Helsinki (News release) - Driven by structural overcapacity in the graphic paper markets and the need to ensure long-term competitiveness of its operations, UPM Communication Papers plans to end paper production at UPM Kaukas paper mill, Finland, reducing the annual production capacity of coated mechanical paper by 300,000 tonnes.
The shutdown of the paper machine (PM 1) is planned for the end of the year 2025. UPM's pulp, sawn timber and biofuels production and R&D activities at UPM Kaukas integrate will continue as before.
Decisions on final plans would be made after the co-determination processes have been concluded in line with local legislation in Finland. Should the plans be implemented the number of employees affected at UPM Kaukas paper mill is estimated at 220.
"UPM is well positioned to grow in several segments, while global demand for graphic paper continues to decline due to digitalization, macroeconomic challenges, and changing consumer habits. The planned steps announced today will enable a healthier capacity utilization and support our overall cost structure and competitiveness in the global graphic paper markets. We are aware that these plans will have a big impact on our committed employees in Lappeenranta and we will find solutions according to local practices. UPM will engage now into dialogue with employee representatives," says Gunnar Eberhardt, Executive Vice President, UPM Communication Papers.
"Our employees across mills work hard to ensure excellent performance of our machines, also at UPM Kaukas. Unfortunately, the market development requires steps such as this plan, which is a continuation of difficult but necessary steps to proactively ensure competitiveness of our overall paper operations. With the plan to shift UPM's coated mechanical paper production in Finland from Kaukas to our Rauma mill, we are striving to optimize the asset structure and improve cost efficiency, particularly in our production and logistics processes," says Antti Hermonen, Senior Vice President Operations, UPM Communication Papers.
UPM would recognize restructuring charges of €78 million (€35 million cash impact and an impairment of €43 million) as items affecting comparability in its Q3 2025 result. The planned actions are estimated to result in annual fixed cost savings of €32 million.
