Stora Enso announced in August 2009 that it planned to close down the Varkaus mill site in Finland permanently by the end of 2010 unless there were a robust recovery in the supply and demand balance for office paper that would allow clearly profitable operation. Since then, the supply and demand balance and pricing of office paper have improved. Stora Enso is therefore able to keep the pulp mill and fine paper mill in production as long as financially viable and there is competitive fibre available for the Group in the long term. The operations of the sawmill and the biofuel joint venture with Neste Oil, NSE Biofuels Oy, and its demonstration plant will also continue.
At the same time, the situation in newsprint has dramatically deteriorated. Because of the overcapacity in newsprint and directory paper, and resulting weak earnings, Stora Enso plans permanently to close down newsprint production at Varkaus with combined annual capacity of 290,000 tonnes, by the end of the third quarter of 2010.