In other Stora Enso news.

IN OTHER STORA ENSO NEWS:

* The company is also merging its North American division into its global product divisions in order to improve its operations, effective September 1, 2005. The North American business areas will become part of the global product divisions, integrating them as follows:

--Coated Magazine Paper, Uncoated Magazine Paper and Newsprint into Stora Enso Publication Paper;

--Fine Paper into Stora Enso Fine Paper;

--Specialty Papers into Stora Enso Packaging Boards;

--North American marketing and sales into Market Services.

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* North American operations will no longer be regarded as a division of the company, so financial figures for the North American operations will not be reported separately twice per year as is the current practice. The company said its North American Profit Enhancement Program is reaching its end, which is a contributing factor for the change.

* Stora Enso has also finalized its previously announced acquisition of 100% of the shares in the German paper merchant Schneidersohne Group. The all-cash acquisition was completed following approval by regulatory and competition authorities. The acquisition price on a debt- free basis was EUR 450 million (US$ 549 million). Synergies will be achieved by optimizing the value chain from producer to end-user and efficiently coordinating operations within Stora Enso's merchant business, Papyrus.

* The strategic aims of the acquisition are to bring Stora Enso closer to the customer and end-user in the value chain and to improve the profitability of Stora Enso's merchant business. Schneidersohne will become part of Papyrus. Through Papyrus Stora Enso will gain full management control of the company and it will be fully consolidated from July 2005 onwards.

* The company's Oulu Mill in Finland has received the first shipment, 4000 metric tons of eucalyptus short-fiber pulp, from Veracel Pulp Mill, Eunapolis, Brazil. Veracel Pulp Mill, a joint venture between Stora Enso and Aracruz Celulose, started production of low-cost, high-quality eucalyptus pulp in May 2005. Shipments to Stora Enso's mills in China and Europe began in July 2005. The mill's annual capacity is 900,000 metric tons.

* The company has signed a letter of intent to start a joint venture with board producer Foshan Huaxin Packaging Co., Ltd., China. The final agreement establishing the venture, in which Stora Enso will have a clear majority shareholding, is expected to be signed during the fourth quarter of 2005. Foshan Huaxin has begun investing US$ 160 million in building a white lined chipboard (WLC) machine with an annual production capacity of 250,000 metric tons. Through the venture, Stora Enso plans to change the scope of the investment by modifying the machine to manufacture primary-fiber-based products such as liquid packaging boards, cup stock, cigarette boards, and other carton boards at an estimated additional cost of US$ 90 million. The machine, the first producer of liquid packaging board for aseptic end uses in China, will be completed during the second half of 2006.

* The company has agreed to divest its 18.8% ownership of Advance Agro Public Co. Ltd., Thailand to private investors based in Hong Kong for US$ 80 million. The transaction is structured with installment payments, the last of which is expected to be received no later than the third quarter of 2006. Stora Enso acquired the minority shareholding in Advance Agro in 1998 in order to develop business in Thailand. Since then the emphasis in Stora Enso's fiber strategy has shifted to South America and China, which the company has identified as two of the three main emerging strategy areas, the third being Russia.

* Stora Enso has also begun investigations into the feasibility of divesting its fine paper mill at Grycksbo, Sweden, as the group focuses its coated fine paper business on multi-coated graphical grades. Stora Enso is seeking a buyer with a product portfolio for which the mill's matte-coated fine papers would be a better fit, and which would be interested in developing the mill's business in the long term. Grycksbo Mill has three paper machines producing on-machine coated fine papers with a total annual capacity of 280,000 metric tons. Its customers are mainly in Western and Northern Europe. The mill has a strong market position in its paper segment. Grycksbo Mill's production and commercial operations will continue as usual while a new owner is sought for the mill.

ABOUT THE AUTHOR

The WorldWatch section in Solutions! magazine is written by Sara M. Scharpf, a writer based in Oshkosh, Wisconsin, USA. Contact her by email at [e-mail].