3 - Stora Enso

The Mosina plant is Stora Enso’s fi rst unit
in Poland to produce micro-fl ute corrugated
board. The Tychy project involved
rebuilding and modernising facilities and
systems dating from 1996, expanding the
plant’s premises, and installing a new
corrugated board machine.
Stora Enso also decided to strengthen
its leading position in the recovered
paper business in Poland in 2005 by
investing in expanded recycling operations.
This is intended to improve the
availability of raw material supplied to
locations such as Stora Enso’s Ostroleka
Mill in Poland and the Sachsen Mill in
Germany.
In Russia, the corrugated board plant
in Arzamas was expanded, by installing
new converting machines and expanding
the plant’s premises.
Moving closer to the customer
Successful customers are one of Stora
Enso Packaging Boards’ key strengths.
“Our aim is to grow with our key
customers and focus on growth opportunities
in new markets, especially in Russia
and also China in the long term,”
says Kai Korhonen, Senior Executive Vice
President, Stora Enso Packaging Boards.
Read more about the corrugated board
business in Russia on page 23.
Innovating for greater value
Stora Enso has prioritised developing
new packaging systems and products in
close co-operation with its customers as
an important way of moving closer to
the consumer in the value chain. Stora
Enso Consumer Boards is developing a
number of new packaging concepts and
World’s leading cartonboard producers
Source: Jaakko Pöyry
Stora Enso
MeadWestvaco
International Paper
Smurfit Kappa
Graphic Packaging
Mayr-Melnhof
Rock-Tenn
Cascades
Asia Pulp & Paper
Reno De Medici
0
0.5
1.0
1.5
business models with its partners in
response to market trends and consumer
preferences – focusing on food, media,
and pharmaceutical solutions, as well as
digital printing applications. The innovations
and new technologies being developed
will further enhance the competitiveness
of packaging board and renewable
fi bre over alternative materials.
Read more about innovative packaging
solutions in the Sustainability 2005 report
on pages 30–31.
Improving profi tability
Packaging Boards’ short-term profi t
improvement actions include two
closures and one divestment linked to
the Asset Performance Review. The closures
will be completed during 2006.
All three business areas have identifi
ed profi t improvement measures as part
of the Profi t 2007 initiative, including
production-related cost savings and
improvements in the sales and production
mix.
Key figures* 2003 2004 2005
% of the
Group
Sales, EUR million 2 982.9 3 053.4 3 190.2 23.0
Operating profit, EUR million 284.2 271.3 220.0 61.5
% of sales 9.5 8.9 6.9
Operating capital, EUR million 2 853.1 3 096.6 2 968.0 23.9
Return on operating capital, % 9.8 9.0 7.3
Capital expenditure, EUR million 214.3 179.2 237.6 21.0
Average number of employees
Market-related production curtailments,
10 916 10 860 12 454 27.0
1 000 tonnes
*excluding non-recurring items and goodwill
143 96 56
Deliveries Deliveries Deliveries Capacity
1 000 tonnes
2003 2004 2005 2006
Packaging board and paper 3 350 3 499 3 621 4 200
Capacity in million tonnes
2.0
2.5
3.0
As part of its profi t enhancement
efforts in Finland, Stora Enso Packaging
Oy has decided to reorganise its corrugated
board production at the Lahti and
Heinola plants. The existing corrugated
board machine at Heinola will be
replaced with a new, wider machine
during 2006. One of the two corrugated
board machines at Lahti will be modernised,
and the other shut down during
2007. In addition, some converting
machines will be relocated at the Lahti
and Heinola plants. The reorganisation
plan includes a EUR 14 million investment.
New working methods were implemented
at the Lahti and Heinola plants
following the signing of more fl exible
outsourcing contracts at the end of the
year.
These changes will have a positive
impact on the productivity and competitiveness
of the units in question. •
Packaging board prices in Germany and the USA
2000 – 2005
EUR
USD
1 200
1 200
1 000
1 000
800
800
600
600
400
400
200
200
0
0
00 01 02 03 04 05 06
Coated Duplex Germany (EUR) White-lined chipboard Germany (EUR)
Bleached kraftfolding boxboard USA (USD)
Unbleached kraftfolding boxboard USA (USD)
Source: PPI This Week, Pulp & Paper Week
STORA ENSO COMPANY 2005• 21