Finnish union threatens strikes in response to Stora Enso's cost reduction plans

The Finnish Paper Workers' Union has threatened strikes following Stora Enso's announcement that it plans to close another raft of mills, affecting the jobs of some 450-1,100 staff.

Yesterday, the company said it would permanently close its Sunila pulp mill, its Tolkkinen sawmill and its Varkaus mill. It also will divest its Kotka mill during the next year-and-a-half.

In addition, the group plans to permanently shutdown a paper machine at its Imatra mill, with all closures going ahead unless paper demand and pricing "clearly recover".

The company blamed the cutbacks on weak market demand and price falls that have hit the paper manufacturing sector hard over the past few years.

However, reports in Finnish newspapers have said the Finnish Paper Union may strike against the planned closures and that this could extend beyond Stora Enso's staff and include the entire forest products sector.

Stora Enso chief executive Jouko Karvinen said the company had tried to move quickly in the past two years to try and improve its long term financial returns.

"Divestments, de-layering of the organisation and significant reduction of production assets and fixed costs have all been and remain part of our efforts," he said.

"The operating environment has deteriorated faster than ever before, long-term structural cost inflation in fibre and energy costs has been followed by dramatic weakening in demand."

In July, Stora Enso posted a second-quarter operating profit of €49m (£42m) – down from €94m at the same time last year.