Stora Enso has announced wide-ranging restructuring actions that will result in the reduction of 1,150 employees and the closure of several productions units, including the Näpi sawmill in Estonia.

The Group said its aims were to strengthen long-term competitiveness, improve profitability and focus capital allocation in strategic growth markets. The planned restructuring actions are combined with previously initiated negotiations in the Packaging Materials division.

The Näpi sawmill closure decision was due to reduced long-term raw material availability, increased wood costs and low profitability.

Stora Enso said it planned to improve the competitiveness of its total wood products business by focusing on the sawmills with strategic growth opportunities.

The Näpi sawmill has an annual capacity of 50,000m3 of sawn timber, 180,000m3 of further processed wood products and 25,000 tonnes of pellets. The planned closure would take place during the fourth quarter of 2023 and directly impact 100 employees in Estonia.

It is also looking to reduce approximately 300 positions in the Group’s European offices.

In addition, Stora Enso plans to permanently close down its Sunila pulp production unit in Finland, the De Hoop containerboard site in the Netherlands, one containerboard line at its Ostroleka site in Poland. The closures would target a reduction of approximately 600 employees.

The planned restructuring actions would decrease Stora Enso’s annual sales by approximately €380m, based on the 2022 figures. Operational EBIT is expected to improve by approximately €110m annually.

“These measures are of course very difficult and would not be proposed unless it was absolutely necessary for our long-term competitiveness,” said Annica Bresky, Stora Enso’s President & CEO.

“We are at a critical juncture in our strategy advancement, and to further our market position an increased focus on capital allocation and decentralised empowerment is needed. “This sadly means that assets suffering from challenged profitability would need to be closed, in combination with a more streamlined headquarter organisation.”