Stora Enso Increases Loan Facility for China Operations

Helsinki, Finland, 20 June 2006 -- In line with its new growth markets strategy, Stora Enso is focusing on profitable expansion in China by prioritizing local sustainable fiber supply and by targeting investments in the growing markets and product segments.

Stora Enso has today signed a new loan agreement with International Finance Corporation (IFC) increasing its loan facility to USD 300 million. The loan will be used to finance Stora Enso's current operations and future investments in China. The increased facility includes a USD 100 million IFC loan and a USD 200 million B loan syndicated to BNP Paribas, Calyon, Citigroup, The Bank of Tokyo-Mitsubishi UFJ, ING Bank, Nordea, and Skandinaviska Enskilda Banken. The company's first agreement with IFC for a USD 75 million loan was signed in June 2005.

In April 2006 Stora Enso formed a publication paper joint venture with Shandong Huatai Paper. The joint venture's paper machine is planned to have an annual production capacity of up to 200,000 metric tons of super-calendered magazine paper and other publication paper grades based on recovered fiber.

Since 1998 Stora Enso has had a paper mill at Suzhou that currently produces annually 240,000 metric tons of coated fine paper to the Chinese market.

In 2005, Stora Enso increased its plantations in the Guangxi province in southern China to approximately 60,000 hectares through land concession rights and wholly owned plantations.

In March 2006, Stora Enso and the United Nations Development Programme (UNDP) China signed on agreement for co-operation to conserve biodiversity in Guangxi and to improve community well-being.

UNDP carried out an Environmental and Social Impact Assessment (ESIA) of the Guangxi plantations during last year. According to the results of the study, which included scenarios of up to 120,000 ha of plantations, there are no major environmental or social issues that could jeopardise Stora Enso's plantation project. Environmental impacts identified in the study will be managed with Stora Enso's good plantation management practices. In the social dimension, Stora Enso aims to continue and strengthen the engagement with local landholders and communities.

Stora Enso has gained solid experience of implementing environmental and social responsibility during its presence in China. "We aim to maintain good relationships with our stakeholders and to be seen as a first-rate example of how sustainability can be achieved in plantation and mill operations in China," said Markku Pentikäinen, executive vice president, Corporate Technology and Asia Pacific.