Consumables

UPM to temporarily reduce its sawmilling and plywood capacity in Finland in 2009

Tuesday 28. October 2008 - UPM plans to temporarily reduce its sawmilling and plywood production capacity in 2009. UPM will begin employee negotiations on a plan to temporarily reduce sawn and processed timber products production at all the company's production units located in Finland.

The main reason for the capacity reduction is still
weakening market situation. The production reductions at each mill will be
carried out according to plan made separately for each mill. The employee
negotiations on production reductions and the possible temporary layoffs will
start immediately. Approximately 800 people are affected by the negotiations.

In addition, UPM plans temporary layoffs at its Heinola plywood mill. The
company will begin employee negotiations due to the quickly weakened market
situation in birch plywood. The whole mill and all employee groups are affected
by the employee negotiations. The possible layoffs in Heinola are estimated to
last over 90 days.

UPM Timber supplies sawn timber and further processed timber products to the
building, construction and joinery industries. Annual production capacity is 2.4
million cubic metres of WISA timber products. UPM Timber has 16 production units
in Austria, Finland, France and Russia. In Finland, UPM operates seven sawmills
which are located in Lappeenranta, Kajaani, Pietarsaari, Korkeakoski, Heinola,
Pori and Leivonmäki. Earlier this year UPM announced the closure of the
Leivonmaki sawmill by the end of the year. UPM Timber employs 1,350 people.

Heinola plywood mill produces refined WISA plywood for mainly concrete product,
building and parquet industries. The annual production capacity is approximately
50,000 cubic metres of birch plywood. The number of employees is 230 people.