Finland Times

UPM said it would permanently reduce its graphic paper production in Europe by approximately 305,000 tonnes.

The capacity reduction would lead to the closure of two super calendered (SC) paper machines, one in Augsburg, Germany and the other in Steyrermuehl, Austria. SC paper is the type of paper used to make magazines, commercial fliers and catalogues.

As a result, a total of 275 employees at the two mills would be laid off.

"The employee consultation processes will start in November in line with the local legislation," said UPM in a press release.

After the machines are closed, both of the mills in Augsburg and Steyrermuehl will continue paper production on the remaining cost-competitive machines, said UPM.

"The demand for SC papers, in line with other graphic papers, has been declining during the last years and the decline is expected to continue," said Winfried Schaur, executive vice president of UPM Paper ENA (Europe and North America).

Anu Ahola, senior vice president responsible for newspaper publishing at the company, told a Finnish language daily Helsingin Sanomat on Thursday that the closure was based on the company's annual competitiveness report.

"The machines expected to shut down would be difficult to take more power to run without significant investment," Ahola was quoted as saying.

She explained that paper machines in Finland would not be closed because they were more efficient and technically stronger than those to be discontinued.

In the past years, the demand for printing paper has given way to rapidly developing mobile communication technologies. Being hard hit by the trend, UPM has had to constantly cut down its paper production.

In November 2014, the company shut down four paper machines in Finland, France and Britain to reduce its publication paper capacity in Europe by around 800,000 tonnes.

Founded in 1996 and headquartered in Helsinki, UPM is one of the world's leading forest industry groups. The company employs nearly 20,000 people and has plants in 14 countries around the world.