UPM enters into exclusive negotiations for the sale of assets of the Stracel paper mill in Strasbourg, France

Stock Exchange Release 3.7.2012 9:30 EEST

UPM-Kymmene Corporation                 Stock exchange release         3 July 2012 at 9.30 EET

UPM is entering into exclusive negotiations with VPK Packaging Group NV and Klingele Papierwerke through their newly created joint venture company, for the sale of assets and part of the land at the UPM Stracel paper mill site in Strasbourg, France. VPK and Klingele have made an offer on the acquisition of assets from UPM. The offer is subject to finalization of its review by the bank mandated for the financing. According to the plan, UPM would retain part of the Stracel real estate in its possession for potential future production of advanced biofuels.

VPK and Klingele plan to convert the Stracel mill into a recycled fibre-based containerboard unit, producing fluting and test-liner. The planned production of the mill would be approximately 300 000 tonnes per year. The conversion from the current magazine paper production would require a considerable investment by the two buying companies. The new converted mill would create 140 jobs.

This transaction is subject to completion of the employee information and consultation process on the planned closure of Stracel and the social plan implemented by UPM at such occasion, which the contemplated transaction is a part of, due to the 130 job offers it is to provide to former UPM employees. This process will be launched shortly and is expected to be completed during the second half of 2012.

On August 31, 2011 UPM announced the completion of a comprehensive review of the long term competitiveness of its publication paper mills. As a part of this review UPM announced the intent for the sale or other exit of the UPM Stracel paper mill. Since this, UPM has been working closely with the political, administrative and economic stakeholders to find the best possible solutions for the site and the employees.

“UPM has been conducting an active search for a buyer which could engage in a serious and credible project for the industrial restructuring of the Stracel site. The plan at hand provides a good opportunity for a new future for Stracel and would create a significant number of job opportunities on the site”, says Jyrki Ovaska, President of UPM Paper Business Group.

If UPM accepts the offer that has been submitted, the conversion project could start and the reconversion period would be approximately 12 months. Providing the plan proceeds, the converted mill would start the production in the second half of 2013.

For more information, please contact:
Arto Lampinen, Senior Vice President, Manufacturing, Paper Business Group – Tel.: +358.40834.9350
Jean-Marc Louvet, UPM France SAS, via Image7, Marie Artzner, Tel. + 74 31 73martzner@image7.fr

French teleconference for journalists today at 11:30 CET:
Please dial-in: 33.1.5580.9000 - Conference code: 75639958#

Notes to editors:

VPK Packaging Group NV
VPK Packaging Group NV, listed on Euronext Brussels, is an integrated European packaging group with 33 companies spread across 12 European countries realizing sales of 700 mio € and having a total of 3.000 employees. www.vpkgroup.com

Klingele Papierwerke
Klingele, a German family owned company since 1920, is one of the leading independent producers of containerboard and packaging made of corrugated board. The company consists of one paper mill, six integrated corrugated plants and seven converting plants in Europe and Africa, realizing sales of 340 mio € and having a total of 1.250 employees. www.klingele.com

UPM Stracel
UPM Stracel paper mill manufactures coated magazine papers and special newsprint. Its annual capacity is 280,000 tonnes. Located in Eastern France the mill employs 250 people. The mill was founded in 1936.

UPM leads the integration of bio and forest industries into a new, sustainable and innovation-driven future. Our products are made of renewable raw materials and are recyclable. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The Group employs around 24,000 people and it has production plants in 16 countries. UPM's annual sales exceed EUR 10 billion. UPM's shares are listed on the Helsinki Stock Exchange. UPM – The Biofore Company – www.upm.com   

UPM Paper has 22 modern and sustainable paper mills in Finland, Germany, the United Kingdom, France, Austria, China and the United States. Many of them are large recycling centres and bioenergy producers, as well as paper manufacturers. UPM Paper employs almost 13,000 people. In 2011, the business group’s net sales amounted to EUR 7.2 billion. To learn more, visit: www.upmpaper.com  


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

UPM Media Desk, tel. +358 40 588 3284