UPM-Kymmene to invest EUR 84 million in Wood Products business

UPM-Kymmene is to invest EUR 84 million in raising the competitiveness of its wood products business. The investment includes acquisition of the company Aureskoski Oy and modernizations and improvements for UPM-Kymmene's Wood Products division, covering United Sawmills Ltd's sawmills and Schauman Wood Oy's Pellos plywood mill.

On 7 June, United Sawmills Ltd signed an agreement to purchase the share capital of Aureskoski Oy. The acquisition will improve United Sawmills' production efficiency and customer service. Aureskoski's substantial further processing operations will bring United Sawmills important additional capacity and knowhow in this sector and provide synergies for the entire UPM-Kymmene Wood Products division. Aureskoski's sawmills have a combined annual capacity of around 300,000 m3 of sawn timber, of which 100,000 m3 are further processed goods. In 1999, the company had a turnover of EUR 72 million and employed 260 people.

UPM-Kymmene Wood Products will develop its sawmilling operations in western Finland by investing EUR 25 million in modernizing United Sawmills Ltd's Seikku sawmill. The mill's log infeed system, sawing, dimension grading and sticking facilities will all be rebuilt during 2000-2001. The exact division of production between Aureskoski and United Sawmills will be decided later, but there are plans for Seikku sawmill to specialize in whitewood production and Aureskoski sawmill to specialize in redwood. This will allow flows of raw material to be directed more effectively, while specialization will make production more efficient. Greater efficiency levels will reduce workforce requirements for United Sawmills in western Finland and also for Aureskoski Oy. The final employee numbers will be decided on in local talks between employees and management.

In eastern Finland, UPM-Kymmene Wood Products is to invest EUR 25 million in expanding production of conifer plywood and processed products at Schauman Wood's Pellos plywood mill by 180,000 m3. For its part, United Sawmills will make substantial investments in sawn timber production. This will include increasing production at Kaukas sawmill to 500,000 m3 and at Heinola sawmill to 140,000 m3. The future prospects for production at Kuopio sawmill will be investigated as part of UPM-Kymmene Wood Products' investment plans. In this connection, employee-management talks will be started at Kuopio to decide the future of sawmilling there.

UPM-Kymmene Wood Products is Europe's largest plywood manufacturer and one of Europe's biggest producers of sawn timber. In 1999, the division produced almost two million cubic metres of sawn timber and around 730,000 cubic metres of plywood. UPM-Kymmene Wood Products comprises United Sawmills Ltd, Schauman Wood Oy, Puukeskus Oy, Brooks Group Limited (Ireland and Great Britain) and ANCO Trae A/S (Denmark). UPM-Kymmene Wood Products had a turnover of EUR 1,301 million in 1999 and has 6,700 employees.

For more information contact:
Kari Anttilainen, Managing Director, United Sawmills Ltd,
tel. +358 204 15 0663, GSM +358 400 322 301
Arto Juvonen, Managing Director, Schauman Wood Oy,
tel. +358 204 15 6408, GSM +358 400 557 035