The Finnish firm's aim is to improve its competitiveness in the supercalendered (SC) uncoated magazine papers market.

The machine is set to be built in either France or Germany, with initial investment assessments being carried out at UPM's Augsburg (pictured) and Schongau mills in Germany and its Stracel mill in France.

UPM Magazine Papers division president Jyrki Ovaska said the building of the machine was part of a restructuring that includes machine closures and conversions across Europe.

Where the new machine will be situated is dependent on a number of factors, including availability of fibre and other resources, market closeness and overall cost.

Explaining why closures formed part of the project, Ovaska said: "We want to make sure this capacity increase is in line with the expected market growth of approximately 3% per year."

In total, the restructuring will boost UPM's production capacity by around 200,000 tonnes per year. The new machine is scheduled to start up by the end of 2007, and a decision on its location will be made by the end of this year.

Details of the restructuring plan will be finalised in the next 12 months. Ovaska would not speculate on which production lines could be affected by the programme.

A source at a Finnish competitor said: "Obviously they are taking measures to improve their competitiveness and I expect others will make similar moves."

Story by Andy Scott