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Management Side
UPM Reduces its Coated and Uncoated Magazine Paper Capacity
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Helsinki, Finland 20 January 2015 -- UPM permanently closes down paper machine 2 at UPM Kaukas and paper machine 5 at UPM Jämsänkoski in Finland, along with paper machine 1 at the UPM Shotton mill in the UK. Production will be ceased by the end of March 2015 at the latest. Employee consultation processes concerning the closing plans were concluded in mid-January 2015.

The employee consultation process concerning the planned closure of the paper machine 3 at UPM Chapelle in France, also announced in November, is proceeding.

The number of positions is reduced by 114 at the Kaukas mill in Lappeenranta, by 138 at the Jämsä River Mills and by 121 at Shotton. The consultations covered among others reasoning for personnel reductions, schedule and change support for those made redundant. All of the mills will continue paper production on the remaining paper machines.

Along with the closures, UPM reduces its coated and uncoated magazine paper capacity by approximately 460,000 tonnes and its newsprint capacity by 215,000 tonnes.

As planned, the company also continues centralising its Supply Chain operations in Paper ENA (Europe and North America) and transfers Supply Chain planning and order fulfillment activities from Tampere in Finland and Altrincham in the UK to Augsburg and Dörpen in Germany. Customer service continues in the current locations. The change concerns 48 positions in Tampere Supply Chain Centre and 11 positions in Altrincham. The company supports Supply Chain employees transferring to Germany.

"These decisions are unfortunate for the personnel involved, and the past months have been challenging for all of us. From the business point of view, the measures taken are necessary to improve our operating rates and profitability in the European paper business, which still suffers from overcapacity. By reducing capacity we ensure the efficient use of our remaining machines in Europe," says Bernd Eikens, Executive Vice President, UPM Paper ENA.

The announced decisions are part of UPM's EUR 150 million profit improvement target introduced in November 2014 . The full profit improvement programme includes variable and fixed cost savings in all UPM businesses and functions.

UPM Jämsä River Mills

UPM Jämsä River Mills manufacture uncoated magazine papers (SC), label and packaging papers in the Jämsänkoski unit and coated magazine papers (LWC), directory paper (MFS) and newsprint in the Kaipola unit with a combined annual capacity of 1,600,000 tonnes. Located in Central Finland, the mills employ about 1,000 people.

UPM Shotton

UPM Shotton Paper manufactures standard newsprint with an annual capacity of 490,000 tonnes. Located in North Wales, United Kingdom, the mill employs about 370 people.

UPM Paper ENA in brief

UPM Paper ENA (Europe & North America) is the world's leading producer of graphic papers, serving customers in Magazine Publishing & Advertising, Merchants, Home & Office, and Newspaper Publishing. A leader in sustainable and high performance papers, UPM Paper ENA's production is located in Finland, Germany, the United Kingdom, France, Austria, and the United States. With headquarters in Germany, UPM Paper ENA employs approximately 10,000 people. To learn more about UPM Paper ENA, visit: www.upmpaper.com

UPM in brief

Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 21,000 people and its annual sales are approximately € 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM - The Biofore Company - www.upm.com

 

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