Apple goes from villain to coveted client with this Finnish firm

Stora Enso Oyj has reportedly become a key supplier of Apple.

tech Updated: Mar 12, 2018 15:31 IST
Giles Turner
Giles Turner
Bloomberg
Apple,Apple Finland,Apple Stora
Apple was accused of killing Finland’s paper industry in 2014 with its iPad.(Bloomberg)

A former Prime Minister of Finland once blamed Apple Inc. for torpedoing two of his country’s biggest industries -- mobile phones and paper mills.

Now Stora Enso Oyj, one of Europe’s largest paper and packaging makers, has become a key supplier to the iPhone maker, according to documents published last week.

The tie-up wasn’t always on the cards. In 2014, then Prime Minister Alexander Stubb accused the iPad of killing Finland’s paper industry, which is dominated by Stora and UPM-Kymmene Oyj. “We have two champions which went down,” said Stubb, referring to the paper industry and the demise of local champion Nokia Oyj.

While Nokia is no longer rivaling Apple as a phone-maker, Stora hasn’t done that badly. Since Stubb publicly lamented its fate, Stora’s shares are up 150%.

Created through a merger of Sweden’s Stora AB and Finland’s Enso Oyj in 1998, the company has spent billions shifting from the declining paper business -- as people increasingly switched to digital from printed newspapers -- to focusing on innovative wrappings made from tree and plant fibers. More than a third of its sales now come from consumer board and packaging solutions, up from a fifth two decades ago.

Apple has undergone its own shift, away from plastic packaging. For its recent iPhone 8 launch, Apple used a fiber-alternative instead of the polypropylene wrap around the power adapter. The packaging for the iPhone 7 used 84% less plastic than the previous version.

Spokespeople from Stora and Apple declined to comment on the details of the deal between the two companies.

However, winning a contract with Apple gives Stora access to a customer that sells around 75 million iPhones a quarter, all requiring packaging.

It’s unclear which supplier was replaced by Stora, or whether it has worked with Apple before. Every year Apple lists its top suppliers, and companies including Shenzhen YUTO Packaging Technology Co., Ltd. remain on the list. Regardless, the current deal is likely to be sizable. This year is the first time Stora has made the list since Apple began publishing it in 2012.

The three Stora factories supplying Apple are based in China, where most of the U.S. tech company’s products are assembled. China’s push will “ significantly” boost sales growth at Stora Enso’s Consumer Board and Packaging Solutions divisions, Chief Executive Officer Karl-Henrik Sundstrom told Bloomberg in February.

First Published: Mar 12, 2018 15:31 IST