Stora Enso Oyj
NYSE : SEO

Stora Enso Oyj

March 29, 2007 10:00 ET

Stora Enso's New CEO Jouko Karvinen Starts in Office at Today's AGM

HELSINKI, FINLAND--(CCNMatthews - March 29, 2007) - Stora Enso (NYSE: SEO) today announced that Jukka Harmala addresses shareholders after 18 years as CEO.

Jukka Harmala at the AGM:

"In 2006 profits rose as newsprint, uncoated fine paper and wood product prices increased, and we benefited from our internal profit improvement programmes. Profit 2007 and the Asset Performance Review (APR) are concluded ahead of schedule, but the returns are unsatisfactory as increases in energy costs last year and wood costs this year have eaten away a good lot of the benefits," says CEO Jukka Harmala.

"I would like to take this opportunity to thank all personnel, shareholders and the Board of Directors for very stimulating and rewarding years in the industry, and to wish all of you the very best in the future," he concludes.

Stora Enso changes its strategic focus from growth to profitability

ROCE target remains 13%.

Jouko Karvinen at the AGM:

Stora Enso has accelerated its portfolio and strategy review. The key element in the new strategy is that the company will change its focus from growth to profitability. The ROCE target remains 13%.

"We have to make choices and focus on businesses that can earn double-digit returns on capital employed by allocating our resources to them," says new CEO Jouko Karvinen at today's Stora Enso Annual General Meeting.

The management of the company is not planning to initiate a new, specific profit improvement programme. Instead, the new CEO and his team will lead the company on an intensified improvement path. Decisions will be communicated when they have been made instead of announcing single multi-year plans.

"The good news is that the overall global economic situation is relatively healthy. However, that makes the distance to the 13% return on capital target over the cycle that much greater, so we have no time to lose," Karvinen continues.

"A reality for Stora Enso and the European forest products industry is the worsening shortage of wood supply resulting from announced higher Russian export duties, the increasing use of wood fibre as biofuel, and the rising environmental pressures to limit the procurement of wood raw material. As we have announced today, we have agreed not to buy wood from Metsahallitus from disputed areas in northern Finland for now, but there is no way we can produce pulp or sawn goods without sufficient wood supply. Some production curtailments are expected at Enocell Pulp Mill (part of Packaging Boards) in the second quarter of 2007 due to shortage of raw material. We are fast-tracking efforts to find alternative sources of wood - in parallel with initiatives to solve the issues of Russian duties and critical stakeholder dialogue will continue," Karvinen concludes.

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Photos of Jouko Karvinen are available at http://bmt.storaenso.com/storaensolink.jsp?imageid=070329 Please copy the link into your web browser.

Contact Information

  • Jukka Härmälä
    CEO
    tel. +358 2046 21404
    or
    Jouko Karvinen
    CEO
    tel. +358 2046 21404
    or
    Tim Laatsch
    SVP, Communications
    Stora Enso North America
    tel. 715 422 4023