The company wants to achieve a major efficiency improvement throughout all its business with the aim of saving €200m a year.

Jussi Pesonen, president and CEO of UPM, said: “UPM employees have worked hard to restore profitability, but we have not been able to achieve a turnaround. Traditional markets grew very slowly and structural overcapacity dilutes our ability to utilise our production facilities efficiently.”

He said other challenges had included dramatically increasing production costs and emerging competition from Asia and South America.

&#8220”

UPM employees have worked hard to restore profitability, but we have not been able to achieve a turnaround. Traditional markets grew very slowly and structural overcapacity dilutes our ability to utilise our production facilities efficiently.

Mr Pesonen added: “In this kind of business environment, sustainable profitability improvement requires a new kind of thinking and more drastic measures than before.”

The programme will reduce group staff numbers by about 3,600 people, with the first personnel negotiations expected to be complete by the first half of May. Several paper mills are earmarked for closure.

More follows in this week’s TTJ.