Finnish forest industry giant Stora Enso is starting co-operation negotiations with plans to close its Veitsiluoto paper and pulp factory in Kemi, northern Finland. The factory employs around 700 people, and the closure would cause a lay-off of 670 employees, planned in the third quarter of 2021. The Veitsiluoto sawmill, that employs 50 people, is unaffected by the co-operation negotiations.
According to the CEO of Stora Enso, the restructuring is determined by a drop in demand for paper, further negatively impacted by the COVID-19 pandemic. The CEO also points out that currently there is an overproduction of paper in Europe, corresponding to 15 paper machines being redundant. The Finnish government has announced support measures for the region and for those affected by the closure. The Paperworker’s Union also calls for the responsibility of Stora Enso and the government to explore other economic opportunities to fill in the jobs' gap the closure of the factory would cause for the region.
The closure of the Veitsiluoto factory would be the biggest singular forest-industry closure in Finnish history. Due to the important role of the factory for the regional economy, the cascade effects on employment are expected to be significant, affecting thousands of jobs in the region.
Stora Enso is a Finnish-based multinational company with over €8.6 billion sales in 2020 and around 23,000 employees worldwide. After the closure of the Veitsiluoto paper and pulp factory, Stora Enso will have 5,600 employees in Finland. The company’s operations in Finland have undergone heavy restructuring in the recent years, the latest being in 2019. In addition to the Veitsiluoto paper and pulp factory, Stora Enso also plans the closure of the Kvarnsteden factory in Sweden, where hundreds of employees will be affected.
Updated, 17/06/2021: Stora Enso has concluded its co-operation negotiations. The company will close down the pulp and paper production at its Veitsiluoto site in Finland, leading to a reduction of 550 job positions. Of these employees, 440 work in the paper division and 110 at the maintenance company Efora. According to the company, approximately 28% of the redundancies can be managed through pension agreements. Originally the plan was to cut of 670 job positions.
The company has decided to permanently close down three paper machines, groundwood production, chemical pulp, as well as the sheeting plant. The sawmill will continue operating at the site within the Wood Products division with a capacity to employ around 50 persons. A maximum of 21 people in Efora’s engineering business unit in Veitsiluoto will be transferred to the engineering company Etteplan.
Stora Enso announces that they will work closely together with its other company locations, the City of Kemi and other stakeholders in order to support re-employment and re-training. The redundancies will mostly take place by the end of January 2022.