The closures would represent an annual reduction of 330,000 tonnes of newsprint and 280,000 tonnes of uncoated fine paper, with all 135 jobs lost at Hürth, and around 210 lost in Dörpen.
Antti Jääskeläinen, executive vice president at UPM Communication Papers, said in a 29 May statement: “In recent years, we have already responded to overcapacities in the global paper markets with selective capacity reductions, always considering the competitiveness of our business.
“The planned closures would ensure an efficient and flexible use of our remaining paper assets and will therefore enable UPM Communication Papers to stay a reliable partner to our customers in the long run.”
The plans would see the Dörpen plant’s overall headcount reduced by around 18%, with production dropping from 1.2m tonnes of paper to 920,000 tonnes annually.
The company must now consult with workers’ councils over the closure. If all goes to plan, the affected machines would stop production, at latest, by the end of 2024.
Jääskeläinen said: “We are aware that today’s announcement is very difficult news for our employees in Hürth and in Dörpen. We are committed to conducting a fair dialogue with employee representatives to seek responsible solutions for our workforce.”
The proposed measures would save UPM approximately €45m (£33m) in fixed costs annually, and are a “prerequisite for consistent, long-term paper operations”, the firm said.
In the event of closure, UPM will recognise restructuring charges of €113m (£96m), consisting of a €68m (£57m) cash impact and impairment of €45m (£33m) as items affecting comparability in its Q2 2024 results.
UPM’s 2023 results, posted in February 2024, reported a “very challenging” year, with sales falling 11% and operating profits more than halved to €608m (£518m).
Speaking at the time, president and CEO Massimo Reynaudo commented: “UPM delivered solid 2023 results in a very challenging operating environment as the world went through an exceptional economic cycle.
“During the first half of the year, we experienced an exceptionally sharp downturn, especially in European markets. Unprecedented de-stocking significantly affected market deliveries and was combined with falling pulp and energy prices. As the year progressed, there were signs of gradual recovery in many product markets, and we were able to deliver improving earnings.”
The firm likewise announced it would consult with employees over a spate of temporary layoffs at its Finnish plants in March 2024, with up to around 2,000 employees affected.
Following the closures, UPM will have 10 operating paper mills, with approximately 16,255 employees worldwide.
