The mill, which produces 270,000 tonnes of coated magazine paper a year, ceased production on 4 January in preparation for the sale to Blue Paper SAS. The handover is expected for March 2013.

Blue Paper SAS, which is a joint venture company of VPK Packaging Group and Klingele Papierwerke, intends to manufacture fibre-based fluting and test-liner products at the site, which will begin production in September 2013 following an investment programme.

Stracel mill's 280 employees all face redundancy although they will have the opportunity to apply for 130 positions that will be offered to them by Blue Paper SAS.

UPM has kept part of the land at Stracel as the EU awarded it a €170m grant to create a solid wood-based biorefinery at the mill, although UPM has yet to finalise its plans.

As well as the sale of the Stracel mill, UPM is proposing to reduce production across a number of its other mills as it aims to readjust its magazine paper and newsprint output in line with falling global demand.

In January, UPM announced that it would shut down two paper machines at each of its Finnish Rauma and German Ettringen mills and intended to sell its Docelles mill in France. This would reduce UPM’s graphic paper capacity by 850,000 tonnes in 2013.

The restructuring will cost UPM €100m but reap €90m annual savings, the paper manufacturer predicted.

Around 860 people, 400 of which are part of UPM’s global business and the remainder from the mills affected by the streamlining procedures, will lose their jobs across several countries.

The cull across the administrative workforce is due to changes in UPM’s internal supply chain, a UPM spokesperson said, and will affect those in human resources, communications and laboratory workers.

The planned closures follow a list of machine and mill sales throughout 2012, most recently that of UPM's Kajaani sawmill. UPM also shut down its packaging division in Q2 last year after it sold its packaging paper machines at both the Pietersaari and Tervasaari mills.

The paper manufacturer began 2012 with the closure of its Albbruck paper mill to kickstart its consolidation plans for the year.

UPM paper business president Jyrki Ovaska said: "Healthy cash flow is critical for UPM and its employees. Therefore UPM must take action to secure it. Under these circumstances only the most efficient and the most flexible production lines and organisations are competitive."

UPM revealed that it had made a pre-tax loss of €1.4bn on sales of €10.4bn throughout 2012, following impairment charges totalling €1.8bn in Q4 alone.

UPM president and chief executive Jussi Pesonen said: "The profitability of  the paper business group overall was weak, although healthy cash flow continued. The decrease in market prices for pulp meant a clear decrease in the operating profit, however.

"Paper was able to markedly reduce costs and improve its cost structure, but particularly in Europe the decrease and market prices and lower delivery volumes undermined the profit improvement potential of the business."