Stora Enso Expands Wood Supply Chain with New Acquisition
Stora Enso has recently reached an agreement to acquire 100% of the Finnish sawmill company Junnikkala Oy. This strategic move is aimed at ensuring a dependable and cost-efficient wood supply for its packaging board production facility located in Oulu, while simultaneously bolstering its wood products business with additional production capabilities.
Details of the Acquisition
The acquisition transaction has an enterprise value of up to EUR 137 million, with a portion of the payment contingent upon the achievement of production milestones. Subject to standard closing conditions as well as regulatory approvals, the deal is anticipated to finalize within the first half of 2025.
About Junnikkala Oy
Junnikkala Oy is recognized as a prominent Finnish producer of sawn timber and various wood products catering to both domestic consumers and international markets. The company operates a total of three sawmills, including its state-of-the-art facility situated less than 10 kilometers from the Stora Enso site in Oulu.
Benefits to Stora Enso's Oulu Production
The inclusion of Junnikkala's sawmills facilitates significant synergies with Stora Enso's integrated board manufacturing operations in Oulu. The alliance ensures a steady supply of essential raw materials including wood chips, pulpwood, and biomass, which are critical for sustained production at the Oulu facility.
According to Hans Sohlström, President and CEO of Stora Enso, "This acquisition will lay a strong foundation for our wood procurement efforts. It not only enhances operational efficiency but also optimizes our Oulu site and sawmills as a cohesive production unit." This represents a key milestone in preparing for the launch of a newly converted packaging board line.
Increasing Wood Supply and Operational Efficiency
With this acquisition, Stora Enso will significantly boost its annual wood procurement in Finland, increasing the volume by approximately 1.7 million cubic meters. Furthermore, the Group’s total sawmilling capacity is expected to rise by around 700,000 cubic meters, enhancing their sourcing capabilities in the Baltic Rim wood market.
Integrated Value Chain Strategy
The integration of Junnikkala’s operations into Stora Enso's business model aims to reduce costs while improving resource efficiency—especially with regard to the utilization of wood resources. The harvesting operations will continue to generate consistent supplies of sawlogs, pulpwood, and energy wood necessary for the Finnish production sites, ensuring a balanced provision of raw materials.
Future Synergies and Impacts
The full incorporation of Junnikkala's sawmill operations into Stora Enso's Wood Products Division, along with integrating procurement activities into the Forest Division, is projected to yield annual synergies estimated at around EUR 15 million once the new sawmill in Oulu is fully operational. Importantly, this transaction is expected to have no adverse effects on the operations of existing sawmills.
In 2023, Junnikkala's reported sales totaled EUR 115 million, following a revenue of EUR 141 million in 2022. The company boasts a workforce of approximately 230 employees, all of whom are set to transition to Stora Enso.
About Stora Enso
Stora Enso plays a vital role in the global bioeconomy, establishing itself as a leading supplier of renewable products in packaging, biomaterials, and wooden construction. As one of the world’s largest private forest owners, Stora Enso employs around 20,000 individuals. In 2023, the company reported a sales figure of EUR 9.4 billion, with their shares publicly traded on Nasdaq Helsinki Oy (STEAV, STERV) and Nasdaq Stockholm AB (STE A, STE R). They also have a presence in the OTC Markets in the USA, trading as ADRs and ordinary shares.
Contact Information
For further inquiries, please contact:
Carl Norell
SVP Corporate Communications
tel. +46 72 241 0349
Investor Enquiries:
Anna-Lena Åström
SVP Investor Relations
tel. +46 70 210 7691
Frequently Asked Questions
What recent acquisition did Stora Enso announce?
Stora Enso announced the acquisition of Junnikkala Oy, a Finnish sawmill company.
Why is the acquisition of Junnikkala significant for Stora Enso?
This acquisition is crucial for enhancing the wood supply for Stora Enso's Oulu packaging board site while boosting operational efficiencies.
When is the acquisition expected to close?
The acquisition is expected to close in the first half of 2025, subject to regulatory approvals.
What impact will this acquisition have on wood procurement in Finland?
Stora Enso's annual wood procurement in Finland is projected to increase by about 1.7 million cubic meters.
What is the estimated annual synergy from the acquisition?
Once operational, the acquisition is expected to generate approximately EUR 15 million in annual synergies.
