UPM plans closure of its Plattling mill in Germany

Investor news 25.7.2023 11:05 EEST

UPM Communication Papers announces plans to permanently close its Plattling mill in Germany, reducing the uncoated and coated publication paper capacity by 595,000 tonnes in Europe. These plans are a continuation of necessary steps to proactively ensure competitiveness of our operations and align graphic paper capacity to a profitable customer demand.

Should the plans be implemented the number of UPM employees affected in Plattling is estimated at 401. In addition, we expect implications for the service providers on site. The participation process with the workers council will start immediately in line with local legislation.

The planned closure of UPM Plattling’s two paper machines would lead to a permanent reduction of 380,000 tonnes of uncoated publication paper and 215,000 tonnes of coated publication paper. Both paper machines are planned to stop graphic paper production by the end of 2023.

During the past 15 years the demand for graphic papers has been declining constantly and this trend is expected to continue. The decline in demand has been accentuated significantly over the course of this year. Furthermore, the long-term predictability of production factors, such as energy supply, is essential to our industry. The uncertainty about reliability and cost competitiveness of the energy supply in Germany is currently a big challenge.

“Mature graphic paper markets require continuous and relentless efforts to ensure cost competitive operations that also meet the future customer demand. UPM is committed to leading our business in a responsible manner. We respect the interests of both our workforce and our customers and consider them a central part of our plans. We recognize that today's announcement is very difficult news for our employees in Plattling. Together with the employee representatives, we will seek responsible solutions for our personnel and enter directly into a fair dialogue,” says Massimo Reynaudo, Executive Vice President, UPM Communication Papers.

The plans announced today would strengthen the overall cost competitiveness of UPM Communication Papers and are a prerequisite for consistent paper operations in the long run. UPM would recognize restructuring charges of EUR 122 million (EUR 106 million cash impact and an impairment of EUR 16 million) and an impairment of EUR 100 million of the leased CHP plant as items affecting comparability in its Q3 2023 result. The planned actions are estimated to result in annual fixed cost savings of EUR 60 million.

UPM Communication Papers prepares continuation of temporary layoffs in Finland

UPM Communication Papers plans to continue the temporary layoffs in Finland. The possible temporary layoffs could take place in several periods and would last a maximum of 90 days.

Decisions on the continuation of the possible temporary layoffs in the four mills will be taken after the consultations have been concluded. The total number of employees covered by the employee consultations is approximately 1,100.

For further information please contact:
UPM Communication Papers Stakeholder Relations, tel. +49 821 3109 225, paperinfo@upm.com

For local information please contact:
Gerhard Mayer, Process Lead, tel. +49 9931 502113
(best available from 15:30-17:00 CET)

UPM, Media Relations
Mon-Fri 9:00-16:00 EEST
tel. +358 40 588 3284

About UPM Plattling
UPM Plattling manufactures graphic papers with the annual capacity of 595,000 tonnes. Located in Bavaria, Germany the site employs around 520 people, thereof 401 UPM employees and around 120 persons at service providers on site

UPM Communication Papers
UPM Communication Papers is the world's leading producer of graphic papers, offering an extensive product range for advertising and publishing as well as home and office uses. The high performing papers and service concepts of UPM add value to our customers' businesses, while actively fulfilling demanding environmental and social responsibility criteria. With headquarters in Germany, UPM Communication Papers employs approximately 6,300 people. More about UPM Communication Papers and its products at www.upmpaper.com

Follow UPM Communication Papers on LinkedIn

We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 17,200 people worldwide and our annual sales are approximately EUR 11.7 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com

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