The Finnish-Swedish pulp and board manufacturer announced its intention to sell in December 2022. Now, after two years, the firm has declared its intention to keep the site, saying that the Beihai plant and forestry operation was worth more as an asset than it would achieve in any sale.
The divestment would have rid Stora Enso of 70,000 hectares of Eucalyptus forest and a factory that produces around 250,000 tonnes of mechanical pulp and 550,000 tonnes of consumer board each year.
Stora Enso owns approximately 80% of the site, alongside local partners and International Finance Corporation, part of the World Bank.
“Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business,” said Stora Enso’s president and CEO, Hans Sohlström.
“We are confident that Stora Enso is best positioned to continue operating this site going forward.
“Given the recent global cost escalation of wood and logistics, the relative cost competitiveness of the Beihai site has improved.
“Through the Beihai site, we will continue to serve our global and most demanding customers with premium packaging board in the Asia Pacific region.”
The Beihai site will be further developed to cut costs and develop new products, with particular emphasis in the product mix being given to premium board grades, like liquid packaging board (LPB).
The group’s other liquid packaging board production sites are based in Imatra, Finland, and Skoghall, Sweden.
According to market intelligence service Smithers, the global market for LPB in 2023 was estimated to be 4.1m tonnes, growing to 4.9m tonnes by 2028, a 20% uplift over five years.
Stora Enso today (24 October) released its nine-month results, with sales so far this year reaching €6.727bn (£5.6bn).
While the company registered a drop in sales from Q1-Q3 2023’s €7.222bn (£6bn) in the same period, this year’s adjusted EBIT jumped from €292m to €478m, and earnings per share (EPS) improved from €-0.09 to €0.26 (£-0.075 to £0.22).
The company estimates that its full-year adjusted EBIT will be significantly higher than its 2023 tally of €342m (£284m).
Earlier this month, the Helsinki-headquartered group announced it would sell around 12% of its 1.4m hectares of forest assets in Sweden, to help cut its debt.
The firm’s Q3 results show a net debt of €3.528bn (£2.9bn), which ballooned from €466m (£388m) in the middle of 2024 thanks to its investments in board production and conversion at its Oulu mill in Finland.
The group, which is one of the world’s largest and oldest owners of private forests, owns a total of around 2.5m hectares.
