UPM-Kymmene has agreed to sell a sawmill to Finland's largest private timber producer, Versowood, in a deal aimed at securing wood supplies for its pulp business amid high costs.
The move comes as UPM has been curtailing production at its Finnish pulp mills, citing challenging market conditions and expensive raw materials.
As part of a long-term partnership, UPM will sell its Korkeakoski sawmill to Versowood in exchange for a minority shareholding in the company.
Under the agreement, UPM will receive pulpwood and sawmill by-products from Versowood to supply its pulp mills, while UPM will provide logs to Versowood's sawmills, the company said on Monday.
"Through this long-term partnership with Finland's largest private producer and processor of sawn timber, we will significantly strengthen the availability of pulpwood and wood chips for UPM's pulp mills in Finland," said Petri Hakanen, Senior Vice President for UPM Fibres Finland Operations.
The deal is the latest step in a broad restructuring at the Finnish forestry group, which recently initiated a strategic review of its plywood business.
UPM will continue to operate three sawmills in Finland after the sale.
The transaction is subject to regulatory approval, which is expected by the end of 2025.
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