3 - Stora Enso

and the asset quality of Stora Enso’s coated
fi ne paper machine base is now
among the best in North America.
Focusing on multi-coated grades
Stora Enso has decided to streamline its
coated fi ne paper product portfolio by
focusing on multi-coated grades. The
divestment of Grycksbo Mill in Sweden
and the planned closure of PM 1 at
Varkaus Mill in Finland are in line with
this decision, and will complete Stora
Enso’s exit from the single-coated segment.
High-quality eucalyptus pulp
Eucalyptus pulp from captive production
in South America will be the main raw
material for Stora Enso’s coated fi ne
paper units in Europe in the future.
Stora Enso’s share of the output from
Veracel Pulp Mill will go to its fi ne paper
mills in Northern Europe and China,
which will further enhance the competitiveness
of these mills.
Key figures (excluding Merchants)* 2003 2004 2005
% of the
Group
Sales, EUR million 2 760.6 2 668.8 2 690.3 18.1
Operating profit, EUR million 138.9 54.5 62.2 17.4
% of sales 5.0 2.0 2.3
Operating capital, EUR million 2 781.6 2 795.2 2 752.1 22.2
Return on operating capital, % 4.7 1.9 2.2
Capital expenditure, EUR million 175.7 180.6 115.9 10.3
Average number of employees
Market-related production curtailments,
8 274 7 758 7 637 16.5
1 000 tonnes
*excluding non-recurring items and goodwill
142 28 19
1 000 tonnes
Deliveries
2003
Read more about these developments
on page 19.
Deliveries
2004
Deliveries
2005
Capacity
2006
Office (uncoated) paper 1 347 1 393 1 344 2 090
Graphic (coated) paper 2 066 2 203 2 177 2 315
Total 3 413 3 596 3 521 4 405
World’s leading producers of uncoated and coated fine paper
Capacity in 1 000 tonnes
International Paper
Stora Enso
APP
UPM
Sappi
M-real
Nippon
Weyerhaeuser
Oji
Domtar
0
1 000
2 000
Coated fine paper Uncoated fine paper
Source: Jaakko Pöyry
3 000
A fast-growing market
China is a massive and fast-growing market,
with good potential for Stora Enso’s
products. The Group completed the
modernisation of its fi ne paper machine
in Suzhou in 2005, increasing the mill’s
capacity (including converting) to
240 000 tonnes of multi-coated fi ne
paper, of which nearly all is sold locally.
Demand for coated fi ne paper in China
is expected to continue growing rapidly
in the future.
Accessing a large customer base
Cost-competitive, high-quality production,
superior customer service, and an
extensive distribution network are especially
important in the fi ne paper business.
With this in mind, Stora Enso has
strengthened its merchant business,
Papyrus, over the past two years.
4 000
5 000
6 000
More from digital printing
Anyone with a need for high-quality,
rapid, customised, and short-run
documents – such as brochures,
folders, invitations, and smallcirculation
magazines – can benefi t
from digital printing technology.
Digital printing also supports the
distribute-and-print model, for
distributing material electronically
and printing near the point of use.
Colour copying and direct printing
from digital sources is developing
rapidly, and the resolution and speed
of desktop and network printers are
increasing all the time. New
machinery is placing new demands
on paper properties such as improved
feel, appearance, and print
performance. Stora Enso’s digital
printing lab in Imatra in Finland is a
key resource in developing technical
expertise in this area, and ensuring
that Stora Enso Fine Paper’s offi ce
papers are suitable for the full range
of digital printing needs.
Fine paper prices in Germany and the USA in 2000 – 2005
EUR
USD
1 200
1 800
1 000
1 600
1 400
800
1 200
600
1 000
800
400
600
200
400
200
0
0
00 01 02 03 04 05 06
WFU Germany (EUR) WFC Germany (EUR)
WFU USA (USD) WFC USA (USD)
Source: PPI This Week, Pulp & Paper Week
Three major acquisitions in Europe
since 2004 have further strengthened
the Company’s position, and Papyrus
is now Europe’s second-largest paper
merchant. •
Read more about the merchant business
on page 18.
STORA ENSO COMPANY 2005• 17