Finnish-Swedish forest industry firm Stora Enso announced on Monday that it plans to sharply downsize operations at its Oulu Mill, with the potential loss of 400 jobs. The facility now has some 600 employees.
The company will replace the current two production lines manufacturing fine paper with a single line making a type of packaging board known as kraftliner. It says it will complete the overhaul and close down its sheeting plant by the end of 2020 at the latest.
Established in 1935, the Oulu Mill is one of the company's three paper mills in Finland. It now produces wood-free coated (WFC) paper and a much smaller amount of bleached softwood pulp. Despite its name, wood-free paper is produced from chemical pulp made from wood.
Liisa Nyyssönen, communications director of the company's paper division, tells Yle that demand for fine paper has dropped more quickly than expected.
She attributes the slashing of hundreds of jobs to changes brought by new technology. Producing cardboard will only require one production line rather than the two needed for producing paper, she says.
"There are now 130 people working in paper sheeting, but we won't need sheeting anymore, for instance," says Nyyssönen.
"A bolt out of the blue"
The Oulu Mill's chief union steward, Olli-Pekka Kaikkonen, says the extent of the co-determination negotiations came as a shock.
"This news came as a bolt out of the blue," Kaikkonen remarks.
Kaikkonen adds that employees were aware that there would be some impact on staffing numbers if the factory was converted to a packaging board mill.
"However we imagined that the possible redundancies would affect a significantly smaller number of people," he says. "Lay-off talks start next Monday. As far as we know now though, paper will still be produced into 2020."
Impact across North Ostrobothnia
Oulu Mayor Päivi Laajala sought to put a bright face on the day's news, saying it is a fine thing that the mill will still remain in operation despite the redundancy talks.
She also points out that the change will affect not only Oulu, but also the entire North Ostrobothnia area.
"The regional impacts will really be significant. This is a big deal," says Laajala. She promises that the city will support those losing their jobs with employment services and training if needed.
Stora Enso, one of the world's biggest producers of paper, wood and cardboard, was formed in 1998 when Finnish forest products company Enso merged with Sweden's Stora, which began as a mining company in 1288. Enso traced its history back to 1872, when the Gutzeit sawmill was established in Kotka.
In addition to Finland and Sweden, the company has mills in other European countries as well as in China, Brazil and Russia.