Stora Enso has announced plans to reorganise operations at its Skutskär production unit in Sweden. The proposed restructuring is aimed at strengthening the site’s competitiveness by increasing focus on fluff pulp production while permanently closing softwood pulp production on fibreline 3 (L3).
The company confirmed that change negotiations will begin with union representatives regarding the proposed closure and wider organisational restructuring. The move follows continued pressure on the European softwood pulp market. Demand has weakened since 2023. Prices have also declined steadily across the region.
At the same time, wood procurement costs have risen significantly. These combined pressures have negatively affected profitability at the Skutskär facility. According to the company, fibreline 3 is currently operating at negative margins. Profitability is also expected to remain unsatisfactory in the coming years.
Stora Enso stated that several alternatives had been evaluated before the decision was proposed. However, none of the examined options were considered commercially viable for ensuring long-term competitiveness at the production line.
Timo Tidenberg, Head of Business Unit Skutskär at Stora Enso, said the company had carefully reviewed multiple scenarios to improve the financial performance of fibreline 3. He explained that the focus would now shift towards fluff pulp production on the remaining two lines at the site.
The planned changes are expected to impact a maximum of 80 employees at the Swedish production unit. The closure process is planned for the second half of 2026. Production on fibreline 3 is expected to stop during the third and fourth quarters, subject to the completion of labour negotiations and fulfilment of customer commitments.
Fluff pulp operations at Skutskär will continue without disruption. Further expansion opportunities linked to fluff production are also being investigated by the company. This indicates continued long-term confidence in the specialised pulp segment despite broader market challenges.
The restructuring aligns with Stora Enso’s wider business strategy. The group has increasingly focused on renewable and value-added biomaterial solutions in recent years. Specialised pulp grades, including fluff pulp, are viewed as strategically important products with stronger long-term market potential.
Johanna Hagelberg, Executive Vice President of the Biomaterials Business Area at Stora Enso, stated that the company is shaping its operations to support accelerated growth and increased value creation. She added that the strategy centres on serving demanding customers with specialised pulp products and innovative biomaterials designed for everyday applications.
The Skutskär production unit remains one of the company’s important pulp manufacturing facilities in Sweden. The site primarily produces fluff pulp and paper pulp. Annual production capacity currently stands at approximately 515,000 tonnes.
Around 370 people are employed at the facility. The production unit has a long industrial history dating back to 1895. Over the decades, the site has played a significant role in Sweden’s forestry and pulp manufacturing sector.
The European pulp market has experienced considerable volatility in recent years. Weakening consumer demand, fluctuating energy prices and increasing raw material costs have created difficult conditions for producers. Several pulp manufacturers across Europe have faced margin pressure as operating costs continued to rise.
Softwood pulp producers have been particularly affected. Demand softness in several export markets has contributed to lower pricing levels. Rising wood fibre costs have further reduced profitability for manufacturers dependent on traditional pulp grades.
Industry analysts have noted that producers are increasingly prioritising specialised and higher-margin pulp products. Fluff pulp remains an important material used in hygiene products such as nappies, sanitary products and absorbent medical materials. Demand for these products has remained relatively stable compared with traditional paper pulp applications.
Stora Enso continues to position itself as a global supplier of renewable materials and sustainable packaging solutions. The company has maintained a strong emphasis on replacing fossil-based materials with renewable alternatives sourced from fresh and recycled fibres.
The business operates across several international markets and employs approximately 19,000 people globally. In 2025, the company reported sales of EUR 9.3 billion. Packaging materials and biomaterials remain central to its long-term growth strategy.
The proposed restructuring at Skutskär reflects broader structural shifts taking place within the European pulp and paper sector. Companies are increasingly adapting production portfolios to improve operational efficiency and support future market demand.
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