Sauga sawmill will shut in June and its machinery relocated to other Stora Enso sawmills, the company said. About 107 employees are affected.
Executive vice-president Peter Kickinger said: “Production and sales of sawn goods in the Baltic states are expected to remain essentially unchanged as customers will be supplied from other sawmills.”
Estonia has cut domestic harvest levels by 50%, Mr Kickinger said, and although some raw materials had been imported from Russia to balance immediate demand, transport costs made it unsustainable.
He said: “The mill was running very well, it was efficient and profitable. The lack of raw material made it unsustainable. It was certainly not sustainable on imports. We hope the levels will go up again to where they were. Forest growth is improving and we are hoping to work with the Estonian authorities.”
He said other sites in the region could handle current production needs and increase capacity when supply levels went up again.
Sauga has a capacity of 130,000m3 of sawn wood of which 90,000m3 could be further processed. Paikuse can handle 220,000m3, Näpi had received substantial investment and Imavere employs 320 people. There is also a processing mill at Viljandi.
Stora Enso said 30 jobs would be available at the four remaining sites and it would offer outplacement services for redeployment to other forest products companies and retraining outside the industry.
The closure would not affect overall sales and the company would writedown €12m in the first quarter resulting in a slight increase in profit for 2007.
