Helsinki, Finland, 15 August 2007 -– The co-determination negotiations at UPM’s birch plywood mills in Finland have been completed. The company will reduce its production of birch plywood for the remainder of this year. Owing to bad harvesting weather conditions last winter, the units were not able to get enough birch logs in storage for the autumn.

The reduction will mainly be carried out by cutting down on the number of weekend production runs, by employees taking time off for extra hours worked and additional statutory days off, and by moving up the winter holidays. In addition, the mills are preparing for possible temporary lay-offs later on in the autumn, ranging in duration from 1-3 weeks. The exact need for temporary lay-offs in each mill will become clearer once the autumn’s raw material situation is finally known.

Co-determination negotiations will also be initiated at the Keuruu mill, which produces birch face veneer and thin veneer plywood. UPM plans to concentrate its birch face veneer production in Finland at the Lohja Veneer mill. As regards thin veneer plywood, the company is considering either selling or closing down the operations. Keuruu mill personnel can, when necessary, transfer to the Lohja mill or the other plywood mills. UPM will support relocation to the Group’s other units.

The Keuruu mill employs approximately 70 people. Some 80% of the mill’s production is veneer and 20% thin veneer plywood. Besides Keuruu and Lohja, birch veneer is also manufactured at UPM’s Chudovo mill in Russia. The annual capacity of the three mills amounts to some 20,000 cubic meters of birch veneer, approximately a quarter of which is manufactured at Keuruu.