Stora Enso Oyj: SWOT Analysis & Company Profile

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					Stora Enso Oyj

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Stora Enso Oyj: SWOT Analysis &
Company Profile


Reference code: BRPK0077CP10-Q2

Published: Nov 2010




Business Review
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Stora Enso Oyj - SWOT Profile                                                       Page 1
Stora Enso Oyj

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Stora Enso Oyj - Company Overview

Stora Enso Oyj (Stora) is a manufacturer and distributor of paper, packaging and forest products. It is engaged in the
production of magazine paper, fine paper, newsprint and book paper, consumer board, industrial packaging and wood
products. It also offers consumer packaging boards and sawn softwood. Recently, Stora disposed its merchant business,
Papurus. Its customers include publishers, printing houses and merchants, and the packaging, joinery and construction
industries. Currently, the company has 88 manufacturing facilities located in more than 35 countries. Geographically, the
company operates in Europe, North America, Latin America and Asia. Stora is headquartered in Helsinki, Finland.


Financial Performance

The company reported revenue of EUR 8945.1 million during the fiscal year ended 2009. The company's revenue
declined at a compounded rate of 13.11% during the period 2007-2009 with a year on year decline of 18.89% over fiscal
year 2008. During the fiscal year 2009 its operating margin was -6.79% as against the operating margin of -6.59% in fiscal
year 2008. During the fiscal year 2009 the company registered a net profit margin of -9.83% as against the net margin of -
6.11% in the fiscal year 2008.




Stora Enso Oyj - Key Facts

Stora Enso Oyj, Key Facts

                                  Kanavaranta 1, Helsinki, , 00101,                                STEAV (Helsinki Stock
                                                                      Ticker Symbol, Stock
Corporate Address:                                                                                 Exchange)STERV (Helsinki
                                  Finland                             Exchange                     Stock Exchange)



Telephone                         + 358 20 46131                      No. of Employees             27,785



Fax                               + 358 20 4621471                    Financial Year End           December



URL                               www.storaenso.com                   Revenue (in EUR Million)     8,945.10


                                  Alternative Energy , Paper and
Industry                                                              Revenue (in USD Million)     12,423.75
                                  Packaging


Locations                         Finland, Latvia, Lithuania, Poland, Russian Federation, Sweden

Source: Annual Report, Company Website, Primary and Secondary Research




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Stora Enso Oyj - SWOT Profile                                                                                           Page 2
Stora Enso Oyj

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Stora Enso Oyj - Business Description

Stora Enso Oyj (Stora) is a paper, packaging and forest products company. It produces magazine paper, fine paper,
newsprint and book paper, consumer board, industrial packaging and wood products. It also offers consumer packaging
boards and sawn softwood. It employs 27,785 people.

The company operates its business in seven segments namely Newsprint and Book Paper, Magazine Paper, Fine Paper,
Consumer Board, Industrial Packaging, Wood Products and Others. Under the Publication Paper division, Stora includes
both the Newsprint and Book Paper and Magazine Paper reportable segments.

The Newsprint and Book Paper division is engaged in producing newsprint and directory and book paper for publishers
and printing houses. It produces standard newsprint, improved newsprint, and directory and book paper in eight mills in
Europe and North America. Its book and directory paper range includes paper for hardback and paperback books,
telephone directories and timetables. During the fiscal year 2009, the segment contributed 12% towards the total
revenues of the company, generating EUR 1,325.8 million, a decrease of 17% over the previous year.

The Magazine Paper segment offers coated and uncoated magazine paper. It is engaged in providing a wide range of
paper for magazines, advertising and other periodical applications to publishers, printing houses and retailers. These
products are used for newspapers, magazines, catalogues and direct mail. During the fiscal year 2009, the segment
contributed 15% towards the total revenues of the company, generating EUR 1,676 million, a decrease of 23.01% over
the previous year.

The Fine Paper segment manufactures coated fine paper. It specializes in offering Graphic (Coated Fine) Paper and
Office (Uncoated Fine) Paper. The Graphic paper range includes multicoated paper for art books, annual reports and
luxury magazines, coated paper for magazines, catalogues and brochures, and uncoated graphic paper for stationery and
manuals. The company’s Office Paper is available in various grades that are extensively used in digital printing,
envelopes, notebooks, note pads and other business forms. During the fiscal year 2009, the segment contributed 17%
towards the total revenues of the company, generating EUR 1,823.9 million, a decrease of 14% over the previous year.

Whereas the company’s Packaging division comprises of two reportable segments, includes Consumer Board and
Industrial Packaging. The Consumer Board segment specializes in producing liquid packaging board, food service board,
graphical board and carton board for use in packaging food, beverages, cigarettes, pharmaceuticals, media products,
household products, cosmetics and luxury items. It produces materials for packaging applications, including consumer
packaging boards, graphical boards, containerboards and corrugated boxes, specialty papers for packaging, industrial
papers for laminating industry, core boards, and cores. During the fiscal year 2009, the segment contributed 17% towards
the total revenues of the company, generating EUR 1,895.9 million, a decrease of 15.05% over the previous year.

The company’s Industrial Packaging segment produces corrugated packaging, containerboard, cores and core board,
laminating paper, paper sacks, and sack and craft paper. Its subsidiary, Corenso United also produces cores and core
board, used by manufacturers of paper and board, textile yarn, plastic film and flexible packaging. During the fiscal year
2009, the segment contributed 8% towards the total revenues of the company, generating EUR 815.5 million, a decrease
of 24.24% over the previous year.

The Wood Products segment provides product and service solutions to wood product industries. It also offers sawn
softwood products and processed wood products to timber retailers, merchants and importer-distributors, and provides
raw materials to the pulp and panel industries and the energy sector. In Mar 2010, the company planned to invest EUR 5
million for the three Wood Products development projects namely, Uimaharju, Finland; Bad St. Leonhard, Austria and Ala,
Sweden. Later, in May, Stora signed a contract to acquire a 19.46% shareholding in the Finnish wood processor Arktos
Group as to maximize its Wood Products portfolio. During the fiscal year 2009, the segment contributed 11% towards the
total revenues of the company, generating EUR 1,239.6 million, a decrease of 18% over the previous year.

Others segment consists of market services, such as sales network and logistics services. Moreover, in 2010, Stora
planned to expand its solid bio fuels business through the investment of EUR 10 million at Imavere Sawmill in Estonia for
pellet production. During the fiscal year 2009, this Others segment contributed 20% towards the total revenues of the
company, generating EUR 2,175.2 million, a decrease of 39.35% over the previous year.

In October 2010, Stora Stora Enso has entered into an agreement to acquire 51% stake of the Chinese packaging
company Inpac International. It also planned to close down its newsprint machine of capacity 195,000 tons per year in
Maxau Mill, Germany and its newsprint and directory paper production in Varkaus, Finland. Prior to this, in August 2010,
the company’s subsidiary Stora Enso Baienfurt GmbH has agreed to divest its Baienfurt mill site real estate in Germany to
the IGV Industrie- und Gewerbeverwaltungs GmbH, a subsidiary of the Lower Bavarian Karl- Gruppe. Later, Stora has
divested its integrated mills in Kotka, Finland and also it’s laminating paper operations in Malaysia to OpenGate Capital
for EUR 24 million.

Furthermore in 2010, Stora has entered into a loan agreement with the European Investment Bank for a loan amount of
EUR 230 million as to enhance its research and development functions. The company decided to utilize a part of loan that
is EUR 65 million for the construction of Ostroleka power plant project in Poland. In Fe
				
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