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A Profit Enhancement Plan has been
launched in Stora Enso’s North American operations
to improve the division’s results and competitiveness.
North America has been suffering from poor market
conditions since the end of 2000. To reflect the
current market value of the North American assets
acquired that year, management decided to take
a one-time impairment charge of EUR 1 167
million (USD 1 081 million), which was booked
in the third quarter of 2002.
Content of the Plan
The aims of the Profit Enhancement Plan are to focus
increasingly on core assets, to improve competitiveness
in coated groundwood and fine papers and to secure
competitive pulp for North American operations. The
organisation has been streamlined to match the requirements
and targets of the North American division. Since
the North American acquisition, the workforce has
been reduced from 7 294 to 6 156 and will
be further reduced by approximately five hundred.
Synergies from the acquisition
In 2002 North American operations achieved synergies
of USD 91 million. The initial synergy target for
the year, USD 110 million, was not met because the
capacity utilisation rate was lower during the first
half of the year and prices were lower than when the
target was set in 2000.
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