Stora Ensos senior executive vice president for publication papers Bernd Rettig said the restructuring would enable the Swedish/Finnish company to grow in capacity and retain its long-term competitiveness.

The new paper machine will be built at the groups Kvarnsveden mill in Sweden, with the total investment estimated at 314m. Start-up is expected to be at the end of 2005 when PM9 at the same mill, which produces 130,000 tonnes of improved newsprint, will be shut down.

At the same time, PM3 at Langerbrugge mill in Belgium, which produces 165,000 tonnes of super calendered (SC) paper, will switch to producing SC-B paper while PM6 at the Maxau mill in Germany, which produces SC-B paper, will also be rebuilt.

The group will cease non-competitive production of SC paper on PM5 at its Wolfsheck mill in Germany when the new machine at Kvarnsveden mill starts-up.

A 147m investment project for 2005 is also planned at the Skoghall mill in Sweden. This includes a new recovery boiler area, evaporation plant and conversion of an oil boiler into a biofuel boiler.