UPM-Kymmene will permanently close its paper mill in Kaukas, Finland, and cut 220 jobs, the company said Friday after concluding negotiations with employees.
The closure of paper machine 1 is scheduled for the fourth quarter and will reduce the Finnish forestry group's annual coated mechanical paper capacity by 300,000 tonnes.
UPM first announced the plan in July, citing persistent overcapacity in the global graphic paper market as demand declines due to digitalization, and said it would shift production to its Rauma mill.
The move is part of a broader strategic overhaul at UPM, which is navigating weak markets and high raw material costs.
In recent weeks, the company has initiated a strategic review of its plywood business that could lead to a sale and has deepened production cuts at its pulp mills.
"The consultations were conducted in a constructive spirit, focusing on the rationale behind the planned changes, their potential impact, and the comprehensive support available to affected employees," Matti J. Laaksonen, a general manager at the company, said in a statement.
UPM said that pulp, sawn timber, biofuels production, and research activities at the integrated Kaukas site will continue operating.
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