GERMANY – Finnish forestry group Stora Enso has signed an agreement to divest its Maxau paper production site in Germany, and all related assets to Schwarz Produktion, part of Schwarz Group, one of the top retailers in the world.
The transaction is part of Stora Enso’s plan to divest four of its five remaining paper production sites as it shifts its focus to packaging.
In line with its strategy, Stora Enso’s focus is on the long-term growth potential for its renewable products in packaging, building solutions and biomaterials innovations.
Seppo Parvi, CFO and Head of Paper division at Stora Enso said: “We are very pleased with this agreement, as it fulfills our goal of providing a sustainable long-term future for the Maxau site and its employees.
“We will continue with the divestment process for the remaining three paper assets; Nymölla, Hylte and Anjala.”
Schwarz Produktion is expected to assume ownership of the Maxau site at the beginning of 2023.
Schwarz’s plan is to continue paper production at the site, and the 440 employees belonging to the mill organization at Maxau will be part of the transaction.
Stora Enso will continue to operate the Maxau site and serve its supercalendered paper (SC) customers until the closing of the transaction.
The transaction will reduce Stora Enso’s annual SC paper capacity by 530,000 tonnes. Based on the 2021 figures, the divestment is expected to reduce Stora Enso’s annual sales by approximately €250 million (US$249.02m).
Subject to closing date adjustments, Stora Enso will book a one-time disposal gain of approximately €50 million (US$49.80m), in its IFRS operating profit in the first quarter of 2023, considered as an item affecting comparability.
The divestment process continues for the remaining paper sites in Nymölla, Hylte and Anjala with no committed timeline for the conclusion.
The process has no immediate effect on Stora Enso’s paper operations which continue to serve their respective customers.
There is a feasibility study ongoing at the Langerbrugge site for the potential conversion of one of the two paper lines into a containerboard line.
Stora Enso continues to serve its Langerbrugge paper customers at least until the end of 2024.
The company currently has five paper production sites. In total, the Paper division currently employs approximately 2,300 employees.
Stora Enso to divest its Nymölla paper site to Sylvamo
Meanwhile, the Finnish company has also signed an agreement to sell its Nymölla paper production site in Sweden, and all related assets to Sylvamo.
Sylvamo’s plan is to integrate the Nymölla site into their global paper business, and the 520 employees in the mill organization at Nymölla will be part of the transaction.
TreeToTextile, the sustainable textile fiber company, is not part of the transaction and will continue operations at the site.
The Nymölla site’s capacity is 485,000 metric tonnes of woodfree uncoated office papers, with Multicopy as the leading paper brand.
Based on the 2021 figures, the divestment is expected to reduce Stora Enso’s annual sales by approximately €290 million (US$288.86m)
Stora Enso will, at closing, book a one-time disposal loss of approximately €20 million (US$19.92m) in its IFRS operating profit, as an item affecting comparability, subject to closing date adjustments.
Liked this article? Subscribe to our regular email newsletters with the latest news insights from Africa and the World’s packaging and printing industry. SUBSCRIBE HERE.