HELSINKI, Finland, Jan. 5, 2006 (PRIMEZONE) -- Stora Enso (NYSE:SEO) today announced that after detailed due diligence process, Stora Enso has decided to withdraw from the previously announced project in consumer board production in China. A letter of intent to start a joint venture with Chinese Foshan Huaxin Packaging Co., Ltd. was signed in August 2005.
The decision to withdraw was taken after the due diligence process revealed that the project would not meet the profitability expectations set by Stora Enso because technical modification of the machine would be more challenging than initially estimated. The total cost of due diligence and withdrawal from the project is not material for Stora Enso.
The focus in China is now on developing the previously announced plantation project in Guangxi and publication paper feasibility study in Shandong. Stora Enso is exploring other possibilities of liquid packaging board production for the Chinese market.
Previous press releases concerning Stora Enso in China are available at www.storaenso.com/press:
-- 10 November 2005: Stora Enso strengthens its presence in Guangxi
-- 28 October 2005: Stora Enso signs joint-venture agreement with
Foshan Huaxin Packaging
-- 11 August 2005: Stora Enso to start liquid packaging board
production in joint venture in China
-- 10 June 2005: Stora Enso signs loan agreement with International
Financing Corporation
-- 31 March 2005: UNDP to Assess Environment and Social Impact of a
Forestry Investment Project in Guangxi, China
-- 28 October 2004: Stora Enso joint venture in China
-- 4 February 2004: Stora Enso to modernise its fine paper machine
at Suzhou, China
Stora Enso is an integrated paper, packaging and forest products company producing publication and fine papers, packaging boards and wood products, areas in which the Group is a global market leader. Stora Enso sales totaled EUR 12.4 billion in 2004. The Group has some 45,000 employees in more than 40 countries in five continents and an annual production capacity of 16.4 million tonnes of paper and board and 7.7 million cubic metres of sawn wood products, including 3.2 million cubic metres of value-added products. Stora Enso's shares are listed in Helsinki, Stockholm and New York. Stora Enso Oyj Business ID 1039050-8.