Stora Enso to rebuild Varkaus fine paper PM

Stora Enso is investing EUR 54.8 million in rebuilding fine paper machine 3 (PM 3) at its Varkaus Mill in Finland to improve efficiency at the mill and profitability in the Office Paper business area. This project, which will increase mill specialisation within the division, is scheduled to be completed in December 2007.

The investment is in line with Stora Enso's fine paper strategy. PM 1 at Varkaus Mill, which had an annual capacity of 95 000 tonnes of single-coated fine paper, was closed down in November 2006 as part of Stora Enso's Asset Performance Review. Arrangements for the closure of PM 1 were negotiated locally, which enabled the new investment. The investment will increase the mill's annual production capacity by about 95 000 tonnes to 315 000 tonnes of uncoated fine paper, but the number of personnel will not increase.

Following the investment, envelope paper production will be transferred from Veitsiluoto Mill to Varkaus Mill, allowing Veitsiluoto Mill to specialise in producing document printing paper. Production of writing paper will be transferred from Varkaus Mill to Imatra Mills.

"Varkaus Mill is a fully integrated mill located close to good fibre resources. Through this investment we can improve the fine paper mill's future competitiveness and strengthen its position in the division's asset portfolio," comments Pekka Laaksonen, SEVP, Stora Enso Fine Paper.

Recent investments in Varkaus Mill include:
- approximately EUR 47 million in rebuilding of the woodhandling department to be completed in September 2007;
- approximately EUR 47 million in a new thermomechanical pulp (TMP) line completed in summer 2004;
- approximately EUR 20 million in sawmill modernisation completed in spring 2004.

For further information, please contact:
Juha Vanhainen, SVP, Stora Enso Fine Paper, Office Papers, tel. +358 40 541 8178
Reino Panula, General Manager, Stora Enso Varkaus Mill, tel. +358 2046 32740
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659

Stora Enso's Varkaus Mill produces fine paper, directory paper, newsprint and coreboard on three paper machines and one board machine with a total annual capacity of about 620 000 tonnes of paper and board, plus 345 000 m3 of sawn wood products. The mill's annual wood consumption is approximately 2.3 million m3. The mill employs about 1 000 people.

Source: Stora Enso