Finland Times

 

Stora Enso's head office in Helsinki. File Photo – Lehtikuva.

Finnish pulp and paper manufacturer Stora Enso on Monday announced it is to divest the key assets of its Suzhou Mill in China, including the land-use rights and buildings, to the local gov-ernment of Suzhou National New & Hi-tech Industrial Development Area (SND).

 

The total gain on disposal to be reported in operating profit amounts to approximately 180 mil-lion euro of which 26 million euro will be recorded as a positive non-recurring item in Stora En-so’s second quarter 2016 results, said the company in a release.

 

Stora Enso said that during its 20 years of operation, the city of Suzhou has grown around the mill, making it difficult to develop and continue industrial operations at the current site.

 

Production at the mill is planned to be stopped in June 2016 and the transaction is expected to be completed in the fourth quarter of 2016.

 

“Suzhou Mill is a recognised high quality paper producer with an established customer base. However, the mill only has one paper machine and it will no longer be competitive after the emergence of larger-sized mills in the Chinese market. The location of the mill in the middle of a large city is not favourable for paper production,” said Kati ter Horst, EVP Stora Enso’s Paper division in the release.

 

According to Stora Enso, the cash consideration for the divestment of assets is approximately 240 million euros.