Employee consultations for UPM Communication Papers were concluded at the Jämsä River mills this week. The UPM Kaipola paper mill in Jämsä, Finland,

will be closed permanently by mid-December. UPM’s second paper mill in Jämsä, UPM Jämsänkoski, will continue operations with one graphic paper machine and two specialty paper machines.

The parties were not able to identify an economically viable solution for the future operation of UPM Kaipola. Consequently, Kaipola’s three paper machines will be permanently closed, affecting altogether 448 positions at the mill, of which 20 positions will be transferred to UPM Jämsänkoski’s Specialty Papers operations. Approximately 20 % of the redundancies will be retirements, with discussions pending. The closure will lead to an annual reduction of 720,000 tonnes of graphic paper capacity, thereof 450,000 tonnes of newsprint and 270,000 tonnes of coated mechanical paper. An after-care team will ensure safe conditions at the mill after the closing.

The decisions were based on thorough assessments of graphic paper demand, global economic development and the local operating environment. Global demand for graphic paper has been declining consistently for years. In addition, the COVID-19 pandemic and related measures have caused a short-term disruption in demand and weakened the overall economic outlook.

There have been enquiries from companies in different sectors concerning the UPM Kaipola site. UPM is looking into these enquiries. Further, UPM is participating in the cooperation group for sudden restructuring set up by the the city of Jämsä and is cooperating with authorities from the Finnish Ministry of Employment and Economy.

The actions announced today strengthen the overall cost competitiveness of UPM Communication Papers and are a prerequisite for consistent profitable performance in the long run. As items affecting comparability in Q3 2020, UPM recognizes restructuring charges in total of EUR 99 million, whereof EUR 38 million as cash costs. The actions will result in annual savings of EUR 47 million.