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UPM Raflatac plans to invest new production capacity in filmic labelstock and restructure sheet labelstock businesses in Europe

Investor news 24.4.2014 14:15 EEST

(UPM, Helsinki, 24 April 2014 at 14:15 EET) – UPM Raflatac plans to increase production capacity for its film labelstock business in Europe by investing approximately EUR 13 million in a new coating line at the company’s self-adhesive labelstock factory in Nowa Wies, Poland. This initiative will support UPM Raflatac’s target to secure cost competitive growth in films in the long term. The start-up of the new assets is estimated to take place in Q1/2015. Following the planned investment, an older film coating line in Tampere, Finland and the UPM Raflatac siliconising line in Tervasaari, Finland will be closed.

In addition, UPM Raflatac plans to improve productivity in its sheet labelstock business by closing sheet labelstock coating operations and reducing capacity in sheets finishing in Polinya, Spain. The sheet coating will be centralized to Nowa Wies.

The planned actions are estimated to result in annual cost savings of about EUR 4 million starting from 2015 and exceeding EUR 6 million in 2016.

If all plans are implemented, the estimated total personnel impact would be a maximum of 122 positions in the affected countries: a maximum of 86 positions in Spain and a maximum of 36 positions in Finland. The final decisions will be taken after employee consultation and negotiations in the relevant countries. The majority of restructuring is estimated to be completed by the end of 2014.

“In our film business we have enjoyed robust growth in Europe in recent years and therefore we are planning to increase filmic coating capacity in Nowa Wies, Poland. The majority of the film market is in Central and Southern Europe and with this capacity we will be able to serve our customers in those market areas better in future. According to the plan, we aim to streamline our capacity in Tampere, Finland to meet the needs of the reduced service area”, says Tapio Kolunsarka, Executive Vice President, UPM Raflatac.

“In past years, the sheets market has been affected by changes in customer buying behaviour and the market segment has been stagnating. As a consequence we have seen a sharp increase in competition in the market and thus we are planning to centralize sheet production to Nowa Wies, Poland to be able to remain competitive in this segment in the future.”

“After these planned changes in our manufacturing and supply chain platform in Europe, we will have a highly productive capacity serving each of our key product segments with sufficient capacity to meet the needs of the future”, Tapio Kolunsarka concludes.

In Q2/2014 UPM will book a EUR 3 million write-off from fixed assets and restructuring costs of EUR 8 million. These initiatives will support UPM’s growth target of adding EUR 200 million of EBITDA in the coming three years.

For further information, please contact:
Mr Tapio Kolunsarka, Executive Vice President, UPM Raflatac. tel. +358 40 5500 953
(at 15-16 CET)
Mr Jussi Oksanen, Vice President, Film & Special Business, EMEA, UPM Raflatac, tel. +358 40 5328 643 (from 16 CET on)
Mr Mauri Suomela, Vice President, Paper Business, EMEA, UPM Raflatac, tel. +34 66 9588 319
(from  15 CET on)
Mr Juha Virmavirta, General Manager, UPM Raflatac Tampere, Finland, tel. +358 40 5047 899
(from 15 CET on)
Mr Jari Peltonen, General Manager, UPM Raflatac Ibérica, Spain, tel. +34 680 44 96 91
(from 15 CET on)
Mr Jani Konkarikoski, General Manager, UPM Raflatac Poland, tel. +48 60 5430 332
(from 15 CET on)

UPM Raflatac
UPM Raflatac is one of the world’s leading producers of self-adhesive label materials. We supply high-quality paper and film labelstock for consumer product and industrial labelling through a global network of factories, distribution terminals and sales offices. We employ around 2,900 people and made sales of EUR 1.2 billion (USD 1.6 billion) in 2013. UPM Raflatac is part of UPM – The Biofore Company. Find out more at www.upmraflatac.com.

Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The Group employs around 21,000 people and our annual sales are approximately € 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM – The Biofore Company – www.upm.com