UPM permanently closes down paper machine 2 at UPM Kaukas and paper machine 5 at UPM Jämsänkoski in Finland, along with paper machine 1 at the UPM Shotton mill in the UK. Production will be ceased by the end of March 2015 at the latest. Employee consultation processes concerning the closing plans were concluded in mid-January 2015. The employee consultation process concerning the planned closure of the paper machine 3 at UPM Chapelle in France, also announced in November, is proceeding.
The number of positions is reduced by 114 at the Kaukas mill in Lappeenranta, by 138 at the Jämsä River Mills and by 121 at Shotton. The consultations covered among others reasoning for personnel reductions, schedule and change support for those made redundant. All of the mills will continue paper production on the remaining paper machines. Along with the closures, UPM reduces its coated and uncoated magazine paper capacity by approximately 460,000 tonnes and its newsprint capacity by 215,000 tonnes.
As planned, the company also continues centralising its Supply Chain operations in Paper ENA (Europe and North America) and transfers Supply Chain planning and order fulfillment activities from Tampere in Finland and Altrincham in the UK to Augsburg and Dörpen in Germany. Customer service continues in the current locations. The change concerns 48 positions in Tampere Supply Chain Centre and 11 positions in Altrincham. The company supports Supply Chain employees transferring to Germany.
“These decisions are unfortunate for the personnel involved, and the past months have been challenging for all of us. From the business point of view, the measures taken are necessary to improve our operating rates and profitability in the European paper business, which still suffers from overcapacity. By reducing capacity we ensure the efficient use of our remaining machines in Europe,” says Bernd Eikens, Executive Vice President, UPM Paper ENA.
The announced decisions are part of UPM’s EUR 150 million profit improvement target introduced in November 2014 . The full profit improvement programme includes variable and fixed cost savings in all UPM businesses and functions.