Displaying items by tag: upm

UPM to permanently close down the paper machine 3 at UPM Ettringen and to restructure overlapping operations in Germany

UPM will permanently close down the paper machine 3 at UPM Ettringen paper mill on 14 December 2011 as being uncompetitive. In addition, overlapping operations are being restructured in the supply chain, paper sales and functions in the Ettringen, Plattling and Hürth mills. The negotiations concerning reconciliation of interest and social plan are concluded at the German units except Albbruck.

The aim of the changes is to improve the profitability and cost-efficiency of UPM's paper business in Europe and to adapt the company's paper production to the needs of its global customer base.

The restructuring measures will affect 54 people at UPM Ettringen, 17 people at UPM Plattling and 7 people at UPM Hürth. Personnel reductions will start in January 2012.

During the negotiations concerning reconciliation of interest and social plan, issues such as pension schemes, support for re-employment, relocations within the company, re-training and compensations payments were discussed and agreed.

“The restructuring measures are extremely unfortunate for the affected employees. However, it’s important to face the realities and to look ahead. UPM will support the affected employees in finding a new job,” says Jyrki Ovaska, President, Paper Business Group.

UPM is planning production curtailments and measures to improve efficiency for timber and further processing businesses

UPM Timber and UPM Living business units are to begin co-operation negotiations concerning production curtailments for the first quarter of 2012 and measures to improve production efficiency.

“Business has been negatively affected by a decrease in demand, weak cost competitiveness and the overcapacity of sawn timber and further processed wood products in Europe. The aim of the plan is to improve the long-term cost competitiveness in the business areas of sawn timber and further processed wood products,” states Ilkka Ylipoti, Senior Vice President, UPM Timber.

The negotiations concerning the efficiency improvement of production will begin at Aureskoski and Lappeenranta, in Finland, and at Pestovo, in Russia. If the planned rationalisation measures are carried out, the number of employees will be reduced by, at most, 59 people.

The negotiations concerning the production curtailments of the first quarter of 2012 will be held at all the Finnish sawmills and further processing mills apart from the Heinola further processing mill. The length of the temporary lay-off periods caused by possible production curtailments will vary by unit, but they will not last longer than 90 days. The production curtailment negotiations concern 554 people in Finland.

UPM Plywood adjusts the production when needed

Co-operation negotiations started at the end of October regarding adjustment of plywood production in Finland have been completed. Based on the negotiations, the company has decided to adjust production by lay-offs totalling no more than 90 days by the end of 2012 at Joensuu, Jyväskylä, Ristiina and Savonlinna plywood mills when needed.

“Timing and duration of the lay-offs will be decided mill-by-mill based on the market situation and they will, if executed, cover the mills’ personnel as a whole.  The mills’ power plants and the Savonlinna investment project are left outside the adjustment measures,” says Petri Parjanen, Director of Human Resources, UPM Plywood.

UPM and Telko have signed a distribution agreement for UPM's new composite product UPM ForMi. Telko will sell the natural fibre composite developed by UPM through its global distribution network to the furniture, vehicle and electronics industries and to plastic companies that manufacture consumer products.

"With this agreement we are able to offer our clients a new, interesting product. UPM ForMi is an excellent fit to Telko’s existing product range. In addition, cooperation with UPM opens new possibilities in plastics industry," says Telko’s CEO Kalle Kettunen.

The distribution agreement between UPM and Telko will make UPM ForMi available in the market faster, says Director Stefan Fors, Director, UPM's Advanced Fibre Materials. "Our aim is to develop international business and find new international development partners. Telko provides us with an efficient and extensive distribution network."
UPM ForMi is a composite that can be utilised in both industrial and consumer applications. The new composite is manufactured from pulp fibre and pure plastic polymers. UPM ForMi contains 20–60% of fibre depending on the application.

The new composite can be coloured and injection moulded in the same way as plastic. Products manufactured from UPM ForMi are consistent in quality, non-toxic and odourless. Telko will sell UPM ForMi in the form of granulates manufactured by UPM in Lahti.

Lower pulp and fine paper deliveries in Europe had an adverse impact on UPM’s operating profit – Q3 operating profit excluding special items was EUR 137 million

UPM’s pulp deliveries and fine paper deliveries in Europe during Q3 2011 were lower than expected and had a negative impact on the company’s operating profit.

Fine paper demand continued to be low in Europe and deliveries did not recover in September from the seasonal summer slowdown.

However, stable demand continued in publication papers and the integration of Myllykoski and Rhein Papier proceeded well.

During Q3 2011, UPM’s operating profit excluding special items was approximately EUR 137 million and EBITDA approximately EUR 330 million. Sales were EUR 2.6 billion.

Following the lower than expected Q3 results and the continuing uncertainty in pulp and fine paper markets, UPM’s full-year 2011 operating profit is expected to be somewhat lower than last year. Previously, the full year 2011 operating profit was expected to improve from last year.

