<a href=Stora Enso” height=”200″ src=”https://www.packaging-gateway.com/wp-content/uploads/image-digitalinsightresearch/Archive/Main/Stora_corrugated.jpg” style=”padding: 10px” width=”200″ />

Finnish pulp and paper manufacturer Stora Enso is planning to cease operations at its corrugated packaging converting unit in Chennai, India.

This follows unprofitability and a major decrease in local market demand.

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The facility in Chennai has been operating as a part of Stora Enso since July 2011, following the company’s acquisition of 51% of stake in Inpac International in China.

Inpac International operates production facilities in China and India valued at €80m ($115m). Its main production plants are at Qian’an in northern China and Dongguan in southern China, in addition to the one being closed.

With 350 employees, the facility produces transport and consumer packaging made of corrugated board for sale primarily in Chennai and Tamil Nadu region.

"The facility produces transport and consumer packaging made of corrugated board for sale primarily in Chennai and Tamil Nadu region."

Stora Enso will negotiate with the mill employees regarding the closure. The employees will receive compensation and other support, including training, medical care and assistance in finding new employment, the company said.

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Stora Enso is expected to lose €8m in operating profit in the second quarter of 2015 with the closure. However, it will not have a material impact on Stora Enso’s sales and operational EBIT.

In May, Stora Enso bought Metso’s valves to convert its Varkaus Mill fine paper machine to lightweight containerboard. Upon completion of the upgrade, the containerboard machine will begin operations in the fourth quarter of 2015.

The financial terms of the order have not been disclosed.

Image: The Chennai facility produces transport and consumer packaging made of corrugated board. Photo: courtesy of nuttakit via FreeDigitalPhotos.net.