Two chemical-recovery lines will be replaced by one modern system and bottlenecks will be smoothed out by 2008.

"The new plant will improve Kymi's cost efficiency, while energy efficiency will be improved and fossil carbon dioxide emissions will go down," said project director Matti Haukijarvi.

"The investment will secure the pulp supply of Kymi paper mill and ensure its development in fine paper."

UPM has also opened a new factory as part of a joint venture, boasting to be the world's first mass producer of radio-frequency ID antennas.

The Finnish plant is run by Intune Circuits, which includes UPM, a government-owned investor and metallurgy expert.