UPM Communication Papers plans to cease paper production at its Kaukas mill in Lappeenranta by the end of 2025, removing 300,000 tonnes of annual coated mechanical paper capacity and transferring the company’s Finnish production to its Rauma mill. The move comes as UPM reports a 31% drop in earnings in Q2 2025, citing weaker pulp and paper demand. The shutdown would impact approximately 220 employees, according to UPM.
This planned closure targets structural overcapacity in global graphic paper markets and is part of UPM’s effort to enhance long-term cost efficiency. Paper machine PM 1 at Kaukas is the sole unit affected. Other operations at the Kaukas integrated site, including pulp, sawn timber, biofuels, and R&D, will continue unchanged. UPM stated that final decisions will follow the completion of co-determination talks with employee representatives, as required by Finnish legislation.
UPM said the move is necessary due to declining demand for graphic papers, which has been accelerated by digitalization, macroeconomic conditions, and evolving consumer behavior. The transfer of production to the Rauma mill is intended to optimize UPM’s asset structure and reduce costs across production and logistics processes.
As part of this restructuring, UPM will recognize Euro 78 million in charges in its Q3 2025 financial results, including a Euro 35 million cash impact and a Euro 43 million impairment. The company expects these changes to deliver Euro 32 million in annual fixed cost savings.
