UPM Plans to Cut 1.3 Million Tonnes of Paper Capacity in Europe
“The paper industry faces severe challenges due to high raw material, energy and logistics costs, and considerable overcapacity. The profitability of our paper business is clearly below the level required to run long-term sustainable operations. The planned restructuring would further strengthen the cost competitiveness of UPM’s paper operations and reduce the future need for major maintenance investments,” says UPM’s President and CEO Jussi Pesonen.
“With the planned actions we would respond to the magazine paper overcapacity challenge for our own benefit. In addition, we would ensure the efficient use of our remaining capacity. However, this plan would not solve the cost challenges of the industry,” says Pesonen.
“Our aim is to improve the profitability and cost competitiveness of our magazine papers. The planned measures would immediately reduce the unit costs of UPM’s magazine papers and newsprint from the level before the acquisition of Myllykoski. In spite of the restructuring, we would be able to serve our paper customers better through our improved product portfolio and geographic scope”, says Jyrki Ovaska, President of UPM Paper Business Group.
“The planned closures are very unfortunate for the affected employees but restructuring is the only way to make a fundamental improvement in the cost competitiveness of our paper business. UPM will carry out the restructuring negotiations in a responsible and professional manner in line with the national legislation of the respective countries,” says Ovaska.
UPM will consider options to establish a “From-job-to-job” programme appropriate to the local legislation provided the plan proceeds to implementation. The planned actions will be discussed in the upcoming negotiations with employees and authorities.