Today (11 March), the group’s UPM Communication Papers business announced that it plans to close the Ettringen Mill in Bavaria.
The site has been making paper since 1897. It currently makes UPM Eco Basic, UPM Eco, UPM MaxS, UPM Eco Prime, UPM News, UPM Eco, and UPM Max S.
Gunnar Eberhardt, executive vice president at UPM Communication Papers said: “In a dynamically changing market that has been characterised by overcapacity for years, operational competitiveness is key to underpinning our long-term commitment to the still sizeable graphic paper markets and remaining the reliable partner our customers know us to be.”
He said that UPM aimed to handle the restructuring measures in a socially responsible way, with 235 jobs likely to go.
“With the plans announced today, we are continuing to selectively adjust our paper capacity to a profitable customer demand. This would ensure an efficient and flexible use of our remaining paper assets.”
Alongside the Ettringen announcement, UPM Communication Papers said that it planned to centralise some processes.
It will discontinue the Central European Mill Support (CEMS) team and streamline Mill Sourcing and RCP Sourcing teams according to new capacities.
An estimated 227 positions are affected.
“Considering all planned changes announced today by Communication Papers, there would be a total of 462 positions impacted, thereof 107 in Finland, 314 in Germany, 34 in the UK and 7 in the USA,” UPM stated.
The restructuring is likely to involve charges of €74m, with annual fixed cost savings estimated at €39m.
If the plans go ahead Ettringen is expected to shut down permanently in July.
UPM Communication Papers has three other mills in Germany at Augsburg, Nordland Papier, and Schongau.
Last year the division closed its Hürth newsprint mill near Cologne and decommissioned a paper machine at the Nordland Papier fine paper facility.
The overall UPM group of businesses had sales of €10.3bn last year. UPM Communication Papers accounts for 26% of sales, with turnover of €2.95bn.
