Stora Enso is Planning to Close Its Sauga Sawmill in Estonia

Helsinki, Finland, 07 March 2007 -- Stora Enso is planning to close down Sauga Sawmill in Estonia in June 2007, owing to a continuing shortage of raw material, resulting in higher costs and unprofitable operations. The closure will not have a material impact on Stora Enso's annual sales, but it is expected to have a slightly positive impact on the Group's full year 2007 operating profit. The company will record a write-down and restructuring provision totaling about EUR 12 million as nonrecurring items in the first quarter of 2007.

Sauga sawmill has an annual technical production capacity of 130,000 m3 of sawn wood, of which 90,000 m3 can be further processed. Stora Enso plans to use some of Sauga Sawmill's machinery at its other sawmills, to the extent feasible.

"Stora Enso's production and sales of sawn goods in the Baltic States are expected to remain essentially unchanged after the closure of Sauga sawmill, as customers will be supplied from Stora Enso's other sawmills. Sauga sawmill has 107 employees and Stora Enso Timber is looking at various opportunities for internal redeployment to, for example, Paikuse, Imavere, and Näpi sawmills, and to Viljandi further processing mill. Stora Enso Timber will be able to offer approximately 30 positions. Outplacement to other forest products companies in the Pärnu area and financing of retraining to take up employment outside the forest products industry are also being considered" says Peter Kickinger, executive vice president, Stora Enso Timber.