Helsinki, Finland, 15 January 2012 -- UPM will permanently close down its unprofitable Albbruck paper mill in Baden-Württemberg, Germany. The discussions between UPM, employee representatives, and local authorities did not lead to a solution for continuing the operations at the mill. Neither was the search for an investor successful. The closure of the mill will affect the 508 employees of the mill. The personnel reductions will take place on 31 January 2012.

“UPM Albbruck mill has been making a loss for several years due to the age and relatively small size of the machines, and the mill is not cost competitive within UPM asset and global customer portfolio. Under the difficult circumstances, the highly qualified employees have done an excellent job. Unfortunately, it would not have been possible to improve the mill’s profitability to an extent that would have allowed sustainable operations,” said Jyrki Ovaska, president, UPM’s Paper Business Group.

During the negotiations concerning reconciliation of interest and social plans, issues such as pension schemes, support for re-employment, relocations within the company, re-training, and compensation payments were discussed and agreed to.

“We understand the disappointment of the Albbruck mill employees. All the participants of the roundtable discussions have done their utmost to find a future-oriented concept for the mill. Despite this strong commitment of people involved, no solution could be found as the concepts presented by potential investors were not economically sound. UPM will implement a social plan in order to alleviate the effects caused by personnel reductions in a responsible way,” said Hartmut Wurster, executive vice president, who represented UPM during the roundtable discussions.

The sheeting lines of the mill will be transferred to the company’s paper mill in Plattling to complement UPM’s product portfolio. “UPM sees the coated mechanical sheets as solid business, and is committed to serve the customers after the Albbruck closure smoothly and promptly,” Ovaska said. Approximately 30 new positions will be created through this measure and applications from Albbruck specialists will be prioritized .

UPM will participate in the follow-up of the roundtable discussions about the possible future use of the mill premises. The discussions will be led by the local Chamber of Commerce. “The aim of this forum is to find development ideas and business opportunities for the site. We have already been contacted by companies who are potentially interested in the industrial use of the mill premises,” Wurster said.

The Albbruck decision finalizes the paper capacity closure plans that were announced by UPM in August 2011. The UPM Albbruck paper mill manufactures coated magazine papers, including sheet-fed. Its three production lines have a combined annual capacity of 320,000 metric tons. The mill was founded in 1882 and is located in southern Germany. UPM Myllykoski paper mill in Finland, with capacity of 600,000 metric tons of magazine papers, was closed down on 09 December 2011, and PM 3 at the UPM Ettringen paper mill in Germany, with capacity of 110,000 metric tons of newsprint, was closed down on 14 December 2011.