Finnish renewable materials manufacturer Stora Enso has started co-determination process to convert Oulu paper mill into packaging board mill as well as close one paper machine.
The company plans to convert the Oulu paper mill into packaging board production and shut down the paper machine 6 and sheeting plant.
The planned change is expected to affect 400 employees at the Oulu mill.
Stora Enso board of directors will take decision on the potential conversion during the first half of this year, after the completion of the co-determination process.
In June 2018, Stora Enso announced that it would assess the development opportunities for the Oulu Mill, as the current coated wood-free paper production is struggling with market demand and profitability.
The feasibility study will evaluate options for the conversion of the mill into packaging board grades.
The proposed plan is to convert paper machine 7 into kraftliner production based on the technical and financial aspects of the feasibility study results.
Stora Enso will also evaluate the option to shut down paper machine 6 and the sheeting plant by the end of 2020.
According to the company, the capital expenditure for the potential investment is estimated to be around €350m during the years 2019–2021 instead of €700m estimated in the initial feasibility study scope.
The investment will be used to install an advanced kraftliner line that can process 450 000tons per year, as well as modify the pulp mill and drying machine to produce unbleached brown pulp.
Stora Enso will also use the investment to enhance environmental performance. The potential conversion of Oulu Mil will help Stora Enso to further advance its position in the growing packaging business.
Stora Enso is planning to file an application for the environmental permit in this month, which will also include description of a potential conversion for paper machine 6.
As per Finland’s co-determination law, the company will carry out negotiations regarding the proposed conversion plan and reorganization of structures, functions, resources and job roles.
Stora Enso Oulu’s entire personnel, including around 600 people, will participate in the negotiation process, which will begin on 25 March this year.