HELSINKI (News release) -- Stora Enso has signed an agreement to divest its 60% equity stake in the Dawang Mill in China, to its joint venture partner, Shandong Huatai Paper.

The joint venture Stora Enso Huatai (Shandong) Paper Company Limited operates the Dawang paper mill at Dongying in Shandong province in China. The mill has an annual production capacity of 140 000 tonnes of super-calendered (SC) magazine paper and other publication paper grades based on recovered fibre.

The transaction is expected to be completed by the end of 2019 and it will not have any material impact on Stora Enso's operational EBIT. Following the transaction, Stora Enso's net debt will decrease by approximately EUR 22 million and annual sales by approximately EUR 60 million. After this transaction, Stora Enso will not have any paper production in China.

"We have had a joint venture partnership with Huatai over the past ten years of operation and believe Huatai can develop Dawang Mill for the long-term benefit of Chinese paper customers," says Kati ter Horst, EVP, Stora Enso's Paper division.

The JV partner Shandong Huatai Paper Co. Ltd is a publicly-listed company on the Shanghai Stock Exchange, Chinawith sales of EUR 1.89 billion in 2018. The company is based in the city of Dongying, China and its primary products include newsprint, coated paper and offset paper.