The Finnish company Stora Enso announced permanent shutting down three paper machines; a chemical pulp, a groundwood production site alongside a sheeting plan causing the shutdown of two paper and pulp mills.
Stora Enso is well-known as the top Finnish pulp and paper manufacturer whose product is able across the globe. While the lion share of the company’s sales takes place in Europe, a big part also goes to Asia, South America and the United States.
Commenting on that unpopular move, Stora Enso said in the statement that this subsequently means that the shutdown will reduce the company’s share of paper of its annual revenue by about 10 percent. As of June, paper production will now stand for a little over 10 percent of the Finnish firm’s total revenue.
The decision was hard, it was made after talks in Kemi and negotiations with staff representatives. The reported closures meant that Stora Enso will have to cut down their paper production capacity by 35% to 2.6 million tons per year and that the company’s annual paper sales would decrease by €600 million.
Thus, 550 employees will be laid off at the plant in Kemi, of which 80% were working in the paper division while the remaining 20% worked with Efora, a maintenance company overlooking the production processes. Approximately 28% of the layoffs can be carried out through pension arrangements, which minimizes the effects of the employment loss for those involved.
CEO Annica Bresky stated that the pandemic had further accelerated the pace of the dropping demand and that the two paper mills were producing at an unfavourable and loss-inducing overcapacity, Barents Observer reports.