UPM Communication Papers announces plans to permanently close its Plattling mill in Germany, reducing the uncoated and coated publication paper capacity by 595,000 tonnes in Europe.
Should the plans be implemented the number of UPM employees affected in Plattling is estimated at 401. In addition, the Compamy expects implications for the service providers on site. The participation process with the workers council will start immediately in line with local legislation.
The planned closure of UPM Plattling’s two paper machines would lead to a permanent reduction of 380,000 tonnes of uncoated publication paper and 215,000 tonnes of coated publication paper. Both paper machines are planned to stop graphic paper production by the end of 2023.
During the past 15 years the demand for graphic papers has been declining constantly and this trend is expected to continue. The decline in demand has been accentuated significantly over the course of this year. Furthermore, the long-term predictability of production factors, such as energy supply, is essential to our industry. The uncertainty about reliability and cost competitiveness of the energy supply in Germany is currently a big challenge.
The plans announced today would strengthen the overall cost competitiveness of UPM Communication Papers and are a prerequisite for consistent paper operations in the long run. UPM would recognize restructuring charges of Euro 122 million (Euro 106 million cash impact and an impairment of Euro 16 million) and an impairment of Euro 100 million of the leased CHP plant as items affecting comparability in its Q3 2023 result. The planned actions are estimated to result in annual fixed cost savings of Euro 60 million.
UPM Plattling manufactures graphic papers with the annual capacity of 595,000 tonnes. Located in Bavaria, Germany the site employs around 520 people.
