Swedish pellet plant closes

June 23, 2011 – Stora Enso is planning to
permanently close down Kopparfors Sawmill in Sweden by the end of 2011 due to
several years of losses and no feasible options for improvement. The plan also
includes closing down the associated pellet mill.

Kopparfors Sawmill has an annual production capacity of 310,000 cubic-metres of
sawn wood. The pellet mill has an annual capacity of 160,000 tonnes. The
sawmill and pellet mill have 110 employees.

“Despite several years of focused efforts to
turn around the losses of Kopparfors Sawmill, we have been unable to achieve
the improvements needed in efficiency and profitability. The slowness of the
recovery in markets combined with poor operational efficiency, high raw
material costs, unfavourable exchange rates, and lack of cost flexibility have
kept Kopparfors loss-making. In our analysis, even in the most optimistic
scenario, we can see potential for only marginal improvement,” says Hannu
Kasurinen, EVP, Stora Enso Wood
Products.