STORA ENSO : Increase in Fluff production. L3 closure becomes permanent

Research evidence excerpt

STORA ENSO : Increase in Fluff production. L3 closure becomes permanent

EQUITIES

PAPER & PACKAGING

STORA ENSO NEUTRALPRICE* EUR9.9  TARGET PRICE EUR10.5 (UPSIDE 6%)

STORA ENSO ADR NEUTRALPRICE* USD11.4  TARGET PRICE USD12.2 (UPSIDE 7%)

FLASH NOTE

Increase in Fluff production. L3 closure becomes permanent

18 JUNE 2026 Securities Research Report Production time: 07:00* (London time)

Research Analyst & Publishing Entities

Francisco Ruiz BNP Paribas SA (+34) 91 114 83 06 francisco.ruizmartin@bnpparibas.com

What happened?

Stora Enso announced yesterday an EUR19m capex to increase by c.10% its fluff pulp production at its Skutskär mill

in Sweden. This represents c.44k new tonnes and the investment is already contemplated in Stora’s capex plan for the

year (<EUR550m). The investment is expected to be completed during Q4 2027. Additionally, and regarding the

announcement made a week ago (see news), some curtailments in its softwood capacity were stated to have resulted

in a permanent closure of fiberline 3 in the same mill.

BNPP View:

The structural pressure for softwood producers on higher cash cost and with hardwood taking market share forced

players to look for other pulp niches like fluff (for the hygiene market, which is growing a bit faster than the pulp market

as a whole) or UKP. The investment is not big and will probably take advantage of the softwood capacity reduction. It

will reinforce the leading position of Stora in fluff pulp in Europe

The investment in fluff pulp production increase at Skutskär will strengthen Stora Enso’s position as the leading fluff

pulp producer in Europe. The upgrades will further enhance production stability and efficiency, improve quality, enable

future fiber blends, and increase fluff production capacity by approximately 10%.