Pulp and Paper Canada


September 30, 2004  By Pulp & Paper Canada

UPM has announced a major restructuring at its Miramichi facility in order to secure the facility’s long-term viabi…

UPM has announced a major restructuring at its Miramichi facility in order to secure the facility’s long-term viability. The program includes the permanent closure of Miramichi’s aging kraft mill, effective January 31, 2005. In addition, there will be some restructuring in the paper mill as well as in the Woodlands Division which manages and operates Crown forest licenses. The restructuring at the Miramichi complex will result in the loss of 400 jobs.

“Closure of the kraft mill is a difficult, but necessary step to get the Miramichi operation on solid financial ground”, Mr. Jyrki Ovaska, President for UPM’s Magazine Paper Division said. “The kraft mill was the first facility on this site more than 50 years ago, and it has a proud history. However, the facility’s size and age have worked against it for years resulting in losses. The equipment has outlived its technological lifespan. The average competitive kraft mill today is cost efficient and three-to-four times larger than this one,” said Mr. Ovaska.


“In addition, while operating today within New Brunswick’s environmental standards, maintaining the mill’s environmental standards would require large investments and unfortunately, additional capital investment cannot be financially justified, ” he said.

The restructuring is a step toward making UPM Miramichi magazine paper mill competitive in the global marketplace.

“The two paper machines are the lifeblood of this operation and the key to its long-term success,” Mr. Heikki Malinen, President of UPM North America said. “Our efforts must now be focused on making the paper mill competitive. That is where the facility’s future lies.”

In connection with the closing UPM will book write-offs of EUR 79 million, of which EUR 60 million during the fourth quarter 2004 and EUR 19 million during the first quarter 2005. In addition UPM will book provision of about EUR 40 million for cash related closing costs during the fourth quarter 2004.

Miramichi’s paper mill, operating two paper machines, is located on the same site as the kraft mill. UPM Miramichi’s annual paper production capacity is 450,000 tonnes of lightweight coated papers. The capacity of the kraft mill is 240,000 tonnes of kraft pulp. The mill complex has currently 1,280 employees.

For more information, please contact:
Rebecca Theim, Communications Director, UPM, North America, tel. +1 630 850-4990,
cell +1 630 605-3712, rebecca.theim@upm-kymmene.com

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