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Stora Enso to close Kemi plant with loss of 670 jobs

The firm also says it plans to permanently shut down a mill in Sweden.

Stora Enson Veitsiluodon tehdas Kemissä
File photo of Stora Enso's Veitsiluoto pulp and paper mill in Kemi, northern Finland. Image: Pirkko Kukko-Liedes / Yle

Finnish forest products manufacturer Stora Enso has announced that it plans to permanently shut down its Veitsiluoto pulp and paper mill in Kemi, northern Finland as well as the firm's Kvarsveden mill in Sweden.

The company said it was planning to hold negotiations with employee representatives regarding the jobs of 670 people at the Finnish plant and 440 workers in Sweden.

Prime Minister Sanna Marin (SDP) reacted to the closure on Twitter, saying the move was "heartbreaking for the workers and for Kemi."

The company said both facilities were loss-making, due to a decline in demand for paper over the past decade, adding that the downward trend was then accelerated by consumer behaviour changes due to the coronavirus pandemic.

In a statement issued on Tuesday, Stora Enso’s president and CEO Annica Bresky said the firm needed to close the units to improve the company's competitiveness.

"This sadly means the closure of unprofitable assets. As communicated last year, we have reviewed our strategy and are shaping our business for accelerated growth and value. We are focusing on packaging, building solutions and biomaterials innovations, where we see strong growth potential," Bresky said in the statement.

Minister of Economic Affairs Mika Lintilä called the announcement "sad", adding that the Ministry of Economic Afffairs and Employment would "immediately begin preparations for the sudden restructuring."

Savings of €35m

The closures, according to the company, will cut the firm's paper production capacity by 35 percent to around 2.6 million tonnes annually. At the same time it said the move would cut Stora Enso's yearly paper sales by 600 million euros but improve operational EBITDA by 35 million euros per year.

Veitsiluoto's sawmill will remain operational, however, a facility which currently employs about 50 workers, according to the company.

Founded in 1922, the Veitsiluoto mill is one of Finland's largest, producing pulp, sawn timber and paper.

There has been widespread speculation among economic experts that the company would close the plant.

Newspaper Helsingin Sanomat was the first outlet to report on the closure.

Edited 11:46 20/04 to include reaction from government.

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