The Finnish-Swedish producer has also decided to push through a profit enhancement plan after failing to see any improvement in market conditions.

Chief executive Jukka Hrml said North American markets had been in a prolonged downturn since his group bought Consolidated Papers in 2000.

Stora will spend 170m to implement the necessary measures, which include machine rebuilds, plant closures and 500 job cuts. The costs will be spread over the next three years.

Write-offs and charges amount to 51m, but from 2005 the company expects a 54m annual improvement in its North American operational profit, which will come from cost savings and increased productivity.

Port Hawkesburys groundwood and high-yield pulp operation will close, as will the groundwood pulp mill at Kimberly at the end of 2002.

Story by Andy Scott