Stora Enso restructured 1.9 million hectares of its forestlands in Sweden in March 2004. The forests were transferred to Bergvik Skog, a new company owned 43.3% by Stora Enso and 5% by the Group’s partner Korsnäs; the remaining shares are held by institutional investors. Stora Enso has a long-term wood supply contract with Bergvik. This restructuring is part of Stora Enso’s plan to free up capital from non-core assets and increase financial flexibility in order to develop its core businesses of paper, packaging and forest products.

Finnantara plantation

Stora Enso divested its Finnantara plantation in Indonesia because of its declining importance following approval of the Veracel pulp mill project in Brazil and establishment of plantations in Southern China. Veracel, with its superb location close to a port in Brazil, will easily be able to supply fibre worldwide, whereas the Chinese fibre project is targeted at local markets.

Veracel

Stora Enso’s 900 000 tonnes Veracel pulp mill joint venture in Brazil is on schedule. The start-up is due by mid 2005 and the mill will provide 450 000 tonnes per year of cost-efficient short-fibre pulp for Stora Enso’s internal use. The pulp will be utilised in China, North America and Europe.

Veracel Mill with its fast-growing eucalyptus plantations is important to Stora Enso’s fibre strategy of reducing the cost of fibre. Stora Enso intends to secure and utilise increasing amounts of long fibre from Eastern Europe and short fibre from fast-growing plantations in the Southern Hemisphere.