Stora scales back Oulu conversion plan
Monday, March 18, 2019
Stora Enso is consulting with employees over revised plans to convert Oulu Mill to packaging board. The latest proposal would involve shutting one of the site’s paper machines with the potential loss of 400 jobs.
Last summer the biomaterials group announced a feasibility study into converting its entire production of more than a million tonnes of Lumi coated woodfree paper into brown-based cartonboard and kraftliner on the two paper machines at the Oulu site in Finland, involving an investment of some €700m (£600m).
The revised plans involve a spend of €350m to convert PM7 to kraftliner with a capacity of 450,000 tonnes per annum, the modification of the pulp mill to produce unbleached brown pulp, and environmental improvements.
Paper machine 6 and a sheeting plant would be shut down, with the changes to take effect “by the end of 2020 at the latest”.
“The potential conversion of Oulu Mill would enable Stora Enso to further improve its position in the growing packaging business and take a major step in its transformation. The aim of the change is to improve the competitiveness of Oulu Mill and to ensure a long-term future for the mill,” the company said in a statement.
“The decision on the potential conversion will be made by the Stora Enso Board of Directors during the first half of 2019 after the co-determination process has been completed.”
The mill currently employs 600 staff and the co-determination negotiations with the entire workforce regarding the revised proposals will begin on 25 March.
LumiPaper sells direct in the UK and via merchants Premier Paper and Ovendens. Its sheeting plant at Mendlesham in Suffolk is a subsidiary of Oulu Mill.
Oulu is Stora Enso’s sole coated woodfree fine paper mill, so if the scheme goes ahead it would mean the group would exit that part of the market entirely.
A merchanting source said that the move, previously described as a “game-changer” for the coated woodfree market, was looking increasingly likely to get the go-ahead.
“Everyone has been waiting to hear what the outcome would be. I suspect the scaled back plans reflect an element of the packaging sector showing signs of slowing. And there’s been a lot of conversions already.”
Burgo’s conversion of the PM9 machine at Verzuolo from LWC to containerboard is set to go into production from Q4.
Separately, Lecta Paper has just announced that it will temporarily shut down coated paper machine 8 at its Condat mill in France from the end of April, and is looking into converting the line to produce materials for labels and flexible packaging instead.
In a statement Lecta said: “The decrease in coated paper demand over the last several years resulted in overcapacity in our industry. The worsening of this trend observed in the last months is the main reason for the temporary line 8 shutdown at the Condat mill.”