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Stora enso expands_in_pakistan_180912

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  • This investment is in accordance with our strategy. It covers two aspects of it– Growth markets and renewable packaging
  • MDP - Operational by the end of Q1 2013Ostroleka - Planned start-up in Q1 2013CLT – Completed during Q3 2012Skoghall - Completed by the end of Q4 2012
  • Our transformation of the Company involve also other projects than MDP. Here is a timeline how these projects will be completed. The first to be ready is the Skoghallwoodyard investment in Sweden which is on our renewable packaging board mill. That will be completed in the end of this year. After that during first quarter 2013 the Ostroleka, Poland Containerboard machine will be ready. Then MDP at mid-year 2013. Our liquid packaging board mill integrated to plantation based pulp is anticipated to start-up Q4 2014.I will hand this call now over to our CFO Markus Rauramo who will still explain our result to you even though this is his last day in the office, before starting in his new job. Please go ahead Markus.
  • The biggest growth of virgin-fibre based consumer board consumption will come from Asia. Map 1: Virgin-fibre based consumer board consumption (excl. white line chipboard) (Source: Pöyry)
  • Stora Enso’s initial shareholding will be 35% with a commitment to increase the shareholding at the agreed value to 50% at a later stage subject to certain preconditions. As part of the agreement, both parties are committed to continuing a substantial investment programme of USD 135 million (EUR xxx million) to develop the business further.
  • Transcript

    • 1. Stora Enso expands business in PakistanMats Nordlander, Executive Vice President Renewable Packaging September 18 2012 1
    • 2. Stora Enso portfolioFY 2011Group Sales, EUR 10 964.9 million Operational EBIT, 866.7 EUR million Printing and Reading Biomaterials Building and Living Renewable Packaging Other 0% 29% 5.5 % 46% 32.9 % 34.8 % 15% 10% 19.5 % 6.0 % 2
    • 3. Stora Enso strategy  Growth markets  Renewable packaging Biomaterials Competitive paper
    • 4. Implementing strategyHigh return growth businesses Project On target Status  Montes del Plata Start up approximately pulp mill, Uruguay mid-year 2013  Ostroleka Proceeding as planned containerboard machine, Poland  Guangxi, China Proceeding as planned  Skoghall Support wood handling in investment Sweden and further develop Skoghall mill  Stora Enso Inpac Q3 2011  Bulleh Shah Packaging Q1 2013 Limited
    • 5. Timing of Strategic Projects Bulleh Shah Packaging Guangxi, Chin Limited a Q1 2013 Pulp and Board mill, start-up Montes del Q4 2014 Plata, Uruguay Ostroleka, Po Pulp mill, start-up land mid-year 2013Stora Enso Inpac ContainerQ3 2011 Skoghall, Swe board den machine start- Investment up start-up end Q1 2013 Q4 2012 5
    • 6. Strongest growth will be in Asia- Increasing demand of virgin fibre-based consumer board CAGR CAGR CAGR 0,2 % 1,4 % 4,6 % CAGR 6,9 % 1.5 0.9 4,4 3,8 Eastern 6,3 6,2 Europe Western CAGR Europe 3,3 % North 11,6 0,7 0,5 America Middle East 6,0 & Africa Fibre-based consumer Asia board consumption CAGR2010-2020 CAGR 3,5 %Million tonnes China 9% 1,5 1,1 Pakistan Pakistan 9% 9% South India 6% America Middle East 4% Source: Pöyry and Stora Enso 6
    • 7. Pakistan is an attractive growing consumer marketStora Enso partners in customers expansion into new growth markets • Pakistan the 4’th biggest dairy market globally • The market for our products is growing 5 – 15 percent per year • Stora Enso global customers are expanding in Pakistan 7
    • 8. Liquid dairy products significant driver for growthEspecially in China, Brazil, Pakistan and India Consumption estimate for Liquid Dairy Products 10% 9,0% 9% 8% Total Global LDP 7% average growth rate: 6% CAGR 2010 - 2012 2.4% 5% 4% 3,2% 2,8% 3% 2,1% 2% 1,5%1,2% 1% -0,1% -0,4%-0,3% -1% -2% -3% -2,8% -4% -5% Volume 57.4 33.7 25.9 22.6 12.8 11 7.7 6.7 5.6 5.1 2012 Bil Litres Source: Tetra Pak Dairy Index 2009 8
    • 9. Key facts about the investment • Stora Enso has signed an agreement to establish a joint venture with Packages Ltd. of Pakistan. The initial shareholding will be 35% with a commitment to increase the shareholding at the agreed value to 50% subject to certain conditions being met. • The joint venture will include the operations of Kasur Mill, which is a mill under development (paperboard and corrugated packaging), and Karachi Plant (corrugated packaging) currently owned by Packages. • The joint venture will to a large extent provide packaging products, such as liquid packaging board, folding boxboard and corrugated packaging, to key local and international companies in the fast- growing market of Pakistan. • The joint venture will employ about 950 people and its annual capacity will be 360 000 tonnes of paperboard, corresponding to a turn over of USD 390 million when the investments have been completed. 9
    • 10. Facts about the joint venture and Packages Ltd Packages Ltd. is the largest packaging and board producer and converter in Pakistan. It has 3 000 employees. The main assets are located in Lahore and Kasur in the province of Punjab. The shares of Packages Ltd. are listed on the Karachi, Islamabad and Lahore stock exchanges. 10
    • 11. Our financial commitmentMaximum USD 130 million• Enterprise value of JV is up to USD 125 million – Investment made in two steps; 35 % of the JV now and additional 15 % later, subject to certain conditions being met. – Including an additional maximum performance compensation, based on the financial results of the second half of 2012 and the first half of 2013• Both partners are committed to further investment programme of total USD 135 million during 2013 and 2014 including: – a new biomass power plant – a rebuild of current board machines• In total, maximum Stora Enso capital commitment of USD 130 million 11
    • 12. Modern processes and equipment Presenter name September 19, 2012 12
    • 13. Modern processes and equipment Presenter name September 19, 2012 13
    • 14. Modern processes and equipment Presenter name September 19, 2012 14
    • 15. Long tradition of cooperation• Packages is a long term partner that Stora Enso knows well. The largest shareholder is the family of Babar Ali who has long ties with Swedish and international companies including Stora Enso in the region.• Packages Ltd. has a long tradition of working with key local and international companies. Stora Enso already has a 6.4% shareholding in Packages Ltd. 15
    • 16. Managed in accordance with Stora Enso policies• A strong sustainability agenda is established in Pakistan.• Already there is advanced processes established at Packages.• In addition, Stora Enso will have its own expertise organization in place.• Main activities are training, monitoring, auditing and follow up in reference to Stora Enso code of conduct 16
    • 17. Summary• Strategic move• Expands in growth market• Attractive investment• Long tradition of cooperationWe are committed to growth andthis investment is one of severalproof points in that process. 17

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