St Etienne du Rouvray to Otor

Archive 12.6.1997 0:00 EEST

UPM-Kymmene plans to relinquish one of the two Chapelle Darblay mills in France
St Etienne du Rouvray to Otor
UPM-Kymmene today announced plans according to which ownership of St Etienne du Rouvray, a magazine paper mill belonging to itse French subsidiary Chapelle Darblay S.A., will be transferred to the French corrugated board producer Otor.
Otor is the second largest producer of corrugated board in France. The company has an annual turnover of FRF 1,8 billion and serves mainly customers in the foodstuffs industry.
According to the plan the mill will stop producing magazine paper and start manufacturing light testliner and fluting as of January 1998.
At the moment St Etienne du Rouvray has a capacity of 220,000 tonnes of coated magazine paper (LWC), an annual turnover of FIM 770 million and a mill staff of 485 persons. The competitiveness of the mill´s two LWC machines has been outrivalled by modern magazine paper machines.
Even after the transfer, UPM-Kymmene will continue to be the world´s leading LWC manufacturer with an annual capacity of 2 million tonnes. The transaction will improve the cash flow of the Magazine Paper Division. The write-off on the transaction will be approximately FIM 800 million.
The plan provides good future prospects for St Etienne, which has been suffering from poor profitability for some time. It will also safeguard jobs for most of the mill´s current personnel.
Otor plans important investments in St Etienne du Rouvray, after which the machines will produce light, recycled testliner and fluting, which have very good market prospects in Europe.
The transaction will be confirmed only after the personnel representatives have given their opinion and after the Boards of Directors of the two French companies have approved the plan.
For further information contact:
Mr Ghislain de Boissieu, Managing Director and CEO, Chapelle Darblay, tel. +33 2 35 64 52 01
Mr Juha Niemelä, President and CEO, UPM-Kymmene, tel. +358-204 15 0001
Mr Ismo Lepola, President, UPM-Kymmene Magazine, tel. +358-204 15 0526