Finland-based company UPM has announced plans to slash the production of printing and writing paper by around 580,000 metric tons. The cuts will take place at its mills in Finland, Germany and France.
The company cited the continued decline in demand for printing and writing paper and significant overcapacity throughout Europe as reasons for the cuts.
Additionally, UPM has recently announced plans to cut production of coated magazine paper by around 270,000 metric tons per year at its UPM Stracel paper mill in France. Combining the cuts at Stracel and the new cuts UPM will be removing around 850,000 metric tons of capacity in early 2013.
The most recent announced cuts include the following:
- the permanent closure of paper machine 3 at UPM Rauma mill in Finland;
- the permanent closure of paper machine 4 at UPM Ettringen in Germany;
- the sale or other exit of UPM’s Docelles mill in France; and
- subject to further analysis, streamlining in the paper business and UPM’s global functions.
According to UPM’s plan, its Rauma and Ettringen machine lines, which both produce uncoated magazine paper, will be permanently closed during the first half of 2013. Closing the two machines will remove around 420,000 metric tons per year from the market.
UPM says its plan to sell its Docelles mill in France will start immediately and is expected to be complete within six months. Docelles produces around 160,000 metric tons of uncoated woodfree papers per year.
“The target of the planned actions is to ensure the efficient use of UPM’s remaining capacity,” says Jyrki Ovaska, president of the UPM Paper Business Group. “The paper machines targeted for closure are either at the end of their technical age, have limited product flexibility or poor profitability. The situation is very regrettable for the personnel. However, in the overcapacity situation we need to adjust our capacity to the level of profitable customer demand.”