Stora Enso has announced its decision to discontinue the divestment process of its Beihai packaging board production site and forestry business in China.
The company initially sought to sell the site in December 2022, but after extensive review and negotiations, Stora Enso has concluded that retaining the operations is more valuable than any potential sale.
The decision comes as part of Stora Enso’s broader strategy to strengthen its position as a leader in the fiber-based packaging market. The Beihai site will now undergo development with a focus on operational excellence, cost optimization, and product innovation. One of the key initiatives will be to shift the product mix towards more liquid packaging board and other premium grades, bolstering Stora Enso’s role as a global supplier.
Hans Sohlström, Stora Enso’s President and CEO, explained the decision: "Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business. Given the recent global cost escalation of wood and logistics, the relative cost competitiveness of the Beihai site has improved."
The Beihai facility is critical to Stora Enso’s global operations, producing high-quality liquid packaging board for major customers in the Asia Pacific region. It complements the company’s other production sites in Imatra, Finland, and Skoghall, Sweden, which also cater to both global and local markets. Despite the change in plans, Stora Enso has stated that no major capital expenditures are expected for Beihai in the mid-term.
Stora Enso’s Beihai site was previously classified as an asset held for sale, but this classification has now been reversed, impacting financial reporting. For the first three quarters of 2024, adjusted EBIT and IFRS operating results will decrease by EUR 7.5 million per quarter, or EUR 30 million for the year, due to the reinstatement of previously suspended depreciation. However, there will be no impact on the company's cash flow as a result of these changes.
Stora Enso, known for its commitment to renewable and sustainable products, continues to be a major player in the global bioeconomy. With approximately 20,000 employees and 2023 sales reaching EUR 9.4 billion, the company’s strategic focus on renewable packaging solutions aligns with the growing demand for sustainable materials worldwide. For more information, visit storaenso.com.