Stora Enso, a Finland-based manufacturer of wood and biomass products, confirmed to Sourcing Journal on Tuesday that it was “in the process of exiting the segment of dissolving pulp for viscose production globally.”
A company spokesperson did not comment specifically on a report in the South China Morning Post that highlighted potentially problematic links between the company and possible forced labor in China’s Xinjiang region.
“We are currently in silent period and will come back to the topic, in connection to our Q1 report on April 23,” the spokesperson said.
The South China Morning Post reported that Xinjiang has emerged as a major player in the global viscose industry, and that Finland was the region’s biggest foreign supplier of dissolved chemical wood pulp, the raw material needed to produce viscose.
The U.S. has essentially banned imports of certain products from the region and U.S. Secretary of State Anthony Blinken has warned that Beijing’s news and social-media onslaught against multinational brands raising concerns about forced labor in the region draws further attention to its actions in Xinjiang, where authorities are believed to have detained up to 1.8 million Uyghurs, Kazakhs and other Turkic Muslims in internment camps as part of a broader campaign of repression and assimilation in violation of the United Nations (UN) Genocide Convention.
The South China Morning Post reported that Stora Enso previously confirmed that it exports its dissolved chemical wood pulp to entities in Xinjiang.
“We have a relationship with the [Xinjiang-based] customer since 2012 and have over the years regularly visited the company production sites. During those visits we have never seen signs of forced labor,” a spokesman said in a statement, according to the Post.
A spokesperson told Sourcing Journal that “during last year, we reviewed Stora Enso’s strategic agenda and identified our focus areas going forward.”
“This segment is not core for us and stands for only a small part of our overall business,” the spokesperson said. “We want to focus on and take a leading market position in the segments where we see potential for future growth, namely packaging, wooden construction and biomaterials innovation from lignin.”
Dissolving pulp is produced at Stora Enso’s Enocell mill in eastern Finland, which is producing standard and dissolving pulp grades, the spokesperson said. Production will remain as normal at the Enocell mill and shift from dissolving pulp to other pulp grades for other end uses.
“As we always do, when taking business decisions, we have looked at the matter holistically considering strategy, sustainability and financials,” the spokesperson added. “Our strategic direction remains in line with what we communicated on the Capital Markets Day in November 2020 and exiting our dissolving pulp business for viscose production will not have material impact on our financial results.”
Stora Enso says on its website that its Beihai Mill in the Guangxi region of southern China is a consumer board mill that produces high-grade carton board products. It also has four production units in China that produce packaging for consumer products, including carton, rigid and corrugated boxes, paper bags and user manuals and molded fiber.
The four mills are Dongguan in Guangdong in southern China, Qian’an in Hebei in northern China, Jiashan in Zhejiang in eastern China and Changzhou in Jiangsu, also in eastern China.