UPM Paper ENA to Reduce Graphic Paper Capacity, Optimize Operations

In light of the global market situation for graphic papers, and to sustain its competitiveness and leading position in the market, UPM Paper ENA, Finland, reports that it plans to:

• Optimize operations at its UPM Nordland Papier and UPM NorService units in Dörpen, Germany, Europe's biggest fine paper site. Streamlining internal processes and investing in automation will enable a sustainable improvement of the fixed cost structure. 
• Permanently close paper machine No 5 at UPM Blandin, Minn., USA, reducing the annual capacity by approximately 128,000 tons of coated magazine paper in response to overcapacities in the North American paper market. The closure is expected to be completed by end of Q1 2018 at the latest. Paper production related to paper machine No. 6 is planned to continue at the Blandin site.

In total, 223 positions are estimated to be affected by these plans in Dörpen at UPM Nordland Papier and UPM NorService. At UPM Blandin, it is estimated that 150 positions will be affected by the plans. 

Employment related actions in Blandin will start with immediate effect and will be handled in accordance with federal and state statutory requirements. The employee consultation process in Dörpen will start in November in line with local legislation.  

UPM will recognize restructuring charges of approximately EUR 35 million as items affecting comparability in its Q4 2017 results. The planned actions will result in annual savings of approximately EUR 30 million.

"In recent years, the demand for graphic papers has been declining—and the decline is expected to continue. Our employees have always given their best, even under challenging market conditions, and we regret the impact of the planned measures on our personnel in Dörpen and Blandin. However, we have to adjust our operations to prospective customer demand and continuously improve our operations to safeguard the success of UPM Paper ENA in the long run," said Winfried Schaur, EVP, UPM Paper ENA.

"UPM Paper ENA is committed to leading our business in a sustainable manner. Consequently, the interests of our employees and of our customers are a central part of our plans. We will engage in a fair dialogue with employee representatives. At the same time, we will continue delivering products of the highest quality and full service at all times during this process," said Ruud van den Berg, SVP, Magazines, Merchants and Office Business at UPM Paper ENA.

UPM Nordland Papier manufactures coated and uncoated fine papers (WFC and WFU) with the annual capacity of 1,400,000 metric tons. Located in Northern Germany, the mill employs about 1,600 people.

UPM Blandin manufactures lightweight coated magazine and catalog printing papers with the annual capacity of 370,000 metric tons. Thee mill employs about 400 people.

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 the company’s customers' businesses, while actively fulfilling demanding environmental and social responsibility criteria. With headquarters in Germany, UPM Paper ENA employs approximately 8,000 people. 

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. UPM products are made of renewable raw materials and are recyclable. The group employs around 19,300 people and its annual sales are approximately EUR 10 billion.