Stora Enso Approves Investment

Stora Enso's board of directors approved the plans for building a new paper machine at Kvarnsveden, Sweden as part the Asset Restructuring Program, and for major improvement of energy efficiency at Skoghall Board Mill, Sweden.

The purpose of the Asset Restructuring Program is to increase the overall competitiveness of Stora Enso's assets, which include about a hundred production units, while meeting the quality demands of its customers. The plan includes targeted investments, machine specialization measures and elimination of less-competitive production assets.

Stora Enso will build a new paper machine at Kvarnsveden Mill in Sweden to improve its competitiveness in uncoated magazine paper production. The annual production capacity of the machine will be about 420 000 metric tons of super-calendered papers. The machine is expected to start up at the end of 2005. Paper machine 9 at the mill, which has an annual capacity of 130 000 metric tons of improved newsprint, will be shut down when the new SC machine starts up.

The Asset Restructuring Program also includes other investments in uncoated magazine paper. Paper machine 6 at Maxau Mill in Germany will be rebuilt to enhance its productivity and competitiveness.

When the new paper machine starts, paper machine 3 at Langerbrugge Mill, which has an annual capacity of 165 000 metric tons, will change from making mainly high-quality SC to exclusively SC-B paper. This will allow Langerbrugge to maximize the usage of recycled fiber.

In addition, the Group will cease non-competitive production of SC paper on paper machine 5 at Wolfsheck Mill in Germany when the new machine at Kvarnsveden starts-up. The Group is investigating options for paper machine 5 at Wolfsheck Mill, but it will not continue in production within the Publication Paper division. The mill currently has two paper machines producing some 150 000 tonnes of high-quality SC paper and wallpaper base annually. The mill will be further developed within Stora Enso.