UPM Fibres Braces for Production Cutbacks and Layoffs at Kaukas, Finland

Lappeenranta: UPM Fibres has reportedly initiated discussions with worker representatives at the Kaukas pulp mill, sawmill, and wood reception regarding a prospective temporary production modification to tackle the current market situation. As the Kaukas pulp mill and sawmill rely on interdependent raw material streams, the sawmill is also preparing for potential production adjustments.

UPM Fibres is reportedly gearing up to implement temporary layoffs for a fixed period at the Kaukas pulp mill, sawmill, and wood reception. The contemplated temporary layoffs may be divided into several periods and would not extend beyond 90 days. The employee consultations cover approximately 370 staff members in total.

The temporary adjustment of pulp production, along with potential layoffs, may occur during the scheduled maintenance shutdown in the second half of the year. The verdict on the feasibility of temporary layoffs will be made post the conclusion of the consultations.

UPM had revealed that it was revising its 2023 outlook downwards due to the slower pace of deliveries across most businesses and a sudden drop in pulp prices. Earlier in 2023, UPM conducted employee consultations regarding temporary layoffs in the UPM Communication Papers, UPM Specialty Papers, and UPM Plywood Business Areas.

UPM Pulp is a leading supplier of responsibly produced Eucalyptus, Birch, and Softwood pulp grades that cater to the global market. The broad spectrum of pulp offered by UPM caters to everyday essentials such as tissue paper and packaging, as well as advanced innovations like biomedical applications.

UPM takes pride in maintaining sustainable forestry practices. We ensure the production of high-quality wood while prioritizing biodiversity and water protection- all while preserving the recreational use of forests. Our commitment to sustainability extends to not only our own forests in Finland but also the timber we procure from forests worldwide, including Sweden and the Baltic States. Most of the forests comprise mixed-stand with native tree species. Biogeographically, the forests in Finland are semi-natural boreal forests, whereas those in the USA are semi-natural northern temperate woodlands.

The land managed by UPM in Uruguay comprises roughly 459,000 hectares, out of which around 300,000 hectares are owned by UPM, and the rest leased from private landowners. Out of this, nearly 60% is planted with eucalyptus, while the rest comprises unplanted grassland, valuable protected sites such as native forests, and infrastructure.

UPM houses five of its pulp mills in Finland and Uruguay, boasting of a collective annual production capacity of 5.8 million tonnes. The company's latest mill in central Uruguay became operational in April 2023. All our mills employ the best European Union-defined available techniques (BAT) to ensure productive, reliable, and sustainable operation. Besides, instead of purchasing energy, the pulp production process at UPM generates bioenergy, enabling us to sell energy. In fact, UPM is Europe's second-largest producer of biomass-based electricity.