Stora Enso divests its Nymölla paper production site to Sylvamo for €150 million
05 Jan 2023 --- Stora Enso has closed the divestment process of its assets at the Nymölla site in Sweden to Sylvamo, a US-based global producer of uncoated paper. First announced in September 2022, the divestment transaction was completed following regulatory approvals for an enterprise value of €150 million (US$159 million).
This transaction is part of the earlier announced plan to divest four of the company’s five paper production sites. “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,” the “largest private forest owner in the world” shares.
Based on the 2021 figures, Stora Enso reports that the divestment is expected to reduce annual sales by approximately €290 million (US$308 million).
“Subject to closing date adjustments, [it] will book a one-time disposal loss of approximately €25 million (US$27 million) in its IFRS operating profit in the first quarter of 2023, as an item affecting comparability.”
Room to grow
In March last year, Stora Enso announced that paper is not a strategic growth area for the Group. It initiated the sales process for the divestment of its sites Anjala in Finland, Hylte and Nymölla in Sweden, and Maxau in Germany.
“Through divesting a majority of our paper assets, we can increase the focus on our defined strategic growth areas of renewable packaging, building solutions and biomaterials innovations,” says Annica Bresky, president and CEO at Stora Enso.
“When assessing potential divestment options, we look for new ownership that will provide a sustainable long-term future for the sites and the people that work there.”
Stora Enso’s divestment of the Nymölla site has no immediate effect on its paper operations.
Sylvamo plans to integrate the Nymölla site into their global paper business, and the 520 employees in the mill organization at Nymölla are 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 tons of woodfree uncoated office papers, with Multicopy as the leading paper brand. “We found a good, experienced owner in Sylvamo for our Nymölla site. The process to divest the remaining paper assets continues,” says Seppo Parvi, CFO and head of the paper division at Stora Enso.
In December, Stora Enso also initiated a sales process for a possible divestment of its consumer board production site in Beihai, China. The divestment would also include the Group’s forestry operations in the surrounding region, which supply raw materials to the Beihai site.
Strategic investments
In November last year, Stora Enso committed €80 million (US$82 million) to centralize and modernize the wood handling process at its Imatra Mill in Finland. The funds were used to boost the facility’s premium packaging board production capacity and decrease water consumption throughout the debarking process. A third debarking line was installed as part of the project, chip handling technologies were improved, and the architecture of the existing wood yard was changed.
Additionally, in October, the company invested approximately €1 billion (US$98.4 million) to convert its remaining idle paper machine at the Oulu site in Finland into a high-volume consumer board production line. Production on the converted machine is estimated to start in early 2025 and is intended to support the company’s capacity for packaging production.
Stora Enso also announced a new production site for cross-laminated timber in Ždírec, Czech Republic, to supply what the company considers to be environmentally sustainable materials to consumers.
Renewable packaging, biomaterials, wooden construction and paper company plans on building the new site to keep up with the booming demand for environmentally sustainable materials.
Edited by Radhika Sikaria
