Nov 03, 2009. /Lesprom Network/. UPM plans to permanently close the plywood mill and sawmill in Heinola, the Kaukas plywood mill in Lappeenranta, and the further processing mill in Parkano during the first half of 2010, the company said in a press release received by Lesprom Network. Furthermore in the plywood business area, the company plans to discontinue weekend shifts in most of the Finnish mills as well as to streamline the organisation of office employees. In addition, the production of the Kaukas further processing mill in Lappeenranta will be restructured. If the restructuring is realised according to these plans, the amount of UPM employees will decrease by approximately 870 persons, of which approx. 650 work in units planned to be permanently closed. The restructuring costs are estimated to be approximately Euro 44 million including impairment charges of approximately Euro 11 million. In addition, UPM plans to invest approximately Euro 25 million in the expansion of the Savonlinna plywood mill and the development of the production in the Kaukas sawmill and the Aureskoski further processing mill. If the plans materialise, the Savonlinna plywood mill will become the world's most efficient birch plywood unit with an annual production capacity of 120, 000 cubic metres of high quality birch plywood. The Heinola plywood mill has been at a standstill since January and the Kaukas plywood mill since May this year. The employees of both of the mills have been temporarily laid off during the standstills. The Kaukas plywood mill employs 298 persons and the Heinola plywood mill 212 persons. The Heinola sawmill and the Parkano and Kaukas further processing mills have had production curtailments during the whole year. The Heinola sawmill employs 77, the Parkano further processing mill 64 and the Kaukas further processing mill 25 persons. "In the future, UPM would operate four modern plywood mills and two veneer mills, five sawmills and three further processing mills in Finland. We have here very good know-how and a stabile operating environment. The planned actions improve our ability to respond to our customers' needs as the market picks up again. UPM will be the leading European plywood supplier also in the future", says Vanhanen. UPM's plywood business employs currently 2,450 persons in Finland whereas timber employs around 900 persons. If the measures materialise as planned, the number of employees in the plywood business will decrease by around 710 persons and by 160 in the timber business. The timber business will also start co-operation negotiations with employees in all the other Finnish units on continuing temporary production curtailments in 2010. UPM estimates the restructuring costs for the 4Q 2009 to be in the plywood business approximately Euro 30 million, including approximately Euro 24 million cash impact. In timber business the cost is estimated to be approximately Euro 14 million, including approximately Euro 9 million cash impact. The first results of the co-operation negotiations can be expected at the beginning of 2010.