Moscow. Jan 12, 2010. /Lesprom Network/. In November 2009, UPM announced plans concerning significant restructuring of its Plywood and Timber operations to ensure their competitiveness in Finland. The measures now decided include centralising operations and investing in the more competitive Finnish units, the company said in a press release received by Lesprom Network. In negotiations with the employees, financial prerequisites could not be found to continue the operations at the plywood mills in Heinola and Kaukas in Lappeenranta, the sawmill in Heinola, and the further processing mill in Parkano. UPM will permanently close these mills during the first half of 2010. In addition, UPM is prepared for temporary production curtailments at all of its plywood mills and sawmills in Finland in 2010.
UPM will discontinue weekend shifts in most of the Finnish mills as well as streamline the organisation of office employees. In the Timber business area, UPM will restructure the production of the Kaukas further processing mill in Lappeenranta.
As part of the measures to improve the competitiveness of the Plywood and Timber operations in Finland, UPM will invest approximately Euro 25 million in the expansion of the Savonlinna plywood mill and the development of the production at the Kaukas sawmill and the Aureskoski further processing mill in Parkano. After the investment, the Savonlinna plywood mill will be the world's most efficient birch plywood unit.
UPM estimates the restructuring costs to be approximately Euro 44 million, including impairment charges of approximately Euro 11 million. The restructuring costs for the 4Q 2009 are estimated to be in the Plywood business approximately Euro 30 million, including a cash impact of approximately Euro 24. In the Timber business, the cost is estimated to be approximately Euro 14 million, including a cash impact of approximately Euro 9 million.
Implementation of these measures will decrease the amount of UPM employees by approximately 830 persons, of which approximately 650 work in the units to be permanently closed:
The Kaukas plywood mill employs 298 persons, the Heinola plywood mill 212, the Heinola sawmill 75, and the Parkano further processing mill 63 persons. UPM estimates that approximately 200 persons could enter different pension schemes.
UPM's Plywood business employs currently 2,450 persons in Finland whereas Timber employs around 900 persons. As a result of the measures, the number of employees in the Plywood business will decrease by around 680 persons and by 150 in the Timber business.
"These decisions are regrettable and they affect many individuals. We intend to implement the restructuring in a professional manner and support employees in different ways to identify opportunities in the future," says Mr Jussi Vanhanen, Member of UPM's Group Executive Board and President of the Engineered materials Business Group.
Additional information: UPM-Kymmene Forest
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