UPM sells its Schwedt mill to LEIPA Georg Leinfelder GmbH

Investor news 26.4.2016 10:00 EEST

(UPM, Helsinki, 26 April 2016 at 9:00 EET) - UPM has signed an agreement to sell its Schwedt newsprint mill site and relevant assets to LEIPA Georg Leinfelder GmbH for the aim of a conversion into liner production. The entire personnel of Schwedt mill will transfer to LEIPA as old employees. The transaction price is EUR 70 million. The transaction is subject to customary third party approvals.

As part of the transaction, the parties have agreed to enter into a contract manufacturing agreement for newsprint for a transition period which would end latest at the end of 2017. The mill's capacity is 280,000 tonnes of newsprint annually.

LEIPA will convert the mill into liner production. The planned production capacity would be approximately 450,000 tonnes of liner annually.

"With this transaction UPM and LEIPA will have an improved opportunity to develop their businesses to meet the market needs. LEIPA is a solid and successful player in the liner business," says Winfried Schaur, Executive Vice President, UPM Paper ENA.

"The negotiations with LEIPA have proceeded well and we believe that the transaction will bring benefits to the employees in the form of future employment at a converted site," says Schaur.

UPM continues newsprint production at its Chapelle, Kaipola, Hürth, Schongau, Shotton and Steyrermühl mills.

For further information please contact:
UPM Paper ENA media contact: Klaus Kohler, Manager Stakeholder Relations, klaus.kohler@upm.com, Tel. +49 821 3109-225
LEIPA media contact: Nenad Nemarnik, LEIPA Group GmbH, Director Marketing and Sales Coordination, nenad.nemarnik@leipa.de, tel. +49 160 2548278

UPM, Media Desk 
9.00-16.00 EET
tel. +358 40 588 3284

About UPM Schwedt
UPM Schwedt manufactures standard newsprint with the annual capacity of 280,000 tonnes. Located in the Eastern part of Germany the mill employs about 240 people.

About UPM Paper ENA
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 9,500 people. To learn more about UPM Paper ENA visit: www.upmpaper.com

About UPM
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 ENA and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 19,600 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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LEIPA Georg Leinfelder GmbH is part of the LEIPA GROUP. Currently the LEIPA group of companies produces approximately 900,000 tons of graphic paper and packaging paper per year at its Schwedt and Schrobenhausen locations, based on sustainable and environmentally friendly production processes.
In 2014, the family-run medium-sized enterprise with 1,450 members of staff generated consolidated sales of approximately EUR 650 million. www.leipa.de