Stora Enso has decided to discontinue the divestment process for its Beihai packaging board production site and forestry business, announced in December 2022. Stora Enso is of the view that the value in own use of the assets exceeds the achievable transaction value, and has therefore chosen to retain these operations within the Group.
Stora Enso’s strategic ambition is to build on its global leading position in the fiber-based packaging market. The business of the Beihai site will be developed through a continued focus on operational excellence, cost optimisation, and product development. By adjusting the product mix to increase the share of liquid packaging board and other premium grades, the Beihai site will strengthen Stora Enso’s leading position as a global supplier. No significant capital expenditure is expected in the mid-term.
The Group’s other liquid packaging board production sites include Imatra, Finland and Skoghall, Sweden, which together with Beihai, cater for major global customers while also serving local customers with high-quality products.
“Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business. We are confident that Stora Enso is the 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,” says Stora Enso’s President and CEO Hans Sohlström.
Stora Enso owns approximately 80% of the Beihai production site and forest operations, its local partners and International Finance Corporation (IFC) remain owners of the balance.
The Beihai site was classified as assets held for sale from the end of 2023. As at the end of September 2024, such classification has been ceased. Adjusted EBIT and IFRS operating result for Q1 to Q3/2024 will decrease by EUR 7.5 million per each quarter, EUR 30 million for the full year 2024, due to the inclusion of previously suspended depreciation into the restated results. Additionally, asset held for sale classification in balance sheet will be restated. There are no cash flow impacts as a result of the restatements.