UPM Paper ENA plans to reduce graphic paper capacity and optimize operations to increase competitiveness
25 October 2017
In light of the global market situation for graphic papers, and to sustain its competitiveness and leading position in the market, UPM Paper ENA plans to:
- optimize operations at its UPM Nordland Papier and UPM NorService units in Dörpen, Germany, Europe's biggest fine paper site. Streamlining internal processes and investing in automation will enable a sustainable improvement of the fixed cost structure.
- permanently close paper machine 5 at UPM Blandin in Minnesota, United States, reducing the annual capacity by approximately 128,000 tons of coated magazine paper in response to overcapacities in the North American paper market. The closure is expected to be completed by end of Q1 2018 the latest. Paper production related to paper machine 6 is planned to continue at the Blandin site.
In total 223 positions are estimated to be affected by these plans in Dörpen at UPM Nordland Papier and UPM NorService. At UPM Blandin, it is estimated that 150 positions will be affected by the plans. Employment related actions in Blandin will start with immediate effect and will be handled in accordance with federal and state statutory requirements; the employee consultation process in Dörpen will start in November in line with local legislation.
UPM will recognize restructuring charges of approximately EUR 35 million as items affecting comparability in its Q4 2017 results. The planned actions will result in annual savings of approximately EUR 30 million.
"During the last years the demand for graphic papers has been declining - and the decline is expected to continue. Our employees have always given their best, even under challenging market conditions, and we regret the impact of the planned measures on our personnel in Dörpen and Blandin. However, we have to adjust our operations to prospective customer demand and continuously improve our operations to safeguard the success of UPM Paper ENA in the long run," says Winfried Schaur, Executive Vice President, UPM Paper ENA.
"UPM Paper ENA is committed to leading our business in a sustainable manner. Consequently, the interests of our employees and of our customers are a central part of our plans. We will engage in a fair dialogue with employee representatives. At the same time we will continue delivering products of the highest quality and full service at all times during this process," says Ruud van den Berg, Senior Vice President, Magazines, Merchants and Office Business at UPM Paper ENA.