Stora Enso sells German newsprint mill
Tuesday, June 1, 2021
Stora Enso is selling its Sachsen newsprint mill in Germany, with the new owners planning to convert the facility to make containerboard.
Sachsen Mill has an annual production capacity of 310,000 tonnes of newsprint made using recovered paper.
The €35m (£30.2m) deal to sell the mill to the Model Group involves an agreement whereby Stora Enso will continue to sell and distribute newsprint made at the facility for an 18-month period after the sale completes.
After that, Model Group will convert the mill to produce containerboard.
All 230 employees at the site will transfer to the new owners.
Swiss-headquartered Model Group is a fourth-generation family business employing 4,200 staff and has operations across the continent. It had sales of CHF859m (£673.6m) last year.
It makes solid and corrugated board for packaging and displays, and through an integrated business model is also a converter and printer of the end products.
Daniel Model, chairman and CEO, commented: ”Sachsen Mill is a perfect fit into our value chain within our existing network of operations, and we are looking forward to developing the site further.”
Stora Enso announced a radical mill closure plan earlier this year.
The Sachsen Mill sale will involve a €32m one-off charge, but the disposal will not be material to the group’s profitability or debt levels.
Kati ter Horst, executive vice president of Stora Enso’s Paper division, said: “We believe Model will be a good owner to ensure long-term development of the Sachsen Mill. We will continue to serve our customers with high quality paper products from Sachsen Mill at least until the end of 2022.”
The sale is expected to complete in Q3. It leaves €8.55bn turnover Stora Enso with one remaining paper mill in Germany, Maxau Mill which makes supercalendered paper and deinked pulp from recovered paper.
Separately, Stora Enso has held a virtual inauguration ceremony to celebrate the completion of its €350m conversion of its Oulu Mill in Finland to high-quality kraftliner. Oulu used to make Lumi coated woodfree papers, and the conversion resulted in Stora Enso exiting that market.
Commercial deliveries of AvantForte strong, three-layer kraftliner commenced in Q1, with the mill expected to reach its production capacity of 450,000 tpa by the end of this month.