Stora Enso

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Stora Enso Oyj
Type Julkinen osakeyhtiö
Traded as OMXSTERV
OTCQXSEOAY
Industry Paper and packaging
Founded 1998 (1347)
Headquarters Helsinki, Finland
Key people Gunnar Brock (Chairman), Jouko Karvinen (President and CEO)
Products Publication and fine paper, packaging board, and wood products
Revenue €10.96 billion (2011)[1]
Operating income €759,3 million (2011)[1]
Profit €342.2 million (2011)[1]
Total assets €13.00 billion (end 2011)[1]
Total equity €5.960 billion (end 2011)[1]
Employees 27,958 (end 2011)[1]
Website www.storaenso.com
1/8 share of the Stora Kopparberg mine, dated June 16, 1288.

Stora Enso Oyj is a Finnish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Stora and Finnish forestry products company Enso-Gutzeit Oy in 1998. It is headquartered in Helsinki, and it has approximately 29,000 employees. Following the merger, English became the lingua franca of the company, with implications for the effectiveness of internal business communications.[2] In 2002 it was the fifth largest pulp and paper manufacturer in terms of revenue and in 2005 it was the world's largest pulp and paper manufacturer in terms of production capacity. Solidium (The Finnish state fund) is the biggest owner in the company. The Wallenberg family through their foundation asset management company FAM is the second biggest shareholder in the company.

History[edit]

Stora Enso was formed by the merger of Swedish mining and forestry products company Stora and Finnish forestry products company Enso-Gutzeit Oy in 1998. In line with this, Stora Enso expanded its operations by acquiring wood products businesses and bought paper merchant businesses in Europe. In 2000 the company bought Consolidated Papers in North America. Stora Enso also slowly expanded its operations in South America, Asia and Russia.

In recent years the company has gone through heavy restructuring. The North American operations were divested in 2007 to NewPage Corporation. Stora Enso has sold and closed down some of its mills in Finland, Sweden and Germany.

In September 2012, Stora Enso signed an agreement with Packages Ltd., the largest packaging company of Pakistan, to set up a joint venture named Bulleh Shah Packaging (Pvt.) Ltd. at Kasur, Pakistan.

History of Stora[edit]

The Swedish copper mining company Stora Kopparberg ("great copper mountain") in Falun was granted a charter from King Magnus IV of Sweden in 1347, although the first share in the company (granting the Bishop of Västerås 12.5% ownership) dates from 1288. Some claim this to be the oldest existing corporation or limited liability company in the world.[3]

Stora Kopparbergs Bergslags AB was incorporated as a modern shareholder company in 1862. Towards the end of the 19th century, it diversified from copper mining and entered pulp and paper production. In 1984 it shortened its name to Stora AB. The copper mine closed down in 1992. In 1998, it merged with Enso to form Stora Enso.

In 1997, the year before the merger, Stora had 20,400 employees and a turnover of 44.5 billion SEK. The company owned 2.3 million hectares of forest of which 1.6 million hectares (an area larger than Connecticut) in Sweden and the rest in Canada, Portugal and Brazil. It also produced 7.5 TWh of mostly hydroelectric power.

History of Enso[edit]

Enso-Gutzeit Headquarters, designed by Alvar Aalto, 1962

Headquarter in the port of Helsinki, 2011

Enso-Gutzeit Oy was founded in the 19th century in Norway as W. Gutzeit & Co. by Wilhelm Gutzeit, the half-brother of industrialist Benjamin Wegner. His son Hans Gutzeit moved the company to Finland, where it became the largest forestry company in the country.

Enso-Gutzeit Osakeyhtiö bought A. Ahlström Osakeyhtiö’s forest industries at Varkaus in December 1986. In 1995 a decision was made to merge two state owned forest giants together. The merger materialized next year when Enso-Gutzeit Oy and North Finland based Veitsiluoto Oy formed Enso Oy.

In 2000, the company acquired the U.S. company Consolidated Paper. In the same year, Stora Enso and AssiDomän formed a joint company, Billerud AB, to produce packaging paper.

