"Competition law issues must be taken extremely seriously," says Vesa Vainio, Chairman of UPM Board of Directors

(UPM, Helsinki, November 20, 2006) – UPM's former President and CEO Juha Niemelä has strongly criticised UPM's Board of Directors and in particular its Chairman Vesa Vainio with respect to competition law issues.

According to Vesa Vainio, the process which led to the Board of Directors' decision to contact competition authorities, started in the spring of 2003. The Board of Directors made the final decisions in January 2004. The Board of Directors, including Juha Niemelä, then a member of the UPM Board, handled competition law issues several times during this period. The UPM Board had two objectives: to assure the legality of the company's operations and to safeguard shareholders' interests against financial risks.

"The Board of Directors had at the time, as it still has today, a clear understanding of the fact that the company cannot participate in "discussing competitive community" as described by Juha Niemelä in public. This kind of behaviour is not part of today's business practice. To UPM, legality and acceptability of operations is an essential value and must be visible in all our operations", says Vesa Vainio.

According to Vainio, competition law issues must be taken extremely seriously. As an example he mentions the investigation concerning antitrust activities in plastic industrial sack markets, started by the EU commission in June 2002. As for UPM, the EU investigation focused on the time before the year 2000. After completing the investigation, the European Commission imposed UPM a fine of EUR 57 million concerning antitrust activities in the market for plastic industrial sacks. UPM has appealed against the decision.

The competition authorities have announced that investigations concerning various products have been completed but they have not announced the grounds for their decisions. The authorities continue certain investigations. UPM continues to cooperate with the competition authorities and due to ongoing process the company and its employees are not able to comment the case.