UPM will publish its Q3 2011 results on October 26, 2011.

The co-operative negotiation, started in September, regarding UPM Plywood Head Quarter operations and Sales in Finland have been completed. As a result of the negotiations, the number of UPM Plywood’s personnel in Finland will reduce by 53 persons, out of which 35 will be redundancies. The reduction takes place primary in Lahti. The reasons for the reduction are Head Quarter and Sales organisations’ re-organisation and improvement of efficiency.

The personnel reduction will take place by the mid of 2012. The persons, who are left unemployed, will be provided support for re-employment. The number of personnel in UPM Plywood after the reduction will be about 2500, out of which, about 1700 in Finland. The number of personnel in Lahti will be about 85 after the reduction.

The co-operative negotiation regarding UPM Plywood Head Quarter operations and Sales in Finland were completed ahead of estimated schedule. Negotiations regarding the international sales network and Mill Maintenance in Finland, which were started at the same time, are still on-going.

The Rosebery Group's Installation of Machinex “State of Art” Material Recovery and Recycling Facility for UPM, included the following Provision of services:

•  Proactive liaison between end user (UPM) and our installation partner (EBI) including advisory role pertaining to installation standards
•  Planning assistance
•  Containment installation
•  Cable installation and termination
•  Testing and commissioning
•  11,000 man hours worked
•  No lost time accidents
•  14 week project completed on time

Machinex along with The Rosebery Group proudly announces its presence in the United Kingdom with a state of the art Material Recovery & Recycling Facility (MRRF) for the paper manufacturing giant UPM. Located in North Wales, The single-stream MRRF has been built adjacent to the UPM Shotton paper mill in to bring efficiencies to the UPM operation.

The Machinex sorting system is designed to process over 270 000 tonnes a year of recyclables from comingled collections from local authorities in the UK. This includes: papers, cartons, cardboard, plastic, glass and metal containers. The MRRF, in order to complement the existing paper-making operations at UPM’s Shotton site which presently recovers 640, 000 tonnes of waste paper and recycles this into newsprint each year, will derive approximately 120,000 tonnes high quality recovered paper from the new MRRF. This recovered paper issent from the MRF to the paper mill through a tunnel connecting the two buildings.

In the early 1980s, Machinex became the first company in Canada to design machinery for material recycling facilities. The company immediately established itself as a leader in designing profitable quality recycling sorting systems. Today, Machinex is still a world leader in the industry, developing cutting edge sorting, waste management and recycling technology. Over the years, they have designed and installed over 200 turnkey facilities in partnership with leading MRFs in Canada, the United States and Northern Europe.

Their mission is to provide the markets that they serve with the best leading edge recycling technology available. They are committed to the highest quality standards in design and manufacturing processes and offer clients reliable, innovative recycling solutions at a competitive cost whilst operating their business in an environmentally responsible manner.

Please watch the following video below for an indepth review

In November 2010 UPM announced its response to the growing demand for label papers by increasing the label paper production capacity by almost 30,000 tonnes annually at its Tervasaari mill (PM 8) in Valkeakoski, Finland.

"The rebuild of the Tervasaari PM 8 started in March 2011 and has proceeded as planned. The first phase in March 2011 brought already more capacity. The main phase takes place at the end of Q1 2012. In addition to capacity increase the investment enables UPM to widen the product portfolio towards thinner and lighter liners. The first new product will be a 45 gsm glassine,“ says Mr Jari Tamminen, Production Director of UPM Tervasaari.

UPM Tervasaari paper mill manufactures yearly some 360,000 tonnes of label, envelope and kraft papers. The mill employs about 400 people. PM 8 was built in 1996 and the machine produces label release base papers. Its previous rebuild was done in year 2006.

source: UPM

UPM is the first Finnish company to be awarded a certificate for complying with the new FSC (Forest Stewardship Council) standard. The FSC certificate covers around half of UPM's forests in Finland. UPM's forests have previously been awarded a PEFC (Programme for the Endorsement of Forest Certification Schemes) certificate.

"FSC certification of Finnish forests further expands UPM's portfolio of eco-labelled products. We already have the markets' most extensive selection of paper products with the EU Ecolabel. Forest certificates, such as FSC and PEFC are a guarantee to our customers that our wood fibre comes from sustainably managed forests," says Thomas Ehrnrooth, Vice President, Marketing, Paper.

The first UPM products manufactured from FSC-certified Finnish fibre will be available on the market in autumn 2011.

An agreement on the new Finnish FSC standard and its requirements was concluded during negotiations between environmental organisations and the forest industry in autumn 2010 and a certificate of compliance with the new standard has been available for Finnish forests as of May 2011. UPM started certification preparations at the beginning of this year. The FSC certificate was granted by Soil Association Woodmark. 

