Finland's Stora Enso to close two paper mills as demand drops

"There is significant over-capacity in the European paper market and both mills are loss-making," the company said in a statement. Stora Enso said it will now start negotiations with 440 employees at the Veitsiluoto mill in northern Finland and 670 employees at the Kvarnsveden mill in central Sweden.

Finnish forestry company Stora Enso said on Tuesday it will permanently close two paper mills, citing decreasing demand for paper in Europe.

The firm said the closures would cut its annual paper sales by around 600 million euros ($723.8 million), while operating profit (EBITDA) would improve by approximately 35 million euros annually. It added that it would take one-off costs of 127 million euros in the first quarter and 104 million euros in the second quarter of 2021.

Stora Enso said that the trend of falling demand had accelerated due to the pandemic, leading to over-capacity in the European paper market and historically low price levels. "There is significant over-capacity in the European paper market and both mills are loss-making," the company said in a statement.

Stora Enso said it will now start negotiations with 440 employees at the Veitsiluoto mill in northern Finland and 670 employees at the Kvarnsveden mill in central Sweden. The planned mill closures, expected to take place during the third quarter, would reduce the company's paper production capacity by 35% to 2.6 million tonnes per year. ($1 = 0.8289 euros)