Helsinki (News release) - UPM continues to selectively align its paper capacity with profitable customer demand to ensure performance and therefore plans to permanently close its paper mill in Ettringen, Germany, reducing the annual capacity of uncoated mechanical paper by 270,000 tonnes during July 2025.

Should the plans be implemented the number of positions affected in Ettringen is estimated at 235. The participation process with the workers council will start immediately in line with local legislation.

"In a dynamically changing market that has been characterized by overcapacity for years, operational competitiveness is key to underpinning our long-term commitment to the still sizeable graphic paper markets and remaining the reliable partner our customers know us to be," says Gunnar Eberhardt, Executive Vice President, UPM Communication Papers.

"With the plans announced today, we are continuing to selectively adjust our paper capacity to a profitable customer demand. This would ensure an efficient and flexible use of our remaining paper assets. While we see these planned changes to be necessary to safeguard our strong position and future, we are aware that today's announcement demands much from our employees in Ettringen. We aim to handle the restructuring measures in a socially responsible way and will engage now into dialogue with employee representatives," says Gunnar Eberhardt.

Additional measures with clear focus on operational efficiency

As one of the largest and most committed producers of graphic papers, UPM Communication Papers is constantly working to remain relevant and competitive in the long term. Even when production capacities must be adjusted to meet customer demand, the global paper market remains sizeable, presenting opportunities for agile and competitive players.

By benchmarking and sharing best practices across all mills, UPM Communication Papers aims to enhance efficiency, improve cross-departmental flexibility, and streamline organizational structures within its mill operations in Augsburg, Schongau, Kaukas, Kymi, Rauma, Jämsänkoski, Blandin and Caledonian.

In addition, UPM sees further optimization potential by centralizing processes and organizational structures within logistics operations in the German mills.

In order to realize further benefits of a scalable and efficient Sourcing organization, we plan to discontinue the Central European Mill Support (CEMS) team and streamline our Mill Sourcing and RCP Sourcing teams according to new capacities.

All affected mills and functions will follow up with their own implementation steps during 2025, and we are committed to working closely with affected employees, handling possible employment actions in accordance with local legislation. According to the plans, we estimate approximately 227 positions to be affected in our mill organizations and functions.

"With the planned measures we improve cost efficiency and competitiveness, while ensuring a reliable supply from our production locations in Finland, Germany, the UK and the USA, " says Antti Hermonen, Senior Vice President Operations, UPM Communication Papers.

Considering all planned changes announced today by Communication Papers, there would be a total of 462 positions impacted, thereof 107 in Finland, 314 in Germany, 34 in the UK and 7 in the USA

These plans are a continuation of necessary steps to proactively align with customer demand and ensure competitiveness. UPM would recognize restructuring charges of EUR 74 million (EUR 60 million cash impact and an impairment of EUR 14 million) as items affecting comparability in its Q1 2025 result. The planned actions are estimated to result in annual fixed cost savings of EUR 39 million.