UPM Plans to End Paper Production in Kaukas, Lappeenranta and Plans to Shift Coated Mechanical Paper Production in Finland to its Rauma Mill
Driven by structural overcapacity in the graphic paper markets and the need to ensure long-term competitiveness of its operations, UPM Communication Papers plans to end paper production at UPM Kaukas paper mill, Finland, reducing the annual production capacity of coated mechanical paper by 300,000 tonnes.
The shutdown of the paper machine (PM1) is planned for the end of the year 2025. UPM’s pulp, sawn timber and biofuels production and R&D activities at UPM Kaukas integrate will continue as before.
Decisions on final plans would be made after the co-determination processes have been concluded in line with local legislation in Finland. Should the plans be implemented the number of employees affected at UPM Kaukas paper mill is estimated at 220.
UPM is well positioned to grow in several segments, while global demand for graphic paper continues to decline due to digitalisation, macroeconomic challenges and changing consumer habits. The planned steps will enable a healthier capacity utilisation and support our overall cost structure and competitiveness in the global graphic paper markets. We are aware that these plans will have a big impact on our committed employees in Lappeenranta and we will find solutions according to local practices. UPM will engage now into dialogue with employee representatives.
Gunnar Eberhardt, Executive Vice President, UPM Communication Papers
“Our employees across mills work hard to ensure excellent performance of our machines, also at UPM Kaukas. Unfortunately, market development requires steps such as this plan, which is a continuation of difficult but necessary steps to proactively ensure competitiveness of our overall paper operations. With the plan to shift UPM’s coated mechanical paper production in Finland from Kaukas to our Rauma mill, we are striving to optimise the asset structure and improve cost efficiency, particularly in our production and logistics processes,” said Antti Hermonen, Senior Vice President Operations, UPM Communication Papers.
UPM would recognise restructuring charges of EUR78 million (EUR35 million cash impact and an impairment of EUR43 million) as items affecting comparability in its Q3 2025 result. The planned actions are estimated to result in annual fixed cost savings of EUR32 million.
About UPM Kaukas
UPM Kaukas manufactures coated mechanical papers with an annual capacity of 300,000 tonnes. Located in Lappeenranta, Finland, the paper mill employs around 220 people and is part of the integrated UPM Kaukas mill site.
About UPM Communication Papers
UPM Communication Papers offers the industry’s widest portfolio for newspaper, magazine, marketing and book printing as well as for home and office applications. It employs around 5,000 people and operates 10 modern paper mills globally. Its annual production capacity is 4.3 million tonnes of graphical paper.
