UPM-Kymmene - Company Announcement

UPM to close the Myllykoski paper mill and implement From Job to Job programme

(UPM, Helsinki, 3 November 2011 at 16:00 EET) - UPM will permanently cease
production at the Myllykoski paper mill by the end of this year. UPM and its
employees were unable to establish a way to meet the commercial requirements
for continuation of operations at the Myllykoski mill during employee
negotiations.  In addition, the company is cutting down its overlapping
operations in paper sales, the supply chain and its functions in Finland. 

The personnel reductions will affect 371 people at the Myllykoski paper mill
and 21 people at Myllykoski Corporation and Myllykoski Sales Nordic. Personnel
reductions will start in January 2012. 

During the negotiations, issues such as pension schemes, relocations within the
company, re-training and ways to alleviate the effects of redundancies were
discussed. UPM will implement a programme called "From Job to Job" to support
its employees during the transition. 

“The Myllykoski mill has been making a loss for several years despite numerous
measures aimed at making the operations more efficient. The mill's cost
competitiveness is weak. The high costs of raw materials and energy have
further increased total costs and permanently damaged the mill's opportunities
to reach a profitable level,” states Jyrki Ovaska, President, Paper Business
Group. 

The declining economic situation has worsened the mill's situation this autumn.
 Alternative, profitable uses for the mill inside UPM's businesses have not
been found. 

The aim of these cuts is to improve the profitability and cost-effectiveness of
UPM's European paper business and adapt the company's paper production to the
needs of its global customer base. 

“This is a heavy day for Myllykoski people. However, it's important to face the
realities and to look ahead. UPM will support re-employment and training of
Myllykoski personnel," says Jyrki Ovaska. 


UPM to implement From Job to Job programme at Myllykoski

UPM is launching a programme called "From Job to Job" in order to alleviate the
effects caused by staff reductions in relation to the closing of the mill.  The
programme, which is to be implemented in co-operation with the authorities and
partner companies, includes active measures that promote employment and
re-training. 

UPM will support the re-employment of those being made redundant by
implementing several voluntary measures in addition to its statutory
obligations: 

  -- €1.5 million will be invested in training, focusing on re-employment.
  -- Those losing their jobs will be encouraged to become entrepreneurs and will
     be offered a business start-up allowance. A total of €1 million will be set
     aside for this purpose. The allowance per business is usually €20,000.
     €30,000 is the maximum amount that can be obtained, depending on how many
     people are employed by the business.
  -- People who move to a new location for their new job will receive a moving
     allowance and their moving costs will be reimbursed until the end of 2013.
     UPM will now also offer this support to former employees who are not
     employed by UPM.
  -- UPM will provide support for temporary housing and travel due to relocation
     for a new job, with a total of €1 million reserved for this purpose.
     Support can be obtained until the end of 2013. Support will also be given
     if former UPM employees are employed by a company with which UPM has signed
     a cooperation agreement. Such companies include the SOK service centre in
     Renforsin Ranta Business Area, Kajaani and the Transtech Oy plant in
     Otanmäki.
  -- UPM's re-employment obligation will be extended from the statutory 9 months
     to 15 months.

UPM will also offer its employees an external employment service in addition to
the public services offered by the Employment and Economic Development Office.
The Employment and Economic Development Office has had a service point at the
Myllykoski mill since September. The collaboration between UPM, the City of
Kouvola, the Centre for Economic Development, Transport and the Environment,
and the Employment and Economic Development Office has been excellent. 

UPM to support the creation of replacement jobs in the Kouvola area

UPM, the Ministry of Employment and the Economy and the City of Kouvola are
looking for a new industrial player to occupy the Myllykoski mill. Fields being
looked into include bioenergy and the chemicals industry. 

UPM will not establish a new business park in Myllykoski, but will continue to
develop the nearby Voikkaa Business Park by actively seeking new businesses for
the area. The excellent logistics, energy solutions and facilities in the area
make the park an optimum location for many different types of businesses. 

UPM will also establish a business incubator in the Voikkaa Business Park in
collaboration with Kouvola Innovation Oy. The purpose of this three-year
Protomo project is to encourage entrepreneurs to establish small businesses. It
will also support the business start-up allowance scheme included in the From
Job to Job programme. 

Press conference:

A press conference regarding these issues will be held at the Myllykoski
Virkailijakerho on 3 November 2011 at 5 p.m. Attendees will include Hans
Sohlström, Executive Vice President, Corporate Relations & Development; Timo
Suutarla, General Manager of the UPM Myllykoski mill; Jukka Arola, Project
Director and representatives from the personnel groups. 
Contact person: Asta Halme, Manager, Communications, UPM, Paper Business Group,
tel. +358 (0)50 389 4315. 


For further information please contact:
Jyrki Ovaska, President of the UPM Paper Business Group, tel. +358 (0)20 41
50564 
Hans Sohlström, Executive Vice President, Corporate Relations & Development,
UPM, tel. +358 (0) 400 547 717 (after 6 p.m. EET) 
Timo Suutarla, General Manager, UPM, Myllykoski mill, tel. +358 (0) 401 865 995
(after 6 p.m. EET) 

Link to UPM Paper press kit:
http://www.upm.com/EN/MEDIA/Press-kits/Business/Paper/Pages/default.aspx 


UPM Myllykoski
Myllykoski paper mill produces coated and uncoated magazine paper. The total
production capacity of the mill's three productions lines is 600,000 tonnes.
The mill, situated in Myllykoski, Kouvola in the Kymenlaakso region, employs
371 people. The mill was established in 1892. 


UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Corporate Communications

UPM, Corporate Communications
Media Desk, tel. +358 (0)40 588 3284
media@upm.com
www.twitter.com/UPM_News


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