UPM to enhance its competitiveness in uncoated magazine paper

UPM will enhance its competitive position in uncoated magazine papers (SC papers) by launching a programme to reduce the unit costs in magazine paper production and improve the company's profitability. The programme will reshape the division of work between the production lines in different countries. In conjunction with the programme, closures and conversions of older paper machines will take place. The programme also includes an investment in a new paper machine producing SC magazine papers in Continental Europe.

The location of the new machine will be determined by the end of this year. The investment assessment includes the Augsburg and Schongau mills in Germany as well as the Stracel mill in France. The new machine will have an annual capacity of approximately 400,000 tonnes of state-of-the-art SC-A paper. The target is to start up the machine during the last quarter of 2007.

Details of the restructuring plan will be finalized within next 12 months. With the restructuring programme and the investment, UPM's production capacity of magazine papers will increase by approximately half of the new machine's capacity.

Uncoated magazine paper is one of UPM's core business areas. The measures will reinforce UPM's global leadership in magazine papers and allow meeting the growing demands for quality. In addition, the measures will create good opportunities for developing service close to the Central European customers.


For further information, please contact:
Mr Jyrki Ovaska, President, UPM Magazine Papers Division, tel. +358 204 15 0564
Mr Kari Toikka, CFO, UPM, tel.+358 204 15 0014


UPM
Corporate Communications
August 12, 2005