HELSINKI, Finland (AP) – Stora Enso Oyj, one of the world’s largest paper makers, said Tuesday it will buy International Paper Inc.’s coated publication paper business in Brazil for about $415 million to boost its presence in the Latin American market.

The Finnish-based forest products company will acquire assets including a paper mill, a sawmill and some 50,000 hectares of land and plantations.

“The strategic aim of this acquisition is to strengthen our presence in the Latin American market through paper production in Brazil,” Chief Executive Jukka Harmala said in a statement. “With this acquisition, we will become the sole producer of coated mechanical paper in Latin America.”

Stora Enso’s shares rose 0.7 percent to $14.69 during afternoon trading in Helsinki.

The transaction is expected to be completed in the third quarter of 2006.

The paper mill will be incorporated into Stora’s publication paper division, while the sawmill and land will be incorporated into its forest products unit. The future development options for the sawmill and plantations are being evaluated, the company said.

International Paper said in a separate release that the Brazilian coated papers business had sales of about $230 million in 2005.

It produces approximately 200,000 metric tons of coated paper for catalog, magazine and retail insert markets, and about 83 million board feet of lumber each year. Included among the forestlands are pine and eucalyptus plantations. The business has staff of more than 700 people.

The transaction is part of International Paper’s previously announced plan to focus on uncoated papers and industrial and consumer packaging globally. Including this deal, expected proceeds from transformation-related divestitures announced to date are about $9.7 billion.

Stora Enso currently has a presence in Brazil through the Veracel Cellulose pulp mill, a joint-venture with Brazil’s Aracruz Cellulose near the city of Eunapolis, some 530 miles northeast of Rio de Janeiro.

The Helsinki-based company said separately that it also plans to invest $56 million to expand production capacity at two of its sawmills in southwestern Russia. From that amount, an estimated $40.3 million will go toward upgrading the Nebolchi fresh sawn timber mill and the expansion of the Impilahti sawmill will account for the rest.

The Nebolchi mill project is to be completed during the first quarter of 2008, while the Impilahti mill expansion is expected to be finished during the third quarter of 2007.

Stora Enso produces magazine paper, newsprint, fine paper, pulp and packaging boards. It employs 46,000 people in more than 40 countries.

On the Net:

Stora Enso site: http://www.storaenso.com