Stora Enso has ended its plan to divest the Beihai packaging board production site and forestry operations in China.
The company announced the sale process of these operations in December 2022 as it aims to focus in the fibre-based packaging market.
Stora Enso opted to retain the businesses as it believes that the intrinsic value of retaining and utilising these assets surpasses the potential proceeds from a sale.
To this end, the Beihai site will undergo development focusing on operational efficiency, cost reduction, and product innovation.
Plans for the facility include altering its product range to boost the production of liquid packaging boards and other high-value products.
This strategy aims to reinforce Stora Enso’s status as a worldwide supplier without necessitating significant capital investment in the near future.
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By GlobalData
The company operates additional liquid packaging board production facilities in Imatra, Finland, and Skoghall, Sweden.
These sites, along with Beihai, supply a mix of major international and local customers with premium quality products.
Stora Enso president and CEO Hans Sohlström said: “Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business.
“We are confident that Stora Enso is the best positioned to continue operating this site going forward. Given the recent global cost escalation of wood and logistics, the relative cost competitiveness of the Beihai site has improved. Through the Beihai site, we will continue to serve our global and most demanding customers with premium packaging board in the Asia Pacific region.”
Stora Enso holds an approximately 80% stake in the Beihai production site and forest operations, with the remaining held by local partners and international finance corporations.
In July this year, the company announced a €30m ($32.52m) investment to enhance its Ostrołęka corrugated packaging production in Poland.
