Nordic firms announce structure changes

Stora Enso and UPM-Kymmene have announced sweeping changes to their business structures as they look to remain competitive in the current market.

Stora Enso plans to close operations with poor profitability, including the 170,000m³ per year Paikuse sawmill in Estonia, while simultaneously investing €135m in areas of continued strength to “safeguard profitable customer accounts”.

UPM is to trim its five main business areas into three business groups as part of its streamlining process.

This will see its wood products, magazine paper, newsprint, fine and speciality paper and label divisions condensed into energy and pulp, paper, and engineered materials.

UPM’s timber business will now come under the energy and pulp business group, along with forests and wood sourcing. The engineered materials group will consist of the company’s plywood, wood plastic composite and RFID business areas.

Growth and development prospects continue to be interesting,” said Tapio Korpeinen, the new president of the energy and pulp business group.

“We want to take a more market driven approach to these business areas and also increase their transparency towards the investors.”

Stora Enso added that it is “prepared for full Russian roundwood duty increases”, which are scheduled to rise to €50/m³ at the start of 2009.

Through closures, curtailments and production efficiencies, Stora Enso said it will be able to operate without Russian roundwood logs in 2009, with domestic wood sourcing picking up the slack.

“[We] have transformed Stora Enso from the largest importer of Russian wood into Finland to being ready to operate without Russian roundwood,” said chief executive officer Jouko Karvinen.