Stora Enso Oyj said on Friday it would delay plans to build a paper and pulp mill in Nizhny Novgorod in Russia, citing the weak economy and continuing problems in the paper industry.
Stora Enso in May 2008 started a feasibility study for the project, which it expected to conclude by April 2009. “Stora Enso has decided to defer its final decision regarding the proposed pulp and paper mill... to a later stage due to the weak global financial situation and near-term outlook for the forest products industry,” the firm said.
European paper makers have been looking into expansion in the emerging markets as overcapacity has kept a lid on prices in western Europe and demand in mature markets has stagnated.
Stora’s Finnish rival UPM-Kymmene has formed a joint venture with Russian Sveza for a pulp mill in northwestern Russia, an investment which would top €1 billion. (Reuters)