Stora Enso announced on Friday that it is making a 110 million euro investment in its factory in Varkaus, eastern Finland.
Most of the money will go towards converting the current fine paper machine into a lightweight containerboard facility by autumn 2015. The renovated plant will have a capacity of around 390,000 tons a year.
“Utilising existing assets within Stora Enso and modifying them to a new product line is part of Stora Enso’s transformation,” outgoing CEO Jouko Karvinen said.
“Varkaus is an ideal mill for this kind of conversion. It has an integrated pulp mill, a power plant and a suitable paper machine. In addition, the mill is well located from a raw material supply point of view and has the necessary infrastructure and competence to run the project successfully,” Karvinen added.
The conversion will see the plant’s current annual production of 280,000 tons of fine paper brought to an end in August next year.
Stora Enso currently employs 260 workers in pulp and paper production at its Varkaus facility. The planned effect of this investment on workforce numbers has not been made public.
Feasibility studies into the conversion were carried out in summer last year. Stora Enso has stated that corrugated board is an important growth market.
Earlier this week chief executive Karvinen announced he is to retire by the end of 2014 after seven years at the helm.
The company recently posted increased operating profits, and Karvinen said that the annual 200 million euro cost-cutting drive is “progressing faster than expected”.
The firm says it is looking to axe 2,500 jobs globally, 650 of which in Finland. So far around 1,850 staff posts have been shed.