Stora Enso reconsiders its plans to build a chemical pulp mill in Beihai, China

Thursday 19. January 2017 - Stora Enso has initiated a process with the Government of Guangxi with the target to remove the authorisation for the hardwood chemical pulp mill from its investment permit. Stora Enso has previously announced that it considers building a chemical pulp mill at its Beihai Mill site, once the consumer board machine is up and running. The final decision is still subject to the decision of Stora Enso’s Board of Directors.

“The market demand for high-quality food packaging board will continue to grow in China and neighbouring Asian markets. Our investment in a consumer board mill in Beihai is ideally placed to serve this market. Meanwhile, the supply-demand of the global pulp market has been negatively impacted by new investments in hardwood pulp production. At the same time, we consider the wood costs to supply the potential chemical pulp mill to be too high, which reduces the competitiveness of such a mill. Therefore, sourcing the chemical pulp to Beihai Mill from the market or utilising our current captive global hardwood supply is a viable option for us,” says Stora Enso’s CEO Karl-Henrik Sundström.

This decision would not affect Stora Enso’s operations at Beihai Mill, which cover the consumer board machine with an annual capacity of 450 000 tonnes, a polyethylene extrusion (PE) coating line and a bleached chemi-thermomechanical pulp (BCTMP) plant. Stora Enso’s current investment permit covers also a second board machine at the site in Beihai, but the group has not made any decisions regarding it.

As a consequence of the change in scope, Stora Enso would decrease the area of its leased forest lands in the Guangxi region. The scope and schedule for the reduction of fibre base will be decided later. The group will keep parts of the plantations to supply raw material for the BCTMP plant. Stora Enso leases currently some 84 000 hectares of forest land in the region.
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