"WWF and UPM have been working closely for a long time and I am pleased to see that UPM is setting an example in FSC certification for other Finnish companies. We hope that more forest owners will start to adhere to the more ecologically stringent FSC standard," says Liisa Rohweder, President of WWF Finland.

"FSC certification is a natural continuation for the development of UPM's forestry. We want to develop sustainable forest management and make our business more transparent," stresses Timo Lehesvirta, Director, Environment.

UPM monitors the origin of all the fibre it sources and strives to maximise the use of certified fibre. In 2010, 79% of the fibre used by UPM was certified. All forests owned by UPM have a PEFC, FSC or SFI certificate.

As part of the Myllykoski integration, UPM has completed a comprehensive review of the long term competitiveness of its publication paper mills. The review has covered asset efficiency, production input availability and costs as well as end-use markets.

As a result of the review, UPM plans to adjust its magazine paper capacity to match the needs of its global customer base. Therefore, UPM will start negotiations with employees on the plan to permanently remove 1.2 million tonnes of magazine paper capacity in Finland, Germany and France, and 110,000 of newsprint capacity in Germany. The plan also includes restructuring of the overlapping paper sales and supply chain networks and global functions.

The planned measures include:
• permanent closure of the UPM Myllykoski mill in Kouvola in Finland
• permanent closure of the UPM Albbruck mill in Germany
• permanent closure of the paper machine 3  at the UPM Ettringen mill in Germany
• transfer of the sheeting lines from UPM Albbruck mill to UPM Plattling mill in Germany
• sale or other exit of the UPM Stracel paper mill from UPM Paper Business Group
• restructuring of overlapping paper sales and supply chain network as well as global functions.

In addition, UPM plans to temporarily close the paper machine 2 producing uncoated fine paper at UPM Nordland Papier in Germany and streamline operations in Pietarsaari pulp and paper mills in Finland.

The planned closure of the Myllykoski and Albbruck mills and the paper machine 3 of UPM Ettringen would be scheduled by the end of 2011. The Stracel mill sales process would start this autumn and is expected to be completed within twelve months.

The implementation of the plan would reduce the number of employees by approximately 1,170. Based on the plan, UPM will book in the third quarter of 2011 an approximately EUR 70 million write-off in fixed assets and make a provision for costs of approximately EUR 200 million. Net cash impact from the restructuring plan amounts to approximately EUR 170 million. Annual synergy benefits of the Myllykoski acquisition including the planned actions are estimated to total approximately EUR 200 million.

“The paper industry faces severe challenges due to high raw material, energy and logistics costs, and considerable overcapacity. The profitability of our paper business is clearly below the level required to run long-term sustainable operations. The planned restructuring would further strengthen the cost competitiveness of UPM’s paper operations and reduce the future need for major maintenance investments”, says UPM’s President and CEO Jussi Pesonen.

“With the planned actions we would respond to the magazine paper overcapacity challenge for our own benefit. In addition, we would ensure the efficient use of our remaining capacity. However, this plan would not solve the cost challenges of the industry,” says Pesonen.

“Our aim is to improve the profitability and cost competitiveness of our magazine papers. The planned measures would immediately reduce the unit costs of UPM’s magazine papers and newsprint from the level before the acquisition of Myllykoski.  In spite of the restructuring, we would be able to serve our paper customers better through our improved product portfolio and geographic scope”, says Jyrki Ovaska, President of UPM Paper Business Group.

“The planned closures are very unfortunate for the affected employees but restructuring is the only way to make a fundamental improvement in the cost competitiveness of our paper business. UPM will carry out the restructuring negotiations in a responsible and professional manner in line with the national legislation of the respective countries,” says Ovaska.

UPM will consider options to establish a “From-job-to-job” programme appropriate to the local legislation provided the plan proceeds to implementation.  The planned actions will be discussed in the upcoming negotiations with employees and authorities.

source: www.upm.com

UPM expands its nursery in Joroinen, Finland and builds a second nursery in Uruguay. These expansions secure the availability of high quality seedlings and seed material, which is the basis for successful tree cultivation both for the boreal forests as the plantations in the southern hemisphere.

The expansion of the Joroinen nursery includes a new greenhouse to be taken into use during summer 2011. The first seedlings from the new greenhouse will be planted in the UPM-owned forests and in the forests of the forest service customers during the 2012 planting season. Joroinen nursery was founded in 1980 and it employs about 30 persons during the peak time.

Forestal Oriental, UPM’s plantation company in Uruguay, builds a new nursery in Guichón, in the department of Paysandu. The new nursery is estimated to be ready in March 2012 and it will employ about 100 people.

Forestal Oriental produces seedlings of two different eucalyptus species – Eucalyptus grandis from cuttings and Eucalyptus dunnii mainly from seeds. The new nursery enables the production of Eucalyptus dunnii from rooted cuttings. Forestal Oriental’s San Francisco nursery in Paysandu continues its operation.