<B>Finnish Paper Company Forecasts Strong Second Half</B>

Finnish company UPM-Kymmene announced first-half profits more than doubled and said demand for forest products remained buoyant. Profits before extraordinary items rose to $904.5 million through the first six months. Net sales rose 17 percent in the first half of the year compared to the same period last year.

UPM said demand for forest products remained buoyant and deliveries in the months ahead would stay high, confirming the picture of a strong overall market shown by other Nordic paper producers, including European leader Stora Enso .

Excluding capital gains, operating profits for the second quarter rose 66 percent year-on-yea, but slipped below the first quarter figures due to costs of maintenance, stoppages, and a mill workers' strike.

"Minimal additional capacity coupled with strong demand is likely to sustain the favorable trend in paper prices. Delivery volumes are expected to be at a high level in the coming months," the company said.

Paper production in the six months totaled 3.9 million metric tons, up 11 percent on a year ago, and the average operating rate rose to 94 percent from 86 percent.