Upm Communication Papers plans to permanently shut down paper machine 6 in Upm Schongau, Germany. This will reduce annual uncoated publication paper capacity by 165 thousand tons by the end of the second quarter of 2023.
This puts Upm Communication Papers six months ahead of the announced cessation of production at the Steyrermühl plant in Austria. The exit from a total annual capacity of 320 thousand tons of newsprint will take place as early as the end of the second quarter of 2023.
Production of the cost-competitive 7 and 9 paper machines in Schongau and Upm’s four other uncoated publishing paper machines in Germany and Finland is expected to continue with a total annual capacity of 1,800 thousand tons.
The employee consultation process in Schongau is expected to begin immediately, as required by local legislation. The closure of the machine will take place after the conclusion of the consultation process. If the plan is implemented, the total staff reduction at Upm Schongau is estimated at 135.
At the same time, Upm has decided to discontinue newsprint production at the Steyrermühl mill by the end of the second quarter of 2023. Upm intends to ensure competitive production at the remaining newsprint machines in Europe. This decision will not impact plans for the Steyrermühl site and its employees. In the case of Steyrermühl, Upm will recognize charges of 10 million euros as items affecting comparability in the first quarter 2023 results. For the planned closure of Schongau PM6, Upm will recognize restructuring charges of 26 million euros as items affecting comparability in first quarter 2023 results. The planned actions are estimated to lead to annual fixed cost savings of 13 million euros.
Upm Schongau produces graphic papers with an annual capacity of 700 thousand tons. Located in Bavaria, Germany, the plant employs about 490 people.