SWEDEN -- Stora Enso will start co-determination negotiations with employees at its Kvarnsveden mill in Sweden regarding a plan to reorganize the mill, including a permanent closure of paper machine (PM) 8. The planned actions would affect a maximum of 140 employees.

The paper machine has an annual capacity of 100,000 tonnes of super-calendered uncoated magazine paper (SC) and it is planned to be shut down by the end of the second quarter of 2017.

The plan would result in annual cost savings of Euro 12 million. Stora Enso will book restructuring charges of approximately Euro 17 million as an item affecting comparability (IAC) in its 1Q 2017 results, of which about Euro 14 million will be cash costs. The planned closure would not have material impact on Stora Enso's sales or operational EBIT.

The closure of PM8 at Kvarnsveden Mill would not impact Stora Enso's SC paper offering. In Europe, Stora Enso continues to produce SC paper at Kvarnsveden Mill PM12 as well at Maxau Mill in Germany and Langerbrugge Mill in Belgium. The group also serves its SC customers from Dawang Mill in China.

No decisions regarding the planned reorganisation or employee impact will be taken until the co-determination negotiations have been concluded. Production at Kvarnsveden Mill would continue on two lines, PM10 for improved newsprint paper and PM12 for SC papers.

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