SWEDEN – Finnish pulp and paper maker Stora Enso has signed an agreement with Sweden-based sawmill and planing mill company Sweden Timber to divest its paper production site in Hylte, and all its related assets.
Expected to complete in the first half of this year, the enterprise value of this transaction is around US$19.5 million (€18m).
Hylte is located in south-west Sweden and is one of the biggest newsprint mills in the world, with a capacity of 245,000tpa.
“I am pleased that Sweden Timber will continue to serve Hylte’s paper customers with the intent to further develop the operations,” said Seppo Parvi, CFO at Stora Enso.
According to the company, the divestment will reduce its sales by around US$97.93 million (€90m) and will involve a loss on disposal of some US$38.08 million (€35m), on top of the US$20.67 million (€19m) impairment made in Q4 2022.
Hylte makes biocomposites and formed fiber products as part of Stora Enso’s Packaging Solutions division. The group said the transaction did not affect those operations.
Earlier this year the company also completed the sale of its Nymölla paper production site in Sweden and all associated assets to the US-based uncoated paper producer Sylvamo.
Announced in September, the divestment transaction was closed after receiving regulatory approvals for an enterprise value of around US$159.13 million (€150m).
Stora says that the move will allow it to narrow its focus to expanding its renewable packaging portfolios, biomaterial innovations, and building solutions.
With a capacity of 485,000 metric tonnes of woodfree uncoated office papers, the Nymölla site provides for Enso’s leading brand Multicopy.
Sale of Anjala paper mill suspended
Meanwhile, Stora Enso has decided to suspend the sale of its Anjala paper site in Finland.
The Anjala paper site, together with the retained Langerbrugge paper site in Belgium, were integrated into the Packaging Materials division on 1 January 2023.
“For the Anjala site, we have concluded that the benefits from retaining the site within the Group exceed the value of explored divestment opportunities,” added Parvi.
The Anjala site already today leverages integrated operations with Stora Enso’s neighboring Ingerois packaging materials site, utilizing synergies in raw material and energy supply.
For the Langerbrugge site, the ongoing feasibility study for the potential conversion of one of the site’s two paper lines into a packaging materials line is expected to be finalized in the first half of 2023.
The retained Anjala and Langerbrugge sites will continue paper production and serving their customers.
The agreement to divest the Hylte paper site to Sweden Timber has no immediate impact on production nor customer deliveries.
The previously disclosed agreement to divest the Maxau paper site in Germany to Schwarz Produktion is expected to conclude at the beginning of this year.
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