will be undertaken in two phases: the log handling and sawing line will be modernised by October 2003; the further processing plant will be built by March 2004. The project, which will cost EUR 19.8 million, will not change personnel levels at the sawmill. Personnel from log handling will be retrained and transferred to the further processing unit.
This modernisation project continues Stora Enso Timber’s strategy of raising the value of products by increasing further processing capacity and output of customised products. The programme also enables Stora Enso Timber’s continued vital support to the Group’s wood procurement.
The TMP line and sawmill investments are in line with Stora Enso’s policy that capital expenditure over the cycle be equal to or less than the amount of depreciation.
For further information, please contact:
Lars Bengtsson, Senior Executive Vice President, Newsprint, tel. +49 211 581 2450
Pekka Hämäläinen, Director, Stora Enso Timber, Nordic Production Group,
tel. +358 2046 48542
Kari Vainio, Executive Vice President, Corporate Communications,
tel. +44 7799 348 197
Keith Russell, Senior Vice President, Investor Relations, tel. +44 208 432 1552
www.storaenso.com
www.storaenso.com/varkaus
Stora Enso Newsprint is the largest newsprint producer in Europe and fourth-largest in the world. The main markets are in Europe and North America. The product area has an annual production capacity of 3.3 million tonnes. Newsprint is used for newspapers, newspaper supplements, advertising leaflets, telephone directories, and hardback and pocket books.
Stora Enso Timber is an international wood products company that provides customer-focused solutions to industry and trade worldwide. With annual net sales of EUR 1.2 billion, Stora Enso Timber's annual production capacity is 5.8 million m3 of sawn wood products, including 2.2 million m3 of value-added products. The company employs 3 600 people in 19 sawmills and 15 further processing plants in Northern and Central Europe.
