Google Buys ? A Paper Mill?
Thursday, February 12, 2009; 12:22 AM
Consider it a sign of the times when internet company Google acquires the buildings and premises of a mill site from a paper, packaging and forest products company that caters to the print industry.
Today, Finland-based paper group Stora Enso has announced that Google is buying the buildings and most of the Summa Mill site, where production of paper was ceased last month in January 2008, for approximately ?40 million ($51.7 million).
From the press release:
Stora Enso has signed an agreement to sell the buildings and most of the Summa Mill site in Finland to Google Group of Companies for approximately EUR 40 million.The sale is expected to close by the end of the first quarter 2009. The transaction will improve operating profit by approximately EUR 38 million, of which approximately EUR 15 million is a reversal of earlier impairment, and will be recorded as a non-recurring item in the first quarter 2009 results.
Google is expected to announce its plans or future investment "in due course", and has agreed that part of the mill site will be further transferred to the City of Hamina for other industrial uses.
Update: obviously the space is most likely going to serve as a data center, which has now also been confirmed by Reuters.
An earlier (brutally honest) press release from Stora Enso reveals that the mill site was closed down because of "persistent losses in recent years and poor long-term profitability prospects" It continues: "Despite tremendous efforts by its employees, the mill cannot compete in today's and tomorrow's markets using expensive virgin wood fibre, much of which is imported".
You can read the whole release about further cost reductions and lay-offs here.
(Thanks to Jens Agerberg for the tip)