Consolidated Paper[edit]

In 2000, StoraEnso acquired the North American pulp & paper manufacturer Consolidated Paper for an enterprise value of roughly EUR 4.9 billion. [1] The acquisition has, in hindsight, been noted in the financial press as a massive value destroyer. A post mortem report on the acquisition was published in 2010. [2]

Kemijärvi[edit]

In 2008 Stora Enso expected a shortage of raw material as a result of Russia increasing export tariffs in order to promote foreign mill investments, and in response closed the Kemijärvi paper plant. In the event, however, Russia became a member of the WTO, and the tariff increase was reversed. A campaign resisted closure of the Kemijärvi paper plant, and Stora Enso agreed that Arctos Group (Anaika) would take the operation on as a going concern, with €5.4 million of support from Finnish tax payers. Arctos ceased operations there in January 2012. Minister Jyri Häkämies (conservative) was acquittance with Arctos chairman of the board. People deny its influence on the state financial support.[clarification needed][4]

Stora Enso applied right to not purify its waste bond in use during the pulp and paper mill operation in Kemijärvi. The Supreme Administrative Court of Finland (Finnish: korkein hallinto-oikeus, Swedish: högsta förvaltningsdomstolen) denied this right in August 2013.[5]

South America[edit]

Veracel is a joint venture of Stora Enso and Aracruz in Brazil.

Financial crimes[edit]

Cartel[edit]

Metsä Group and Stora Enso received a sentence in value of €500,000 cartel in year 2001.[6]

Accusations of wrongful accounting[edit]

The North American part of the group was sold in 2007 to NewPage Corporation with a net loss of about 4.12 billion dollars. To cover the loss, it has been accused by some that the accounting was manipulated, which was revealed in 2010.[7] The program also claims that huge dividend payments were made illegally and top management was aware of that fact and on purpose manipulated numbers to be able to pay dividends.

Environmental concerns[edit]

Eucalyptus cultivation of Stora Enso has been discussed critically.[8]

Human right concerns[edit]

The Swedish program “kalla fakta” reported in 2014 that Stora Enso uses child labor in its activities in Pakistan, and that the company has been aware of it since 2012.[9] In response, the company denied that child labor exists directly in the operations of its joint venture partner in Pakistan, but admitted that it was present in its supplier networks. It stated that its partner, Bulleh Shah Packaging, is taking short-term action to remedy the situation in areas where child labor is known to exist, and is also working to mitigate child labour in the long term by addressing its root causes.[10]

Gerard Goodwyn, the company’s head of accounting who spoke publicly about the accounting mistake, was fired in 2010.[11]

Headquarters[edit]

Alvar Aalto planned Stora-Enso Headquarters in Helsinki (Enso Gutzeit Oy main office). In use since 1961. In 2008 Stora-Enso informed the aim to sell the main office building to German Deka Immobilien GmbH with €30 million (€2 million win in 2008 finance). Stora Enso rented to building from WestInvest InterSelectil (part of Deka Group). Stora Enso expected to get new construction land from Helsinki city in future.[12]

See also[edit]

References[edit]

  1. ^ a b c d e f "Annual Results 2011". Stora Enso. Retrieved 8 February 2011. 
  2. ^ Kankaanranta, Anne (2006). Business Communication Quarterly 69 (2): 216. 
  3. ^ "Can a company live forever?". BBC News. January 19, 2012. 
  4. ^ Valtion rahoittama liimapuutehdas pysähtyi 24.1.2012 B3
  5. ^ KHO hylkäsi Stora Enson valituksen - Kemijärven jätealtaan puhdistus selvitettävä yle 28.8.2013
  6. ^ Asfalttikartelli kohta tuomilla, Talouselämä 9.6.2006 s. 10 (Finland’s Talouselämä newspaper)
  7. ^ Dokument inifrån, Dubbel bokföring, 2013-05-16
  8. ^ Stora Enso etelän eukalyptusmailla Finnwatch 2009
  9. ^ Stora Enso kände till barnarbet Dagens Nyheter 2014-03-09 (Swedish)
  10. ^ "Mitigating Child Labour in Pakistan". Stora Enso. March 2014. Retrieved 2014-04-10. 
  11. ^ Stora Enso: Accounting mistake was "human error"
  12. ^ Stora Enso myy pääkonttorinsa, Arvopaperi 9.6.2008


External links[edit]