Stora Enso and Arauco joint venture Montes del Plata invests USD 1.9 billion in building state-of-the-art 1.3 million tonnes per year pulp mill at Punta Pereira, Uruguay

STORA ENSO OYJ STOCK EXCHANGE RELEASE 18 January 2011 at 14.30 EET

Stora Enso’s and Arauco’s joint-venture company Montes del Plata will build a new state-of-the-art 1.3 million tonnes per year pulp mill at Punta Pereira, in the department of Colonia, Uruguay. The total investment is estimated to be approximately USD 1.9 billion (EUR 1.4 billion). Each of the joint-venture shareholders has a 50% stake in the mill’s equity and will be entitled to half of its output. The project will be financed about 40% through equity and about 60% through loans raised by Montes del Plata. Stora Enso is consolidating its 50% share with the equity method.

The project comprises a state-of-the-art with Best Available Techniques pulp mill, a deepwater port and a power generating unit based on renewable resources. The new mill is expected to be operational by the end of the first quarter of 2013.

The eucalyptus pulpwood will be sourced essentially from Montes del Plata’s own plantations. The company currently owns 254 000 hectares of forestland in Uruguay, of which 138 000 hectares are planted, about 100 000 hectares are protected and 16 000 hectares are suitable for planting. The project will also be of value for the economic and social development of Colonia and Conchillas, where the company is committed to an environmental performance of excellence and to working with the local authorities and the community.

“Low cost plantation-based pulp is one of the cornerstones of our strategy. Our investment is a concrete step in implementing this strategy to build the future of our Group. The Uruguayan government authorities both nationally and locally have been a welcoming supporter to Montes del Plata. We look forward to implementing the project in close co-operation with them. We are also proud to invest together with a great partner like Arauco and have a joint vision of building something in Uruguay that will be a role model for the world,” says Jouko Karvinen, CEO of Stora Enso.

“We are extremely happy to see this investment becoming a reality. It is the result of hard work by the team of Montes del Plata, strong support from the shareholders Stora Enso and Arauco, and seamless co-operation between the company and the Uruguayan and Colonia authorities. A new stage is beginning in which we will strive to build a project of excellence,” says Erwin Kaufmann, CEO of Montes del Plata.

The new pulp mill will be the largest-ever privately executed investment in Uruguay. The construction and operation of the pulp mill will have significant economic and social impacts in the country. An average of 3 200 and a peak of 6 000 workers will be employed during construction and about 500 people is expected to work at the mill once it is operational. The mill is forecast to have a positive impact on Uruguay’s GDP of 0.8% during construction and 2% when it is operating. 

For further information, please contact:

Markus Rauramo, CFO, tel. +358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations, tel. +358 2046 21242
Lauri Peltola, Head of Communications and Global Responsibility, tel. +358 2046 21380

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Stora Enso is a global paper, packaging and wood products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products. The Group is the world leader in forest industry sustainability. We offer our customers solutions based on renewable raw materials. Our products provide a climate-friendly alternative to many non-renewable materials, and have a smaller carbon footprint. Stora Enso is listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora Enso employs some 27 000 people worldwide, and our sales in 2009 amounted to EUR 8.9 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.

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