UPM-Kymmene - Company Announcement

UPM invests in Kymi mill to secure its position in the global pulp market

UPM-Kymmene Corporation   Stock Exchange Release      28 February 2014 at 8.15
EET 

UPM invests EUR 160 million in Kymi pulp mill to strengthen its position in the
growing end use segments of the global pulp market. 

“Kymi is a profitable and competitive pulp mill in comparison with the world's
leading pulp mills. Our EUR 160 million investment will result in a significant
capacity increase with competitive costs and low risk,” says UPM's President
and CEO Jussi Pesonen. 

“We have set ourselves clear targets for growth initiatives in pulp production,
biofuels, speciality papers in Asia and label materials for the coming three
years. With these initiatives we are targeting an additional EUR 200 million
EBITDA when in full operation. The Kymi investment will bring a significant
contribution to this,” says Pesonen. 

With the investment Kymi's annual pulp production capacity will increase by
170,000 tonnes up to 700,000 tonnes of bleached northern softwood and birch
pulp. The Kymi investment makes a significant part of UPM's earlier announced
target to reach a 10 % increase in its 3.3 million tonne pulp capacity over the
next three years. 

During the past few years UPM has established a strong position on the pulp
market cooperating with customers in the growing end use segments such as
tissue, speciality papers and board. UPM has developed a versatile and
commercially competitive pulp portfolio with appealing service offering. 

UPM's competitive and modern facilities in Finland and Uruguay provide a
perfect platform for further growth. UPM's recent sales and marketing
cooperation with Canfor Pulp, the capacity expansion of Fray Bentos mill in
Uruguay, as well as the investments in Pietarsaari mill in Finland, and now in
Kymi, are all supported by healthy market fundamentals. 

The investment at Kymi mill will begin immediately comprising a new pulp drying
machine, modernisation of the softwood fibre line, a new debarking plant as
well as improvements in the energy balance of the Kymi integrate consisting of
pulp and paper mills. 

The investment will not only benefit the pulp mill but the whole Kymi integrate
due to increased resource efficiency and operational flexibility. 

“Furthermore, the investment will advance the decoupling of UPM's pulp and
paper businesses, which supports a clear management focus and decision making
in both businesses for the short and long term,” says Pesonen. 

The Kymi investment is one of the development initiatives with which UPM seeks
growth in its profitable businesses as announced on 6 August 2013. 

For more information, please contact:
Heikki Vappula, Executive Vice President, UPM Biorefining, tel. +358 2041 50567
Jaakko Sarantola, Senior Vice President, Pulp Business, tel. +358 2041 50789

Link to the picture cart: http://pet.upm.com/?cart=7692-gaimkmdbfk&l=EN

Press conference today in Kouvola

UPM holds a press conference today in Kouvola, Finland, address Koskelankuja 1,
Kuusankoski, at 11:00 EET. The event will be hosted by Jaakko Sarantola and
Markku Laaksonen, General Manager, UPM Kymi. Contact person: Irma Niemi,
Communications Manager, tel. +358 2041 52173. 

***

UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations

UPM, Media Desk
9.00-16.00 EET
tel. +358 40 588 3284
media@upm.com

www.twitter.com/UPM_News
www.facebook.com/UPMGlobal

Notes to the editors

UPM

Through the integration of the bio and forest industries, UPM is building a
sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM
Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood.
Our products are made of renewable raw materials and are recyclable. We serve
our customers worldwide. The group employs around 21,000 people and its annual
sales are approximately € 10 billion. UPM shares are listed on NASDAQ OMX
Helsinki. UPM - The Biofore Company - www.upm.com 

UPM Pulp

UPM is one of the world's leading producers of northern softwood, birch and
eucalyptus pulp supplying global customers mainly in the growing end use
segments such as tissue, speciality papers and board through its own sales and
technical service network close to the customers. UPM Pulp operates four modern
pulp mills, three in Finland and one in Uruguay as well as eucalyptus
plantations in Uruguay. UPM Pulp employs approximately 1,500 people and has an
annual pulp production capacity of 3.3 million tonnes. Pulp Business is part of
the UPM Biorefining Business Area. To learn more, visit: www.upm.com/pulp 

UPM Kymi

UPM Kymi is modern and environmentally efficient mill integrate producing pulp,
paper and energy. Kymi produces bleached softwood and hardwood kraft pulp as
well as coated and uncoated fine paper. UPM Kymi employs about 600 people and
is located in south-east Finland in Kouvola.