Stora Enso has started negotiations with employees at Veitsiluoto Mill in Finland to shut down its paper machine (PM) 1.
The machine, which has an annual capacity of 190,000 tonnes of coated magazine paper will close by the end of the first quarter of 2014 due to structural weakening of magazine paper demand in Europe.
The planned closure would affect up to 90 employees.
Stora Enso will record a restructuring provision and a working capital write-down as a non-recurring item related to the planned closure with a negative impact of approximately €8m on operating profit in its first quarter 2014 results.
The planned shutdown would decrease Stora Enso’s coated mechanical paper capacity by about 15%, which represents about 2% of total European coated mechanical paper capacity.
If PM1 was permanently shut down, Stora Enso would be able to serve its NovaPress customers from Veitsiluoto Mill PM5 and from Kabel Mill in Germany.
No decisions regarding the planned closure and employee reduction will be taken until negotiations have finished.