The continuing challenges in European economy have significantly impacted the consumption of paper, exacerbating the effect of structural changes in paper end-uses and resulting in further decline in the demand of graphic papers in Europe. High costs and significant overcapacity continue to challenge the industry operators in Europe.
UPM is planning to permanently reduce paper capacity in Europe by a further 580,000 tonnes. The capacity reductions are planned to take place in Finland, Germany and France. The business environment also makes evident the need for streamlining of the Paper Business Group and UPM's global functions to remain cost competitive in the new business scale. In early January, UPM finalized the employee consultation process in UPM Stracel, France, implying reduction of 270,000 tonnes of coated magazine paper capacity (coated mechanical paper). With UPM Stracel and today's plans, UPM would reduce a total of approximately 850,000 tonnes of graphic paper capacity in 2013.
UPM plans:
A permanent closure of paper machine 3 at UPM Rauma mill in Finland (SC paper)
A permanent closure of paper machine 4 at UPM Ettringen in Germany (SC Paper)
A sale or other exit of UPM Docelles mill in France (uncoated woodfree paper), and
subject to further analysis, streamlining in the Paper Business and UPM's global functions.
According to the plan the Rauma and Ettringen machine lines would be permanently closed by the end of first half of 2013. Both machines are producing uncoated magazine paper, in total 420,000 tonnes annually.
The process for selling the UPM Docelles mill will start immediately. The process will be given maximum six months. Docelles is producing uncoated woodfree papers, 160,000 tonnes annually.
