UPM Paper ENA plans to reduce 305,000 tonnes of graphic paper capacity in Europe

11/3/2016 9:30 AM UTC

(UPM, Helsinki, 3 November 2016 at 11:30 EET) - UPM is planning to permanently reduce its graphic paper capacity in Europe by 305,000 tonnes. The capacity reductions are planned to take place in Austria and Germany.

UPM plans to permanently close two paper machines: 

  • SC paper machine 3 at UPM Steyrermühl, Austria
  • SC paper machine 2 at UPM Augsburg, Germany            

Number of persons affected by the plan is estimated 150 for UPM Augsburg and 125 for UPM Steyrermühl. The employee consultation processes will start in the course of November in line with the local legislation. The machines are planned to be closed after the consultation processes have been finalized.

The plan would result in annual cost savings of about EUR 30 Million. UPM would book charges of approximately EUR 75 Million as an item affecting comparability in Q4 2016. Of the total, approximately EUR 45 Million would be cash costs.

According to the plan both mills would continue paper production on the remaining cost-competitive paper machines at the mill sites.

"The demand for SC papers, in line with other graphic papers, has been declining during the last years and the decline is expected to continue. Even under challenging market conditions our employees have always given their best and we regret the impact of the planned closures on the personnel. However, we have to adjust our operations to match with long-term customer demand," says Winfried Schaur, Executive Vice President, UPM Paper ENA.

"Due to the adverse market conditions we have conducted a thorough analysis on the cost competitiveness of our graphic paper machines. Because of their scale, technical age and limited further savings potential PM3 in Steyrermühl and PM2 in Augsburg are the least competitive SC PMs in UPM's machine park. The planned closures would ensure an efficient use of our remaining five SC paper machines," says Anu Ahola, Senior Vice President, News & Retail, UPM Paper ENA.

Earlier this year UPM sold its Schwedt mill. The annual production of 282,000 tonnes of newsprint will be ceased in the end of Q3 2017. The new owner will convert the mill into liner production.

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

For local information, please contact:
Ernst Spitzbart, General Manager, UPM Steyrermühl, UPM Paper ENA, (best available from 14:30-15:30 CET) tel. +43 7613 8900 359
Gerhard Mayer, General Manager, UPM Augsburg, UPM Paper ENA, (best available from 14:30-15:30 CET) tel. +49 821 3109 509

UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284
media@upm.com

About UPM Steyrermühl
UPM Steyrermühl manufactures newsprint and uncoated magazine papers (SC) with the annual capacity of 485,000 tonnes. Located in Upper Austria the mill employs about 400 people.

About UPM Augsburg
UPM Augsburg manufactures coated (LWC) and uncoated magazine papers (SC) with the annual capacity of 498,000 tonnes. Located in Southern Germany the mill employs about 440 people.

About UPM Paper ENA
UPM Paper ENA (Europe and North America) is the world's leading producer of graphic papers, offering an extensive product range for advertising and publishing as well as home and office uses. The high performing papers and service concepts of UPM add value to our customers' businesses, while activity fulfilling demanding environmental and social responsibility criteria. With headquarters in Germany, UPM Paper ENA employs approximately 9,000 people. More about UPM Paper ENA and its products at 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 Specialty Papers, 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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