President and CEO Jussi Pesonen discussed UPM’s ongoing year at the AGM Labelstock business to be established as Label Division

(UPM, Helsinki, 27 March 2007 at 15.00) – President and CEO Jussi Pesonen assessed UPM’s ongoing year in his review at the Annual General Meeting.

“In Europe, the good demand for paper has continued, and we expect that deliveries for the full year will improve from last year.”

“We have achieved price increases in newsprint, uncoated fine papers and some speciality grades. The prices of coated fine papers have remained stable. In the current market situation, it has not been possible to raise magazine paper prices, and their price development has been clearly disappointing,” Pesonen said.

At the Annual General Meeting UPM announced that its labelstock business has been established as a separate division as of the beginning of 2007. The new Label Division consists of UPM Raflatac self-adhesive labelstock and RFID (Radio Frequency Identification) tags.

“Label business is part of UPM’s core business, and it is a strategic growth area for the company. We have invested strongly in this business in recent years, and its annual sales and result have developed favourably. Reporting the business separately will enhance transparency and facilitate the evaluation of business development for the owners,” Pesonen said.

In this connection, the Converting Division will be discontinued and the reporting of Walki Wisa will be included in other operations. In February, UPM announced that it has signed an agreement to sell Walki Wisa to funds managed by the Finnish private equity investment company CapMan. The deal is estimated to be completed during the second quarter of 2007.

The key figures for 2005 and 2006 for the Label Division and the reorganised other operations are included in the enclosed appendix.

The CEO’s address to the AGM is available in full at www.upm-kymmene.fi > Investor Relations.