The meaning of these words became quite familiar in the city of Kemi and the surrounding Sea-Lapland area in spring 2021. The challenging situation was triggered by a Stora Enso Group announcement on 20th April 2021. The Group announced of its plans to close the Veitsiluoto paper mill in Kemi affecting immediately 670 employees, and 120 persons through subcontracts. Following the announcement, the Group begun employee cooperation negotiations at Veitsiluoto with plans to shut down the paper manufacture for good. The closure is planned to be implemented during the Q3 of 2021. 

Once the cooperation negotiations were completed during June 2021 Stora Enso confirmed redundancy of 550 employees, of which 28 percent can be arranged through pension schemes. A sawmill located in the area will continue its operations with around 50 workers.  

Sudden structural change of Kemi – Case Veitsiluoto

The city of Kemi has a long history of paper and pulp manufacturing. The planned closure of Veitsiluoto will have a major effect on the local demographic, economic as well as social structures in a city with just over 20K inhabitants. The impact of the closure will be felt in the whole of the Sea-Lapland area as the Veitsiluoto employees have traditionally also come from the nearby municipalities. 60 percent of the Veitsiluoto workforce are Kemi residents, 18 percent are from Keminmaa and 7 percent from Simo.

The cause of the closure for the city of Kemi is estimated to be around € 5 million in tax losses, and € 8 million in whole of the Sea-Lapland region when all the employees are made redundant, and they are unable to find another job. With regards to neighbouring areas the tax losses are estimated at € 1,5 million for Keminmaa and € 0,6 million for Simo. The closure will also have a strong effect on the industrial subcontracting network, and it is reasonable to estimate that the negative impact will have a multiplier effect of 1500 jobs lost.

The local authorities of the Sea-Lapland and Lapland regions were well prepared and acted vigilantly on this sudden structural change caused by the Stora Enso announcement. A restructuring group was immediately named to manage the situation. The group is formed by the city of Kemi, Keminmaa and Simo municipalities, the Regional Council of Lapland, the Employment and Economic Development Office in Lapland, the Centres of Economic Development, Transport and the Environment both in Lapland and in the Northern Ostrobothnia, the University of Lapland, the University of Applied Sciences of Lapland, the Vocational Education Consortiums in Kemi-Tornio region (Lappia) and in Rovaniemi (Redu), Digipolis, the Sea-Lapland Development Centre, the local offices of Finnish Entrepreneurs Organisations in Kemi and Keminmaa, the officials of the Ministry of Economic Affairs and Employment, and the management of Stora Enso Veitsiluoto.

The possible closure of the Veitsiluoto paper mill is simultaneously a massive crisis as well as a possibility. The location of Veitsiluoto, its industrial infrastructure and resources, and logistical position have already raised interest for the area. All the activities of the sudden structural change must support and steer inherent demand into investments, new businesses and jobs.

The outlined action plan (see figure below) is the first step of the sudden structural change process and includes proposals for short-term and medium-term measures. The target is to create minimum of 1000 new jobs (including in new businesses) both in large companies as well as in small and medium enterprises. This first step outlines the means how to minimise the negative impact of the closure by creating compensatory jobs as quickly as possible. The action plan for the city of Kemi, including the municipalities of Keminmaa and Simo, proceeds from the immediate to the next two steps that specify measures for expediting and utilising the regional green transition and digitalisation. The first step starts with setting up projects coordinating the sudden structural change, and actions of support for the Stora Enso personnel from the social sustainability point of view. Additionally, schemes to expand company acquisitions and development are established. The project portfolio will be updated during the process.

The objective is to create quickly new and compensatory jobs in the industrial circular economy, and basic industry, as well as travel, trade and service fields. These are managed by channelling direct investment, research, development and innovation actions into employment and business operations. The key is to develop competence in all areas. Training and competence development enable reforming workforce structure. Support will be allocated to company reformations, innovation and competence development, and to green and digital transitions as well as better technological utilisation. Reinforcing regional entrepreneurship is also vital for diversifying the business sector. The region has a potential to become a hub for Start-ups. New businesses are welcomed particularly for the basic industry and circular economy ecosystems, but also for the travel, service and consultancy sectors.

The threat of the large worker dismissal causes various, extensive short-term and long-term effects on the region but particularly on the personnel and their families who are directly under the threat. At initial stage, providing social and mental support for the individuals is important, and later their re-employment, training and career development possibilities become highlighted. The city of Kemi, Keminmaa and Simo municipalities together with the whole of the region aim to keep all the Stora Enso and subcontractors’ employees in the region and find them new jobs and training options.

The sudden structural change activities are managed together with Stora Enso. The actions will lead to at least 1000 new jobs being created, and Veitsiluoto will be important, attractive industrial business park around the Bothnian Bay with strong base of leading international companies.