UPM to temporarily reduce its sawmilling and plywood capacity in Finland in 2009

(UPM, Helsinki, 28 October 2008 at 9.35) – UPM plans to temporarily reduce its sawmilling and plywood production capacity in 2009. UPM will begin employee negotiations on a plan to temporarily reduce sawn and processed timber products production at all the company's production units located in Finland. The main reason for the capacity reduction is still weakening market situation. The production reductions at each mill will be carried out according to plan made separately for each mill. The employee negotiations on production reductions and the possible temporary layoffs will start immediately. Approximately 800 people are affected by the negotiations.

In addition, UPM plans temporary layoffs at its Heinola plywood mill. The company will begin employee negotiations due to the quickly weakened market situation in birch plywood. The whole mill and all employee groups are affected by the employee negotiations. The possible layoffs in Heinola are estimated to last over 90 days.

UPM Timber supplies sawn timber and further processed timber products to the building, construction and joinery industries. Annual production capacity is 2.4 million cubic metres of WISA timber products. UPM Timber has 16 production units in Austria, Finland, France and Russia. In Finland, UPM operates seven sawmills which are located in Lappeenranta, Kajaani, Pietarsaari, Korkeakoski, Heinola, Pori and Leivonmäki. Earlier this year UPM announced the closure of the Leivonmaki sawmill by the end of the year. UPM Timber employs 1,350 people.

Heinola plywood mill produces refined WISA plywood for mainly concrete product, building and parquet industries. The annual production capacity is approximately 50,000 cubic metres of birch plywood. The number of employees is 230 people.

For more information, please contact:
Sawmills: Mr Arto Halonen, Vice President, Operations, Timber Business, tel. +358 40 823 2877
Plywood: Mr Kari Hyvönen, Vice President, Operations, Plywood Business, tel. +358 400 258293