Helsinki, Finland, 12 June 2008 -– UPM estimates the result for its sawn timber business will be weaker than forecast in the second quarter of 2008. The full year profitability outlook for the sawn timber business within the Wood Products Division also is expected to further weaken markedly.

UPM will start employee negotiations for the possible closure of the Leivonmäki sawmill in Finland. The Leivonmäki sawmill has generated constant losses. The continued weakening market situation and the uncertainty related to raw material supply have further complicated the situation.

UPM has already responded to the weaker markets and reduced its sawmilling by temporarily limiting production at all of the company's seven sawmills in Finland.

Leivonmäki sawmill, founded in 1960, employs 63 people. The sawmill, located in central Finland, produces spruce sawn timber and its annual production capacity is 80,000 cubic meters. The sawmill uses some 200,000 cubic meters of spruce logs annually.

UPM Timber supplies sawn timber and further processed timber products to the building, construction, and joinery industries. Annual production capacity is 2.2 million cubic meters of WISA timber products. UPM Timber has 15 production units in Austria, Finland, France, and Russia. In Finland, UPM operates seven sawmills, located in Lappeenranta, Kajaani, Pietarsaari, Korkeakoski, Heinola, Pori, and Leivonmäki. UPM Timber employs 1450 people.