HELSINKI (News release) -- Stora Enso has decided to discontinue the divestment process for its Beihai packaging board production site and forestry business, announced in December 2022. Stora Enso is of the view that the value in own use of the assets exceeds the achievable transaction value, and has therefore chosen to retain these operations within the Group.
Stora Enso's strategic ambition is to build on its global leading position in the fiber-based packaging market. The business of the Beihai site will be developed through a continued focus on operational excellence, cost optimisation, and product development. By adjusting the product mix to increase the share of liquid packaging board and other premium grades, the Beihai site will strengthen Stora Enso's leading position as a global supplier. No significant capital expenditure is expected in the mid-term.
The Group's other liquid packaging board production sites include Imatra, Finland and Skoghall, Sweden, which together with Beihai, cater for major global customers while also serving local customers with high-quality products.
"Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business. We are confident that Stora Enso is the best positioned to continue operating this site going forward. Given the recent global cost escalation of wood and logistics, the relative cost competitiveness of the Beihai site has improved. Through the Beihai site, we will continue to serve our global and most demanding customers with premium packaging board in the Asia Pacific region," says Stora Enso's President and CEO Hans Sohlström.
Stora Enso owns approximately 80% of the Beihai production site and forest operations, its local partners and International Finance Corporation (IFC) remain owners of the balance.
Impact on financial reporting
The Beihai site was classified as assets held for sale from the end of 2023. As at the end of September 2024, such classification has been ceased. Adjusted EBIT and IFRS operating result for Q1 to Q3/2024 will decrease by EUR 7.5 million per each quarter, EUR 30 million for the full year 2024, due to the inclusion of previously suspended depreciation into the restated results. Additionally, asset held for sale classification in balance sheet will be restated. There are no cash flow impacts as a result of the restatements.PulPac licensee, Stora Enso, announces the opening of a groundbreaking Dry Molded Fiber Production Unit in Skene, Sweden. The facility is the largest and most advanced of its kind, marking a significant milestone in sustainable packaging technology. Production is set to begin in Q4 2024 after successful large-scale testing.
Stora Enso's Skene Production Unit utilizes PulPac's innovative Dry Molded Fiber process to produce high-performance formed fiber products, such as cup lids, designed to replace traditional plastics in food and beverage packaging. Unlike conventional wet forming, the dry process reduces water and energy consumption significantly, thus offering an even more sustainable manufacturing method for fiber-based packaging. Additionally, any excess material is recaptured and reused, ensuring a circular process with minimal waste.
At the heart of this innovation is the advanced technology developed by PulPac, the leading company in the field. Their Dry Molded Fiber technology provides efficient production at high speeds, enabling Stora Enso to meet growing market demand for fully renewable, recyclable, and biodegradable fiber-based packaging solutions.
"Stora Enso is the first producer to successfully implement this new dry forming technology on a large scale," says Anna Stenström, Operation Director at the Skene Production Unit. "We are truly excited to pioneer this new approach and to explore all the possibilities it offers to shape the future of sustainable packaging."
The products produced with Dry Molded Fiber offer a significantly lower CO2 footprint compared to single-use plastics. The dry forming process offers also flexibility in barrier additives for customized functionality as well as an excellent surface finish with the option to advanced decoration possibilities.
Juuso Konttinen, Senior Vice President of Biomaterials Growth Businesses at Stora Enso, added: "The Skene Production Unit represents another great advancement in sustainable packaging by Stora Enso. Dedication of our team and the collaboration with PulPac and other suppliers has enabled us to scale up this innovative technology to meet the continuously growing demand for high-quality and more eco-friendly products."
Sustainability is at the core of Stora Enso's operations. Implementing Dry Molded Fiber is an example how they continue to lead the transition to circular, low-carbon solutions in the packaging industry, making a lasting impact on both the environment and the communities it serves.
"It's fantastic to collaborate with forward-thinking leaders like Stora Enso. We are proud to see Dry Molded Fiber powering their scale-up of dry forming, and we remain committed to supporting their success every step of the way." comments Sanna Fager, Chief Commercial Officer at PulPac.
