Finnish pulp and paper manufacturer Stora Enso on Friday announced it has launched a “profit protection programme” to create annual cost savings of 120 million euros. (Credit: Emmi Korhonen – Lehtikuva)

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STORA ENSO says it will launch a belt-tightening programme in a bid to create annual cost savings of 120 million euros.

The Finnish pulp and paper manufacturer revealed last week that one of the measures under consideration is shutting down its ageing paper machine in Imatra, Eastern Finland – a move that would result in the termination of up to 80 jobs.

The small paper machine, which has an annual production capacity of 90,000 tonnes, has reached the end of its life cycle, according to Stora Enso.

Karl-Henrik Sundström, the chief executive of Stora Enso, said the forest industry giant has prepared for the possibility of the markets becoming weaker for already a year, given the geopolitical uncertainty and its possible impact on global trade.

“Under the current geopolitical circumstances, there is a notable risk that global trade could shrink materially. Due to market risk and increasing costs, we are now taking proactive action and are implementing our profit protection programme. We do this to further strengthen our competitiveness,” he said in a press release on Friday.

Stora Enso said the paper machine will remain in operation until the maintenance break scheduled for the third quarter of this year and assured the planned shut-down will have no impact on its ability to make deliveries.

The company will also reduce operating costs at its sawmills in Ala, Sweden, and Imavere, Estonia. The belt-tightening measures are expected to result in the reduction of no more than 35 jobs.

Stora Enso on Friday also revealed that its net sales grew by 5.8 per cent year-on-year to 2,657 million euros between October and December 2018, signalling already the eighth consecutive quarter of growth. Its fourth-quarter operating profit, however, fell slightly from 280 to 271 million euros.

Aleksi Teivainen – HT

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