UPM to Restructure Label Division in Europe

Nov. 12, 2008 - UPM said that it will restructure its Label Division's European operations in an effort to reduce costs. The company plans to close down a number of self-adhesive labelstock production lines and reduce slitting capacity in the UK, France, Germany, Hungary and Finland.

Approximately 340 employees, or about 20 % of UPM Raflatac's total personnel in Europe, will be affected by the measure.

UPM expects the restructuring to be complete by the end of 2009 and to reduce operating costs annually by about EUR 25 million.

The restructuring plan includes:

  • Permanent closure of two coating lines: one in Scarborough, UK, and one in Nancy, France
  • Further reduction of coating capacity through shift reductions in Scarborough, Nancy and Tampere, Finland
  • Closure of two slitting and distribution terminals: one in Düsseldorf/Ratingen, Germany and one in Tatabanya, Hungary
  • Slitting capacity reduction in Tampere, Scarborough and Nancy through shift reductions.

"Due to the weak economic conditions, market demand for self-adhesive labelstock is currently declining in Western Europe, and we foresee no short-term change in this trend," said Jussi Vanhanen, president of UPM's Engineered Materials Business Group.

"We recognize the remarkable job our employees have done in improving our operational efficiency in recent years, but unfortunately the headwinds from the overall economy are exceptionally strong. We have to take these difficult but vital steps to adjust our capacity to the demand outlook of our customers, and to secure our profitability," Vanhanen added.

UPM said negotiations with employees on the proposed closures and reductions will start immediately and proceed according to the local legislation in each country.

Possibilities for retirement, relocation within UPM and retraining also will be handled in the negotiations, UPM said.


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