Stora Enso has signed an agreement to divest the key assets of its Suzhou Mill in China, including the land-use rights and buildings, to the local government of Suzhou National New & Hi-tech Industrial Development Area (SND).
During its 20 years of operation, the city of Suzhou has grown around the mill, making it difficult to develop and continue industrial operations at the current site. The cash consideration for the divestment of assets is approximately Euro 240 million.
Production is planned to be stopped during June 2016 and the transaction is expected to be completed in the 4Q 2016. Operational profitability of the mill is close to break even so the transaction will not have a material impact on Stora Enso’s operational EBIT going forward.
Based on annual figures for 2015, the divestment is expected to reduce Stora Enso’s annual sales by Euro 126 million and simultaneously decrease the annual woodfree coated paper production capacity by approximately 240,000 tonnes. Suzhou Mill currently employs approximately 500 people, who will receive support in finding new employment opportunities.
Stora Enso is a leading provider of renewable solutions in packaging, biomaterials, wooden constructions and paper on global markets.
