UPM Communication Papers announces plans to reduce its uncoated mechanical paper capacity in Germany by 270,000 tonnes annually by July 2025. The planned closure of the Ettringen paper mill would affect 235 positions, with discussions involving employee representatives starting immediately in line with local legislation. The company aims to align its paper production capacity with profitable customer demand to maintain performance, according to UPM's statement.
In addition to the Ettringen closure, UPM Communication Papers plans to implement further measures to improve operational efficiency. According to UPM, the company will streamline its organizational structures across mills in Augsburg, Schongau, Kaukas, Kymi, Rauma, Jämsänkoski, Blandin, and Caledonian. By sharing best practices and enhancing flexibility across departments, UPM intends to ensure efficient use of remaining paper assets.
UPM also plans to discontinue the Central European Mill Support (CEMS) team and restructure its Mill Sourcing and RCP Sourcing teams in response to new capacity levels. This restructuring is expected to impact 227 positions across affected mills and related functions.
In total, 462 positions are projected to be impacted by these changes. This includes 107 roles in Finland, 314 in Germany, 34 in the UK, and 7 in the USA. UPM emphasizes its commitment to handling employment impacts in a socially responsible manner, engaging in dialogue with employee representatives throughout the process.
To implement these plans, UPM expects to incur restructuring charges of Euro 74 million, including Euro 60 million in cash costs and Euro 14 million in impairments. According to UPM, the company anticipates that these measures will result in annual fixed cost savings of Euro 39 million.
