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UPM to Close Down PM 6 and SAP Special Chemical Pulp Line at the Tervasaari Paper Mill in Finland
Valkeakoski, Finland, 09 August 2007 -– UPM will close down paper machine 6, (PM 6)producing brown sack paper and packaging paper, at its Tervasaari paper mill on 10 August 2007.

With the closure, UPM ceases manufacture of brown sack paper. In addition, the production of SAP special chemical pulp line will end 13 August 2007. The decision on the closures was made as part of UPM's profitability program in May 2006.

"The closure is a consequence of changes in the brown sack paper business environment. Production and consumption of brown sack paper is moving toward Eastern Europe and Russia, where wood, energy, and labor costs are lower. In Western Europe consumption of brown sack paper has not increased, while in its main areas of application, cement and animal food, deliveries have been replaced by bulk transportation. This has decreased the profitability of our sack paper production," said Eero Kuokkanen, general manager.

"At the Tervasaari mill, we will respond to these changes by improving the competitiveness of our label and packaging paper production. The steps we have already taken are the renewal of PM 8 last year and the investment for improving the quality and efficiency of PM 7 this year. In particular, the new pulp bleaching line, which will start operation in September, will allow us to increase the use of our own pulp in the label and packing paper production," he added.

Some personnel from PM 6 will transfer to other departments at the paper mill, and the rest will benefit from the pension scheme. There were 80 employees at PM6.

UPM’s Tervasaari mill is the world's leading label release paper producer. Two paper machines (PM 8 and PM 5) produce label base paper with the combined annual capacity of 250,000 metric tons. In addition, PM 7 produces envelope and bag papers, plus special papers for technical applications, with annual capacity of 100,000 metric tons. More than 90% of the Tervasaari mill’s production is exported. There are approximately 700 employees at UPM Tervasaari.

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