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Stora Enso Reorganizes Its Core Product Areas

Press release from the issuing company

HELSINKI, Finland, March 20 -- Stora Enso today announced that Stora Enso is changing its organisational structure to reflect the Group's strategic principle of being operated and managed as one industrial group. The new structure will be streamlined around Stora Enso's core product areas: Paper, Packaging and Forest Products. The present organisation has been successful during integration of Stora Enso and the basic structure will therefore be retained. The reorganisation is intended to improve coordination and cooperation between the units within the three core product areas and to facilitate more focus on Stora Enso's growth areas in North America, Asia Pacific and Latin America. Paper Stora Enso's current paper divisions will form the new Paper Product Area comprising the Publication Papers, Fine Paper, North America and Merchants divisions. The current Newsprint and Magazine Paper divisions will be merged to form the new Publication Papers division. Speciality Papers, which is now part of the Packaging Boards division, will form a new business area within Fine Paper. The objective is to improve cooperation between paper-related businesses in strategy, sales and marketing, and production. This will result in a more coordinated approach to customers through improved customer relationship management. Prioritising of mergers, acquisitions and investments will be enhanced, and capacity will be more efficiently managed. Synergies are expected as a result of easier exchange of best practice. The Paper Product Area will be headed by Kai Korhonen, currently Senior Executive Vice President, Stora Enso North America. The divisions within the Paper Product Area will be headed by: - Publication Papers: Bernd Rettig, currently SEVP, Magazine Paper - Fine Paper: Jussi Huttunen, SEVP, who will remain head of the division - North America: Lars Bengtsson, currently SEVP, Newsprint - Merchants: Sven Rosman, EVP, who will remain head of the division Packaging The Packaging Product Area will comprise Consumer Boards, Corrugated Packaging, Industrial Papers and Cores and Coreboards. Senior Executive Vice President Pekka Laaksonen will remain head of the product area. The head of Consumer Boards, Senior Vice President Niilo Poyhonen, will join Stora Enso's Management Group. The heads of the Paper and Packaging Product Areas will report to the CEO. Forest Products Timber, the Pulp Competence Centre and Forest will be brought together as the new Forest Products Product Area, headed by Arno Pelkonen, currently Senior Executive Vice President, Timber Products. The aim is to attain better coordination between sawmilling, pulping and wood procurement. This will result in better integration of wood procurement and optimisation of global wood flows. The head of Forest Products will report to the Deputy CEO. Other changes A new Latin America division will be formed to manage local projects and to coordinate sales company activities. It will be headed by Nils Grafstrom, currently Executive Vice President, Market Service and IT, who will report to the Deputy CEO. Market Services, consisting of the Sales Network and Transport and Distribution, will become a separate staff function headed by Senior Vice President Petri Wager, who will report to the CEO. The IT staff function will come under the Deputy CEO. Responsibility for the Energy department will be transferred to the Deputy CEO. The new organisational structure will take effect on 1 May 2003. The organisational changes mentioned above will result in some alterations to the Company's financial reporting, although the results for Q1 2003 (released on 29 April 2003) will not be affected and will be reported as earlier. Stora Enso is an integrated forest products company producing magazine papers, newsprint, fine papers, packaging boards and wood products, areas in which the Group is a global market leader. Stora Enso's sales total EUR 12.8 billion. The Group has some 42 500 employees in more than 40 countries in five continents and about 15 million tonnes of annual paper and board production capacity. Stora Enso's shares are listed in Helsinki, Stockholm and New York.