Jan 12 2010
In November 2009, UPM announced plans concerning significant restructuring of its Plywood and Timber operations to ensure their competitiveness in Finland. The measures now decided include centralising operations and investing in the more competitive Finnish units.
In negotiations with the employees, financial prerequisites could not be found to continue the operations at the plywood mills in Heinola and Kaukas in Lappeenranta, the sawmill in Heinola, and the further processing mill in Parkano. UPM will permanently close these mills during the first half of 2010. In addition, UPM is prepared for temporary production curtailments at all of its plywood mills and sawmills in Finland in 2010.
Furthermore, to improve the efficiency of the Plywood business, UPM will discontinue weekend shifts in most of the Finnish mills as well as streamline the organisation of office employees. In the Timber business area, UPM will restructure the production of the Kaukas further processing mill in Lappeenranta.
As part of the measures to improve the competitiveness of the Plywood and Timber operations in Finland, UPM will invest approximately EUR 25 million in the expansion of the Savonlinna plywood mill and the development of the production at the Kaukas sawmill and the Aureskoski further processing mill in Parkano. After the investment, the Savonlinna plywood mill will be the world's most efficient birch plywood unit.
UPM estimates the restructuring costs to be approximately EUR 44 million, including impairment charges of approximately EUR 11 million. The restructuring costs for the fourth quarter of 2009 are estimated to be in the Plywood business approximately EUR 30 million, including a cash impact of approximately EUR 24. In the Timber business, the cost is estimated to be approximately EUR 14 million, including a cash impact of approximately EUR 9 million.