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Miramichi closes permanently


December 18, 2007
By Pulp & Paper Canada

Helsinki, Finland – UPM has announced the permanent closure of its Miramichi paper mill in New Brunswick, removing …

Helsinki, Finland – UPM has announced the permanent closure of its Miramichi paper mill in New Brunswick, removing 450,000 tonnes of magazine paper capacity. This mill has been temporarily shut down since August 2007.

“During the temporary shutdown, we have investigated several business solutions to make the Miramichi operation viable. Unfortunately, the current business environment leaves us no options,” says Jyrki Ovaska, president of UPM’s Magazine Papers Division.

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The record strong Canadian dollar has made the export of Miramichi paper to the United States market unprofitable. The increasing cost of essential raw materials such as wood and chemicals has offset the benefit of price increase for magazine paper. Demand for magazine paper grades in North America has been stable, but globally, there continues to be overcapacity in magazine papers. UPM has permanently ceased production of 980,000 tonnes of coated magazine paper in 2006-2007 to reduce the structural overcapacity and improve profitability of the business.

Near Miramichi, UPM operates two sawmills in the communities of Blackville and Bathurst, and manages woodlands under Crown forest licenses. The future of these operations is under consideration.

In Europe, the company has planned temporary shutdowns on four paper machines, three in Finland and one in Austria. UPM will also start negotiations with employees on the possible closure of the timber components and planing mill in Luumki, Finland. Other facilities will undergo reorganization to streamline operations.

UPM estimates that these measures will reduce the number of the Group’s personnel by approximately 680, mainly caused by the permanent closure of the Miramichi mill (540 persons), streamlining and reorganisation of the Kajaani mill (60 persons) and the possible closure of the Luumki mill (50 persons). Rationalisation of the self-adhesive label materials operations in Tampere, Finland, and Melbourne, Australia, will reduce the headcount by about 30 persons. With the exception of Miramichi and Tampere, all the above measures still require negotiations with employees according to the national practises in respective countries.


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