* Karl-Henrik Sundstrom appointed CEO from Aug. 1
* Says Stora has no pressing need for consolidation
* Analysts see no major changes to strategy
* Shares down 0.4 pct vs 0.3 pct drop in Helsinki bourse
(Rewrites first paragraph, adds comments on strategy,
By Sakari Suoninen
HELSINKI, June 30 Finnish pulp and paper maker
Stora Enso has promoted Karl-Henrik Sundstrom to the
chief executive post, charged with boosting profitability in
newsprint and magazine papers which have long been in decline as
readers move online.
The company, with annual sales of about 10 billion euros
($14 billion), has been struggling for years as paper
consumption has fallen and has already taken a series of
Yet operating profit from paper making delivered only 20
percent of the group total in the first quarter, despite
accounting for 40 percent of revenue.
Chairman Gunnar Brock said on Monday making paper production
more profitable was a priority for the company, even though
Stora Enso's problems in the area were smaller than those of
most of its rivals.
"One of the tougher jobs for Karl-Henrik ... is to find a
structure and an operating performance product-wise in fine
paper, magazine and newsprint that is sustainable and
profitable, where we can earn above the cost of capital," Brock
told a news conference.
Sundstrom, 54, is currently head of Stora's largest
division, paper and wood products. He succeeds Jouko Karvinen,
who said in April he would step down after a successor had been
Karvinen has already taken a number of restructuring
measures at Stora Enso to help it adjust to a decline in demand
for paper in Europe, as consumers shift from magazines and
newspapers to the Internet.
The new CEO, who will take office on Aug. 1, said that much
of the needed transformation in paper making had been done, as
the group has closed paper mills and announced in April it would
convert its Varkaus mill to produce lightweight containerboard
rather than paper.
NOT IN TALKS
One further possibility would be to fold Stora's paper
activities together with those of rival UPM-Kymmene,
in a move which would help them to close more capacity, a
prospect that has helped lift Stora shares more than 40 percent
(and UPM's some 60 percent) in the past 12 months.
But Sundstrom said nothing was planned in this respect.
"We are not in a situation where we must do something," he
said, when asked about consolidation in the industry. "We are in
a situation where we can do if it's beneficial for us."
Brock added that the company is not in talks with UPM about
putting their paper assets together.
Sundstrom, who is Swedish, joined Stora in 2012 from NXP
Semiconductors. He was first chief financial officer
before moving last year to lead the paper and wood products
division, which contributes well over half of Stora's sales.
"Sundstrom is a safe choice, he has got good results at the
company," analyst Antti Viljakainen at market analysis firm
Karvinen and the company have said no strategic differences
were involved in his departure.
Shares in the company, which hit a near three-year peak of
8.38 euros earlier this year, were down 0.4 percent at 7.20
euros by 0850 GMT. The Helsinki bourse general index
was down 0.3 percent at the same time.
(Editing by Greg Mahlich and David Holmes)