Stora Enso becomes the sole producer of coated mechanical paper in Latin America The Group acquires

STORA ENSO OYJ Stock Exchange Release 22 August 2006 at 12.00

Stora Enso becomes the sole producer of coated mechanical paper 
in Latin America 
The Group acquires assets from International Paper in Brazil 

Stora Enso has reached an agreement to acquire 100% of the 
shares in Vinson Indústria de Papel Arapoti Ltda. and Vinson 
Empreendimentos Agricolas Ltda. from International Paper. The 
deal comprises a paper mill producing coated mechanical paper 
(205 000 tonnes annual capacity), a sawmill (150 000 m3 sawn 
timber annual capacity) and approximately 50 000 hectares of 
land out of which approximately 30 000 hectares are productive 
plantations. (These
assets were formerly owned by Inpacel - Indústria de Papel 
Arapoti Ltda. and Inpacel Agroflorestal Ltda., subsidiaries of 
International Paper.)

The estimated enterprise value is USD 415 million (EUR 324 
million) with about half of the value attributable to paper 
business, including tax credits of USD 10–15 million, and the 
balance to sawmill and plantations. This equates to an 
acquisition cost of approximately USD 1 100 (EUR 860) per tonne 
paper capacity. The transaction is expected to be completed in 
the third quarter of 2006, subject to customary closing 
conditions.

The acquisition of International Paper’s coated mechanical paper 
business in Brazil supports Stora Enso’s existing strategy for 
the new growth markets. “The strategic aim of this acquisition 
is to strengthen our presence in the Latin American market 
through paper production in Brazil. This will firmly establish 
our publication paper business in Latin America and expand it 
into new markets. With this acquisition we will become the sole 
producer of coated mechanical paper in Latin America,” says CEO 
Jukka Härmälä. 

The acquired entities are at Arapoti, in the state of Paraná, 
near major markets. In 2005 the companies had net sales of USD 
228 million (EUR 178 million), 76% from coated mechanical paper, 
15% from plantations and 9% from sawmilling. EBITDA and EBIT in 
2005 were USD 55 million (EUR 43 million) and USD 39 million 
(EUR 31 million) respectively. The acquired entities have 711 
employees. 

The light-weight coated (LWC) production line, which has an 
annual capacity of 205 000 tonnes, includes a fully integrated 
thermo-mechanical pulp (TMP) mill. The paper machine and the TMP 
line were built in 1992 and the paper machine was rebuilt in 
1999. The site has scope for production expansion in the future. 

The sawmill started operations in autumn 2004. The annual 
sawmilling capacity is 150 000 m3. The Vinson companies own 
approximately 50 000 hectares of land, including 25 000 hectares 
of pine and 5 000 hectares of eucalyptus plantations, and are 
more than self-sufficient in wood supply.

The paper mill will be incorporated into Stora Enso’s 
Publication Paper division and is the main focus in the 
acquisition. The sawmill and plantations will be incorporated 
into Stora Enso Forest Products division. The future development 
options for the sawmill and plantations are being evaluated. 
Stora Enso Latin America will have a supporting role in 
administration and sales.

Financial impact on Stora Enso
The Vinson acquisitions and Celbi Pulp Mill divestment are 
estimated to have the following net financial effects on Stora 
Enso: Stora Enso debt is estimated to decrease by EUR 100 
million and the debt/equity ratio from 0.65 (end of June 2006) 
to 0.63. The acquisitions are moderately earnings per share 
(EPS) and cash earnings per share (CEPS) accretive.

Stora Enso in Latin America
Veracel Pulp Mill in Brazil, Stora Enso’s joint venture, started 
production of low-cost, high-quality bleached eucalyptus pulp in 
May 2005. The annual capacity of the mill is 900 000 tonnes and 
the joint venture has 76 000 hectares of eucalyptus plantations 
in Brazil. The joint venture is exploring the possibility of 
building a second fibre line at the Veracel site. In addition, 
Stora Enso has been purchasing land for plantations in southern 
Brazil and Uruguay. The Latin America division headquarters is 
in São Paulo and the Group has sales offices in Buenos Aires, 
Mexico City, Santiago de Chile and São Paulo through which it 
sells about 400 000 tonnes of paper and board annually.

For further information, please contact:

Jukka Härmälä, CEO, tel. +358 2046 21404
Hannu Ryöppönen, CFO, tel. +358 2046 21450 
Bernd Rettig, SEVP, Stora Enso Publication Paper, tel. +49 2115 
812 310
Nils Grafström, President, Stora Enso Latin America Division, 
tel. +55 1181 759 283
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 
197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659

www.storaenso.com
www.storaenso.com/investors

A map of Stora Enso’s activities in Latin America and image material 
are available at 
http://bmt.storaenso.com/storaensolink.jsp?imageid=20060822
Please, copy and paste the link into your web browser. 

The previous press releases regarding Stora Enso’s activities in 
Latin America and Celbi Pulp Mill divestment are available at 
www.storaenso.com/press: 

-	8 August 2006: Stora Enso finalises divestment of Celbi Pulp 
Mill and sale of Advance Agro shares 
-	8 June 2006: Stora Enso sells its Celbi Pulp Mill to Altri
-	26 September 2005: Stora Enso is purchasing land in Brazil and 
Uruguay
-	28 September 2005: Stora Enso is exploring the possibility of 
building a new fibre line at Veracel
-	15 August 2005: Stora Enso’s Oulu Mill receives first shipment 
of Veracel pulp
    -     8 May 2003: Stora Enso and Aracruz announce decision to build 
Veracel pulp mill
 

STORA ENSO OYJ



p.p.		Jussi Siitonen		Minna Taukojärvi