Helsinki, Finland, 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 in Finland. The main reason for the capacity reduction is the still weakening market situation.

Production reductions at each mill will be carried out according to plan made separately for each mill. 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 due to the quickly weakened market situation in birch plywood.. The company will begin employee negotiations with the whole mill and all employee groups. 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 meters of WISA timber products. UPM Timber has 16 production units in Austria, Finland, France, and Russia. In Finland, UPM operates seven sawmills, 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 1350 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 meters of birch plywood. The number of employees is 230 people.