UPM plans to reduce graphic paper capacity in Germany to align with customer demand and ensure competitiveness

Investor news 29.5.2024 15:20 EEST

UPM Communication Papers plans to permanently close its Hürth newsprint mill and to shut down one fine paper machine at Nordland Papier (PM 3) in Dörpen, both assets located in Germany. If realized, the measures would result in annual reductions of 330,000 tonnes of newsprint paper capacity and 280,000 tonnes of uncoated fine paper capacity in UPM’s portfolio. These plans are a continuation of necessary steps to proactively align with customer demand and ensure competitiveness.

Should the plans be implemented the number of positions affected is estimated approximately at 135 in Hürth and 210 in Dörpen. The participation process with the workers council will start immediately in line with local legislation. Both paper machines affected by the planned measure would stop graphic paper production latest by the end of 2024. Production on the remaining paper machines at Nordland Papier will continue as before.

Graphic paper demand has continued to decline, reflecting the overall trend in paper consumption driven by digitalization. The decline in demand accentuated in 2023 and a durable recovery is not expected, resulting in significant overcapacity in the market.

“In recent years, we have already responded to overcapacities in the global paper markets with selective capacity reductions, always considering the competitiveness of our business. The planned closures would ensure an efficient and flexible use of our remaining paper assets and will therefore enable UPM Communication Papers to stay a reliable partner to our customers in the long run. However, we are aware that today’s announcement is very difficult news for our employees in Hürth and in Dörpen. We are committed to conducting a fair dialogue with employee representatives to seek responsible solutions for our workforce,” says Antti Jääskeläinen, Executive Vice President, UPM Communication Papers.

The plans announced today would strengthen the overall cost competitiveness of UPM Communication Papers and are a prerequisite for consistent, long-term paper operations. UPM would recognize restructuring charges of EUR 113 million (EUR 68 million cash impact and an impairment of EUR 45 million) as items affecting comparability in its Q2 2024 result. The planned actions are estimated to result in annual fixed cost savings of EUR 45 million.

For further information please contact:
UPM Communication Papers Stakeholder Relations, tel. +49 821 3109 225, paperinfo@upm.com

For local information please contact:
Armin Schmidt, General Manager UPM Hürth, tel. +49 2233 2006 101
Klaus Reimann, General Manager UPM Nordland Papier, tel. +49 4963 401 2117
(best available from 16:00-17:00 CET)

UPM, Media Relations
Mon-Fri 9:00-16:00 EEST
tel. +358 40 588 3284

About UPM Hürth
UPM Hürth manufactures newsprint papers with the annual capacity of 330,000 tonnes. Located in North Rhine Westphalia, Germany the site employs around 135 people.

About UPM Nordland Papier
UPM Nordland Papier produces uncoated and coated office and printing papers as well as specialty papers. The Dörpen paper mill is the largest of its kind in Europe and produces up to 1.2 million tons of fine and specialty paper annually. Located in Lower Saxony it employs approximately 1,150 people at the paper mill.

UPM Communication Papers
As a leading company in the paper industry, we drive the value of paper as a sustainable medium of trust, impact, learning and inspiration. UPM Communication Papers offers the industry’s widest portfolio for newspaper, magazine, marketing and book printing as well as for home and office applications. Our high performing papers and service concepts add value to our customers' businesses, while actively fulfilling demanding environmental and social responsibility criteria. With headquarters in Germany, UPM Communication Papers employs approximately 6,000 people and has 11 modern paper mills globally. More about us and our products at www.upmpaper.com

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We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 16,600 people worldwide and our annual sales are approximately EUR 10.5 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com

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