135 to lose job as UPM closes paper machine at Schongau

The Finnish forest industry company UPM will permanently paper machine 6 at UPM Schongau, Germany, reducing the annual capacity of uncoated publication papers by 165,000 tonnes by the end of Q2 2023, said the UPM in a press release on Wednesday.

The employee consultation process in Schongau is planned to start immediately in line with local legislation.

The machine is planned to be closed after the consultation process has been finalized.

Would the plan be implemented, the total reduction of personnel at UPM Schongau is estimated at 135.

UPM Communication Papers accelerates the earlier announced stop of production at its Steyrermühl mill by six months. The exit of a total annual capacity of 320,000 tonnes of newsprint will take place already by the end of Q2 2023.

Production on the cost-competitive paper machines 7 and 9 in Schongau as well as on the four other uncoated publication paper machines of UPM in Germany and Finland is planned to continue with a total annual capacity of 1,800,000 tonnes.

The COVID-19 years caused demand disruptions in the graphic paper markets, followed by a period of high inflation and unprecedented volatility last year, said UPM.

Now that volatility is subsiding, the graphic paper market is returning to its long-term trend of declining demand which has characterized the industry for over a decade.

“The continued long-term decline in graphic paper demand forces us to continue our efforts to ensure cost competitive production and that our assets are in efficient use in all circumstances. We are aware that these are difficult news for our employees who have demonstrated their loyalty and commitment over such a long time. In a declining market, competitiveness in company operations is key to substantiating our long-term commitment to the publication paper market and to remain as a reliable partner to our customers. UPM aims to handle the restructuring measures in a socially responsible manner and will engage now in a fair dialogue with employee representatives,” said Massimo Reynaudo, Executive Vice President, UPM Communication Papers.

At the same time, UPM has decided to stop the newsprint production at its Steyrermühl newsprint mill by the end of Q2 2023.