Stora Enso?s Port Hawkesbury Mill to restart
STORA ENSO OYJ Stock Exchange Release 29 September 2006 at 15.00
Stora Ensos Port Hawkesbury Mill to restart
Stora Ensos Port Hawkesbury Mill in Nova Scotia, Canada, will
restart operations following a 10-month shutdown due to
profitability challenges.
The mill will carry out a phased-in approach to getting the two
paper machines operating, beginning with the immediate start-up
of its paper machine (PM) 2 which has an annual capacity of 360
000 tonnes of super-calendered magazine paper (SC catalogue
and magazine paper), followed by PM 1, which has an annual
capacity of 190 000 tonnes of newsprint.
The three main local factors that impact the future
profitability of the mill are energy, labour and taxes. Stora
Enso has reached the following on these items:
* Energy: The Nova Scotia Utility and Review Board
established a new rate formula for large industrial
customers based on the actual cost for Nova Scotia Power
Inc. to produce electricity.
* Labour: The new labour contract allows modern work
practices and includes wage concessions.
* Taxes: The local municipality has agreed to a 10-year
realty tax agreement. The Province of Nova Scotia has
agreed to phase out the capital tax.
The mill ceased production on 24 December 2005 due to a labour
dispute. The new five-year collective labour agreement (31 May
200431 May 2009) was ratified on 20 June 2006. The agreement
includes a 10% decrease in wages from the 2006 level, changes
to key work practices such as flexibility and overtime, and 54
identified reductions in workforce, which have been achieved
through a voluntary early retirement programme. In addition,
wage reductions of 10% also applied to all salaried personnel.
The agreement was necessary for the mill to achieve
profitability with two machines.
The restart of the mill after the June ratification by the
union was delayed until the issue of high electricity costs was
resolved with the local power utility. The Nova Scotia Utility
and Review Board recently approved a revised power rate for
Extra Large Industrial customers.
The impact on the Stora Enso Groups operating profit during
the shutdown period has been approximately EUR 5 million per
month.
The Port Hawkesbury Mill will continue to face the challenges
of the marketplace and the strength of the Canadian dollar,
which puts particular pressure on Canadian manufacturing
industries exporting to the United States.
For further information, please contact:
Kari Vainio, EVP, Corporate Communications, tel.
+44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 20 7016 3146
Tim Laatsch, SVP, Communications, Stora Enso North America, tel.
+1 715 422 4023
Ulla Paajanen-Sainio, VP, Investor Relations and Financial
Communications, tel. +358 40 763 8767
Stora Ensos Port Hawkesbury Mill has been operating in Nova
Scotia since 1962. It produces 190 000 tonnes of newsprint and
360 000 tonnes of super-calendered paper for the catalogue and
magazine paper markets primarily within North America. Port
Hawkesbury Paper Mill and its forestry unit are part of the
North American operations of Stora Enso Oyj, which also has
papermaking facilities at Wisconsin Rapids, Stevens Point,
Whiting, Kimberly, Niagara and Biron, Wisconsin; and Duluth,
Minnesota.
www.storaenso.com
www.storaenso.com/investors
STORA ENSO OYJ
p.p. Jussi Siitonen Jukka Marttila