Update: UPM Closes Madison Paper Industries, to Sell Related U.S. Hydro Power Assets

HELSINKI, Finland — May 25, 2016 — In March, UPM-Kymmene Inc. and Northern SC Paper, a subsidiary of the New York Times Company, had announced the dissolution of their partnership, Madison Paper Industries in Maine. As an update to this announcement, the Madison Paper mill has ceased paper production on May 21.

The closure impacts approximately 214 employees located at the mill site. Some employees will remain beyond May to maintain buildings, operate the hydro generating facilities and support activities related to the closing. All employment-related actions will be handled in accordance with federal and state statutory requirements.

Commenting on the closure, Ruud van den Berg, senior VP of UPM Paper ENA, said, "Despite everyone's best efforts, the difficult decision has been made to cease paper production at Madison. Demand for SC papers declined significantly in 2015 and the decline is expected to continue. The Madison mill is not cost-competitive and has lost a significant amount of sales in the recent past."

With the closure of the mill, UPM has reduced 195,000 tons of its supercalendered paper capacity in the U.S.

About Madison Paper Industries
Madison Paper Industries is a partnership of UPM and Northern SC Paper Corp., a subsidiary of the New York Times Company, producing approximately 195,000 tons of supercalendered paper on one paper machine. The mill employs more than 200 employees and is located in Maine. The assets include two hydro power plants.

About UPM Paper ENA
UPM Paper ENA (Europe and North America) is the world's leading producer of graphic papers, serving customers in magazine publishing and advertising, merchants, home and 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 U.S. With headquarters in Germany, UPM Paper ENA employs approximately 9,500 people.

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 Europe and North America and UPM Plywood. Its products are made of renewable raw materials and are recyclable. UPM serves customers worldwide. The group employs around 19,600 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM - The Biofore Company.

Source: UPM.