Helsinki, Finland, 10 September 2008 – UPM will adopt a completely new business structure during the autumn. In the future the company will consist of three Business Groups: 1) Energy and Pulp, 2) Paper, and 3) Engineered Materials. Previously the company consisted of five divisions. The change will take effect 01 December 2008. The current organization will continue until then.

"Changes in the business environment have continued and intensified," said Jussi Pesonen, president and CEO of UPM. "UPM responds to these challenges with a new business structure which improves our capability to leverage the company's competitive advantages. Our target is to create a structure and leadership model which sets the basis for strong, market driven operations in all the three business groups."

The Energy and Pulp Business Group consists of pulp mills in Finland, hydropower assets, and shares of associated pulp and energy companies. The Business Group is also responsible for forests and wood sourcing and the timber business. Biofuels business will be a part of this entity and their development belongs to this Business Group.

Tapio Korpeinen has been appointed president of the Energy and Pulp Business Group. "We have taken pioneering steps and invested heavily in this area. The results are convincing. Growth and development prospects continue to be interesting. We want to take a more market driven approach to these business areas and also increase their transparency towards the investors," Korpeinen said.

Paper Business Group consists of magazine, fine, and speciality paper, and newsprint businesses. Jyrki Ovaska has been appointed president of Paper Business Group. "Combining the current three paper divisions enables faster decision making and more streamlined processes. To improve our profitability we will develop new customer-focused operating modes and intensify our supply chain management. UPM has a unique opportunity to strengthen the cost leadership by optimizing resources, production, and investments," Ovaska said.

Engineered Materials Business Group consists of self-adhesive labelstock, plywood, wood plastic composite, and RFID business areas. Jussi Vanhanen has been appointed president of the Engineered Materials Business Group. "UPM intends to increase the weight of fast growing higher added value businesses in the company. Important is that these business areas build on the company's proprietary know-how. Leveraging growth opportunities in these business areas requires high level of agility and flexibility but also a committed growth strategy," Vanhanen said.

Group Executive Board and Executive Team

The new Executive Board consists of the President and CEO, the three Business Group Presidents and Jyrki Salo, Executive Vice President, CFO. Jyrki Salo's resposibilities will also include Information Technology, Logistics and Global Sourcing.

Besides the persons mentioned above, the Executive Team consists of the following members as of 01 December 2008:

Changes in reporting segments

After the new business structure takes effect, the company will report financial information for the following segments: Energy, Pulp, Forest and Timber, Paper, Label Materials, Plywood, and Other operations. Energy and Pulp include shares of corresponding associated companies.

UPM will report the results for 2008 according to the new structure on 05 February 2009. Comparable financial figures for Q107–Q308 will be published in December 2008.