UPM to Permanently Close Albbruck Paper Mill in Germany

Jan. 16, 2012 - UPM said that it will permanently close down its unprofitable Albbruck paper mill in Baden-Wurttemberg, Germany.

According to UPM, discussions between UPM, the employee representatives and local authorities did not lead to a solution for continuing the operations at the mill. Neither was the search for an investor successful.

The closure will affect 508 employees as of January 31, 2012.

"UPM Albbruck mill has been making a loss for several years due to the age and relatively small size of the machines and the mill is not cost competitive within UPM asset and global customer portfolio," said Jyrki Ovaska, President, UPM's Paper Business Group. "Under the difficult circumstances the highly qualified employees have done an excellent job. Unfortunately, it would not have been possible to improve the mill’s profitability to an extent that would have allowed sustainable operations.”

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 compensation payments were discussed and agreed.

Hartmut Wurster, Executive Vice President, who represented UPM during the round table discussions, said, "We understand the disappointment of the Albbruck mill employees. All the participants of the round table discussions have done their utmost to find a future-oriented concept for the mill. Despite this strong commitment of people involved, no solution could be found as the concepts presented by potential investors were not economically sound. UPM will implement a social plan in order to alleviate the effects caused by personnel reductions in a responsible way.”

The sheeting lines of the mill will be transferred to the company’s paper mill in Plattling in order to complement UPM’s product portfolio. “UPM sees the coated mechanical sheets as solid business, and is committed to serve the customers after the Albbruck closure smoothly and promptly,” said Jyrki Ovaska. Approximately 30 new positions will be created through this measure and applications from Albbruck specialists will be prioritized, the company said.

UPM said that it will participate in the follow-up of the round table discussions about the possible future use of the mill premises. The discussions will be led by the local Chamber of Commerce.

“The aim of this forum is to find development ideas and business opportunities for the site. We have already been contacted by companies who are potentially interested in the industrial use of the mill premises," Wurster said.

The Albbruck decision finalizes the paper capacity closure plans that were announced by UPM last August.

UPM Albbruck paper mill had a capacity of 320,000 tonnes of magazine papers. UPM Myllykoski paper mill in Finland with 600,000 tonnes of magazine papers was closed down on December 9, 2011 and paper machine 3 at UPM Ettringen paper mill in Germany with 110,000 tonnes of newsprint was closed down on December 14, 2011.

The sales process of UPM's Stracel paper mill in France is ongoing as planned, the company said.