HELSINKI (News release) -- Stora Enso announced that it has signed a letter of intent to divest the Kvarnsveden site in Sweden to Northvolt. Due to structural decline in demand for graphical paper, in April 2021 Stora Enso announced a plan to close its Kvarnsveden paper production site. Founded in 1900, Kvarnsveden produced pulp and paper for over 120 years until production ended in September 2021.

Northvolt is a European supplier of sustainable battery cells and will develop the site into a battery manufacturing plant, reusing and refurbishing the existing facilities and site infrastructure. According to Northvolt, the gigafactory is expected to start the first part of its operations in late 2024, and will employ up to 1,000 people.

"Sustainability is the main priority for Stora Enso, and this also has to be addressed in difficult times. Hence, a key focus since our decision to close the site has been to find a new owner that can continue Stora Enso's long and sustainability-driven legacy at Kvarnsveden, to the benefit of the local society. Like Stora Enso, Northvolt delivers modern and innovative solutions that contribute to a climate-friendly future. Through this agreement, Kvarnsveden will become a foundation for continued growth, both for Northvolt and the city of Borlänge," says Per Lyrvall, Sweden country manager at Stora Enso.

The Kvarnsveden site has many advantages including availability of skilled workforce as well as a railway link, a connection to the national electricity grid, and the availability of clean water. According to Northvolt, the site will be powered using 100 percent clean energy, and will feature both cathode material and cell production.

Peter Carlsson, Co-Founder and CEO of Northvolt, comments: "Since Northvolt was founded, we have focused on circular battery production, but this is the first time we are reusing an entire production site. With its access to energy, industrial water and the broad production know-how in the region, Kvarnsveden is an optimal site for a gigafactory. We are thrilled to be able to open a new chapter in Borlänge's history as a global industrial hub."

The final agreement regarding the transaction is expected to be signed in the next few months. Certain infrastructure and equipment, including the boiler, are subject to separate processes and are not included in the Northvolt scope. The transaction impact on Stora Enso's operational EBIT or net debt is not considered material.