Stora Enso Announces Equity Stake Sale in Chinese Paper Mill

SEATTLE (Scrap Monster): Helsinki, Finland-headquartered pulp and paper industry company Stora Enso announced that it has completed sale of 60% equity stake in Dawang paper mill in China. The paper mill asset in the Chinese province of Shandong has been sold to its joint venture partner Shandong Huatai Paper, the company press release noted.

The initial announcement regarding the sale was made in July this year by Kati ter Horst, executive vice president of Stora Enso’s paper division. While making the announcement, Horst said that the sale was finalized based on the company’s belief that Huatai will be capable of developing the Dawang mill in the long-term benefit of Chinese paper customers. Incidentally, the mill has a production capacity of 140,000 metric tons of supercalendered magazine paper and other publication paper grades.

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The transaction will mark the exit of Stora Enso from paper production business in China. Although it is unlikely to have any material impact on the company’s EBIT, it is anticipated to impact annual sales by approximately 60 million euros. Furthermore, the completion of the sale transaction will lead to reduction of Stora Enso’s net debt by approximately 22 million euros.

Simultaneously, the company hinted at changes to its paper division organizational structure upon full conversion of its Oulu mill in Finland, which is expected to be completed next year. This could possibly impact as many as 135 jobs in its paper division towards the end of 2020.