Employee negotiations concluded at UPM's Kajaani mill in Finland, local collective labour agreement negotiations continue

(UPM, Kajaani, February 14, 2008 at 14.30) – Employee negotiations at UPM's Kajaani mill have been concluded. Negotiations were carried out locally in a serious but open and constructive atmosphere. In the negotiations, options were clarified to improve the cost competitiveness and operational efficiency of the Kajaani mill, and to realise a temporary shutdown of the paper machine 4 for 10 months. The employee negotiations covered all personnel groups at the mill.

In order to improve cost efficiency, UPM's Kajaani mill will restructure its production and maintenance and related support functions. This will reduce the personnel by 27 office employees and an estimated 47 workers. Local collective agreement negotiations, which were carried out in parallel with the employee negotiations, still continue. Therefore, the total amount of persons without a job will not be known before the local collective agreement negotiations have been concluded at the end of March.

On December 17, 2007, UPM announced that it will reduce its standard newsprint production capacity in 2008 by 250,000 tonnes. As a part of this announcement, the paper machine 4 at the Kajaani mill will be temporarily shut down for 10 months starting on February 26, 2008. Temporary lay offs resulting from the temporary closure correspond to the work input of 30 employees. When the negotiations started, the temporary closure was estimated to impact approximately 110 persons.

Due to the plan to arrange summer holiday replacement with the mill's own employees, the actual temporary lay off periods at personal level will be shorter than 10 months.

Persons who remain without a job or are temporarily laid off will be prioritised when filling UPM's vacancies considering that the person is suitable for the job and has necessary skills.

Capacity reduction at the Kajaani mill's paper machine 4 is resulting from the newsprint market situation, the mill's cost competitiveness, availability of wood raw material and cost development of wood and energy in Finland.

"I am pleased with the cooperation with personnel groups during the negotiations. Our common target is to ensure the future of the Kajaani mill. These decisions are not easy but necessary. Now we need to concentrate on concluding the ongoing local collective agreement negotiations, which have a significant role in improving the cost efficiency and competitiveness of the mill. Our work to ensure the restart of the paper machine 4 and the future of the mill continues," says General Manager Kari Pasanen.

UPM's Kajaani mill employs 577 people.

For more information, please contact:
Mr Kari Pasanen, General Manager, UPM, Kajaani, tel. +358 204 14 2100