UPM to Shutdown Myllykoski Mill
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UPM, Helsinki, Finland, this week said that it will permanently cease production at the Myllykoski paper mill in Kouvola, Finland, by the end of this year. During employee negotiations. UPM was unable to establish a way to meet the commercial requirements for continuation of operations at the mill. In addition, the company is cutting down its overlapping operations in paper sales, the supply chain, and its functions in Finland. The mill produces some 600,000 metric tpy of SC, LWC, and MWC grades.
The personnel reductions will affect 371 people at the Myllykoski paper mill and 21 people at Myllykoski Corp. and Myllykoski Sales Nordic. Personnel reductions will start in January. The aim of these cuts is to improve the profitability and cost-effectiveness of UPM's European paper business and adapt the company's paper production to the needs of its global customer base, UPM says.
During the negotiations, issues such as pension schemes, relocations within the company, re-training, and ways to alleviate the effects of redundancies were discussed. UPM will implement a program called "From Job to Job" to support its employees during the transition.
"The Myllykoski mill has been making a loss for several years despite numerous measures aimed at making the operations more efficient. The mill's cost competitiveness is weak. The high costs of raw materials and energy have further increased total costs and permanently damaged the mill's opportunities to reach a profitable level," Jyrki Ovaska, president, Paper Business Group, explained.
The declining economic situation has worsened the mill's situation this autumn, the company added, noting also that alternative, profitable uses for the mill inside UPM's businesses have not been found.
"This is a heavy day for Myllykoski people. However, it's important to face the realities and to look ahead. UPM will support re-employment and training of Myllykoski personnel," Ovaska said.
UPM, the Ministry of Employment and the Economy, and the City of Kouvola are looking for a new industrial player to occupy the Myllykoski mill. Fields being looked into include bioenergy and the chemicals industry.
UPM says it will not establish a new business park in Myllykoski, but will continue to develop the nearby Voikkaa Business Park by actively seeking new businesses for the area. The excellent logistics, energy solutions, and facilities in the area make the park an optimum location for many different types of businesses, the company points out.
UPM will also establish a business incubator in the Voikkaa Business Park in collaboration with Kouvola Innovation Oy. The purpose of this three-year Protomo project is to encourage entrepreneurs to establish small businesses. It will also support the business startup allowance scheme included in the From Job to Job program.
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