Papermaker Cuts Staff Over Duties

HELSINKI — Nordic papermaker Stora Enso unveiled big job cuts Wednesday as it battles to cope with an ailing market and a planned increase in Russian wood duties.

The European paper industry has for years suffered from overcapacity, and increasing costs of wood, partly because of Russian export duties, and energy have eaten into already low margins.

The company said it would lay off 1,700 employees worldwide, including 400 in Russia, and close mills because of poor profitability.

In addition to persistent paper oversupply and the weakening global economy, Russia raised export duties by 50 percent in April to 15 euros ($21) per cubic meter. It has said it will raise duties to 50 euros per cubic meter by 2009, which would more than double the cost of wood. Finland's paper sector accounts for almost one-fifth of the country's exports and has in recent years imported more than 10 percent of its wood from Russia. (Reuters, AP)