Swedish sawmill & pellet plant to close

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

“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, executive vice-president,
Stora Enso Wood Products.

“We are investigating alternatives for supplying our key customers and plan to
utilise some of the sawmill and pellet mill machinery at other Stora Enso
locations. The planned mill closure would not affect wood purchasing in
Sweden,” he adds.

The Group will record a one-time non-cash fixed asset and working capital
write-down of approximately EUR 20 million, and in addition, a restructuring
provision with a cash impact of approximately EUR 9 million as non-recurring
items in its first quarter 2011 operating profit. Based on 2010 annual figures
the closure would reduce Stora Enso's annual sales by approximately EUR 65
million but have no material impact on the Group's annual operating profit. The
planned closure will have a positive tax impact of approximately EUR 8 million
in the first quarter of 2011.

Kopparfors Sawmill has a production capacity of 310,000 m³/year of sawn
wood, of which 150,000 m³ can be further processed by planing. The pellet mill
has a capacity of 160,000 tonnes/year.