Kaltenkirchen, north of Hamburg, makes self-adhesive filmic labelstock and graphics materials. It became part of UPM Raflatac in 2022 with the acquisition of German firm Advanced Methods of Coating.
UPM Raflatac said 154 jobs were likely to go as a result.
The shutdown of the site will take place in stages next year “with a strong focus on customers, quality and ensuring competitiveness”.
Label material production will be transferred to UPM Raflatac factories in Poland and Finland.
Production of graphics materials will move to the firm’s factory in Belgium, acquired when UPM Raflatac took over Grafityp earlier this year.
Tim Kirchen, executive vice president of UPM Raflatac, commented: “The aim of these changes is to accelerate our growth in the Films and Graphics business by improving the overall profitability of our operations and maximising synergies.
“By centralising the production to more cost competitive factories, we will also improve the cost efficiency and quality of our products and will be able provide better service to our customers.”
UPM Raflatac said that production of graphics solutions would continue at Kaltenkirchen until the transfer of the upgraded CM 3 coating line to Belgium was completed.
UPM Raflatac posted sales up 25% last year, to just under €1.5bn (£1.25bn), although comparable EBIT was down 52% at €103m in the face of a difficult market.
The overall UPM group had sales of €10.46bn in 2023. The business issued a profit warning for this year in October.
