The biomaterials group rocked the industry two months ago when it announced plans to take out more than one million tonnes of paper capacity with the closure of two mills, potentially affecting 1,100 employees.

The consultation period at Veitsiluoto, one of the world’s biggest paper mills, has now concluded, and it is set to shut during Q3 with the loss of 550 jobs. The original number of jobs at risk was 670. Stora Enso said 28% of the lay-offs would be “managed through pension arrangements”.

Negotiations regarding the Kvarnsveden mill in Sweden, also earmarked for closure, are still ongoing. 

If it closes as well, Stora Enso will take out more than a third of its total paper capacity and the €8.55bn (£7.36bn) turnover group will reduce its paper sales by around €600m.

Stora Enso said it was also working with other locations in the business, the city of Kemi, and other stakeholders on re-training and re-employment options for the affected employees. 

It has also started a multi-engagement project looking at future options for the huge site. 

“The Veitsiluoto site has many advantages for future use, including strong industrial infrastructure with a deep-sea harbour, a connection to the national electricity grid, access to renewable energy with potential for expansion, cooling capacity from the sea, and availability of clean water,” Stora Enso stated.

Veitsiluoto is an integrated facility that produces pulp, paper and sawn products. It lays claim to being the northernmost paper mill in the world and has three paper machines, and an annual capacity of 790,000 tonnes. It makes woodfree uncoated paper for office use, while one machine makes coated paper grades used for magazines and packaging.

Kvarnsveden has an annual capacity of 565,000 tonnes and runs two paper machines making supercalendered magazine papers and improved newsprint. It also has an integrated softwood thermomechanical pulp (TMP) mill with a 900,000 tonne capacity, also slated for closure.

The move is expected to involve some €104m in restructuring and redundancy costs and a €127m impairment charge.

At the end of May Stora Enso made a further reduction in its future paper production capacity with the announcement that it was selling its 310,000 tonne capacity Sachsen newsprint mill in Germany to Model Group, which will convert the mill to make containerboard.

Stora Enso continues to make woodfree uncoated office papers at its Nymölla Mill in Sweden; supercalendered papers at Langerbrugge Mill in Belgium and Maxau Mill in Germany; machine-finished coated papers and coated and uncoated book papers at Anjala Mill in Finland; standard newsprint at Langerbrugge Mill in Belgium and Hylte Mill in Sweden; and improved newsprint and other newsprint specialities at its Anjala Mill in Finland.

The group has also just announced a €21m investment that will increase annual softwood pulp production at Nymölla from 220,000 to 245,000 tonnes, and reduce emissions at the Anjala and Ingerois (folding boxboard) mills.