UPM announces permanent mill closures

UPM has announced plans to close three mills permanently and lay off about 870 workers in the plywood and timber operations.

Negotiations with staff start immediately on the permanent closure proposals for the plywood mill and sawmill in Heinola, the Kaukas plywood mill in Lappeenranta and the further processing mill in Parkano, with the closures planned for the first half of 2010.

UPM also plans to discontinue weekend shifts in most of the Finnish mills as well as streamline the organisation of office employees.

But about €25m will be invested in the Savonlinna plywood mill to make it “the world’s most efficient birch plywood unit” with a 120,000m² annual production capacity.

UPM said the employee impact of the closures was “regrettable”, but the current situation was unsustainable.

The Heinola plywood mill has been at a standstill since January, while the Kaukas plywood mill has been temporarily shut since May.

The Heinola sawmill and Parkano and Kaukas further processing mills have had production curtailments in operation since the start of 2009.

First results from the employee negotiations are expected at the start of 2010. Co-operation talks with employees at all other Finnish mills will start next year on continuing temporary production curtailments.