Renewable products company Stora Enso has agreed to acquire Finnish sawmill company Junnikkala to secure raw materials for its packaging board site in Oulu, Finland.  

The agreement will see Stora Enso taking over 100% of Junnikkala for up to €137m ($147m). 

Junnikkala specialises in producing sawn timber and processed wood products for both domestic and international markets. 

The acquisition includes three sawmills in Finland, one being an advanced facility located less than 10km from Stora Enso's Oulu site.  

The deal will allow the long-term supply of raw materials such as wood chips, pulpwood, and biomass sourced internally from the sawmills to Stora Enso's integrated board site. 

Subject to regulatory approvals, the acquisition is anticipated to be finalised in the first half (H1) of 2025. 

Stora Enso president and CEO Hans Sohlström said: "We are preparing for the start-up of our new converted packaging board line in Oulu and this acquisition will establish a solid foundation for our wood procurement.  

“It will also further enhance operational efficiency and optimise the Oulu production site and sawmills as an integrated unit, while also strengthening our wood products offering." 

The transaction is poised to bolster Stora Enso’s wood supply operations and fortify its position in sourcing sawlogs and pulpwood within the Baltic Rim wood market.  

Following the acquisition, Stora Enso's annual wood procurement in Finland will increase by approximately 1.7 million cubic metres, and its total sawmilling capacity by roughly 700,000m³. 

The integration of Junnikkala's operations into Stora Enso's Wood Products division and its wood procurement activities into the Forest division is designed to reduce costs and improve resource efficiency.  

Moreover, it will ensure a stable supply of raw materials to Finnish production sites and increase by-product supplies for pulp and energy at the Oulu site. 

Once fully operational, the new sawmill in Oulu is expected to generate annual synergies of around €15m.

Junnikkala, which reported sales of €115m in 2023, employs approximately 230 people. 

The company’s employee base will be transferred to Stora Enso upon completion of the transaction. 

Last week, Stora Enso ended its plan to divest the Beihai packaging board production site and forestry operations in China.