UPM-Kymmene signs a letter of intent in ChinaUPM-Kymmene signs a letter of intent in ChinaChangshu project constantly reviewed

UPM-Kymmene Corporation has signed a letter of intent to establish a joint venture company in Zhanjiang, Guangdong Province, in China. The task of the joint venture company will be to investigate and make preparations for wood supplies for a possible future pulp mill.

In the first phase the company will concentrate on forestry operations in Zhanjiang region. The total cost of this will be USD 44 million, of which UPM-Kymmene's share of USD 20 million will be spread over many years.

Besides UPM-Kymmene the joint venture parties will be China Fuxing Pulp and Paper Co. Ltd and Guangdong Finance Investment (Holding) Corporation Ltd. UPM-Kymmene and China Fuxing Pulp and Paper each will have a 45% share and Guangdong Finance Investment (Holding) 10% share in the joint venture. China Fuxing Pulp and Paper Co. Ltd is a state-owned investment company for pulp and paper industry, while Guangdong Finance Investment (Holding) Corporation Ltd is an investment company owned by the Guangdong provincial authorities.

The decision on the pulp mill will be made separately. The decision and the timetable will depend on the progress made in the forestry operations. The project is subject to the approval of relevant Chinese government authorities.

UPM-Kymmene constantly reviews the status of the Changshu project

As the large-scale implementation of the Changshu fine paper machine project may prove difficult due to the SARS epidemic, UPM-Kymmene will constantly monitor and review the project status and will not make financial or time commitments to the project until further notice.


For further information please contact:
Forestry project: Mr Heikki Sara, Executive Vice President, Strategic Development,
UPM-Kymmene, tel. +358 204 15 0040
Changshu: Mr Jussi Pesonen, Senior Executive Vice President & COO, UPM-Kymmene,
tel. +358 204 15 0582

UPM-Kymmene Corporation
Corporate Communications
May 20, 2003