Reorganisation at Stora Enso - business areas to improve accounbtability, response, cost reduction etc. Is this credible?

Stora Enso made the following announcement today:

Stora Enso is reorganising its operations from the current four divisions into eight separate business areas: Fine Paper, Merchants, Consumer Board, Industrial Packaging, Magazine Paper, Newsprint, North America and Wood Products. An impairment charge totalling about EUR 1 300 million will be accounted for as a non-recurring item without cash impact in the third quarter of 2007.

"The main objectives of the reorganisation are to give business area leaders and their teams clear responsibility for improving financial performance, remove layers of management and to speed up decision-making. These changes will also improve our external transparency through enhanced reporting. The new structure will further focus the portfolio analysis work and facilitate scalability for the future, strengthening Stora Enso's position with regard to potential industry consolidation," says Stora Enso CEO Jouko Karvinen.

"Through these organisational changes, we also seek to improve the performance of our North American operations by reorganising them into a separate entity with full profit and loss responsibility reporting directly to me. Key criteria for defining the new business structure were identifying entities with strong synergies within the business and to a large extent their own customer base, while keeping customer interfaces simple and sharing relevant Group-level synergies."

The new organisational structure is effective immediately. Financial reporting in the third quarter results to be published on 25 October 2007 will be based on the new eight business areas. Historical figures based on the new business areas will be reported separately by 15 October 2007.

Further details of replay numbers can be found at www.storaenso.com/investors. If you would like an alternative view of this, refer to the Forbes report where the view of the analysts is that this will lead to a break-up of the business as it attempts to unload unprofitable operations.

The new organisation and its leadership are as follows:

Reporting Unit	Executive Responsible	Responsibility
Fine Paper Business Area	Aulis Ansaharju	Fine Paper, Country Manager Finland
Consumer Board Business Area, Merchants Business Area	Mats Nordlander	Consumer Board, Merchants, Market Services
Industrial Packaging Business Area	Veli-Jussi Potka	Industrial Packaging
Magazine Paper Business Area	Hannu Alalauri	Magazine Paper
Newsprint Business Area	Juha Vanhainen	Newsprint
North America Business Area	John Gillen*	North American businesses
Wood Products Business Area	Elisabet Salander Björklund	Wood Products, Wood Supply and Pulp Supply
Group Function Leaders
	Hannu Ryöppönen, Deputy CEO and CFO	Finance and Strategy, Purchasing
	Bernd Rettig	Technology and R&D, Operations Improvement, Logistics and Investments, Country Manager Germany
	Christer Ågren	HR Services, Leadership Development, IT, Country Manager Sweden