Stora Enso to Rebuild Paper Machine at Varkaus Mill

Helsinki, Finland, 28 December 2006 -- Stora Enso is investing EUR 54.8 million in rebuilding fine paper machine 3 (PM 3) at its Varkaus mill in Finland to improve efficiency at the mill and profitability in the Office Paper business area. This project, which will increase mill specialization within the division, is scheduled to be completed in December 2007.

The investment is in line with Stora Enso's fine paper strategy. The Varkaus PM 1, which had an annual capacity of 95,000 metric tons of single-coated fine paper, was closed down in November 2006 as part of Stora Enso's Asset Performance Review. Arrangements for the closure of PM 1 were negotiated locally, which enabled the new investment. The investment will increase the mill's annual production capacity by about 95,000 metric tons, to 315,000 metric tons of uncoated fine paper, but the number of personnel will not increase.

Following the investment, envelope paper production will be transferred from the Veitsiluoto mill to the Varkaus mill, allowing Veitsiluoto mill to specialize in producing document printing paper. Production of writing paper will be transferred from the Varkaus mill to the Imatra mills.

"Varkaus mill is a fully integrated mill located close to good fiber resources. Through this investment we can improve the fine paper mill's future competitiveness and strengthen its position in the division's asset portfolio," said Pekka Laaksonen, SEVP, Stora Enso Fine Paper.

Recent investments in Varkaus Mill include:
- approximately EUR 47 million in rebuilding of the woodhandling department to be completed in September 2007;
- approximately EUR 47 million in a new thermomechanical pulp (TMP) line completed in summer 2004;
- approximately EUR 20 million in sawmill modernization completed in spring 2004.

Stora Enso's Varkaus mill produces fine paper, directory paper, newsprint, and coreboard on three paper machines and one board machine with a total annual capacity of about 620,000 metric tons of paper and board, plus 345,000 m3 of sawn wood products. The mill's annual wood consumption is approximately 2.3 million m3. The mill employs about 1000 people.

Additional information is available at www.storaenso.com/