Major European paper maker UPM has announced that it will close 800,000 tonnes of capacity across Europe to save costs.
In order to make savings of €150 million (£120 million), the company has targeted variable and fixed costs, but will also close capacity in France, Finland and UK.
It plans to close newsprint machine 3 at UPM Chapelle in France and newsprint 1 machine at UPM Shotton in UK, with a total capacity of 345,000 tonnes.
It will also close the SC machine Jämsänkoski 5 at UPM Jämsä River Mills and coated mechanical paper machine 2 at UPM Kaukas in Finland.
UPM president and chief executive Jussi Pesonen said: “During the past 12 months we have been able to improve our financial performance through streamlining but also through better focus and significant decrease in variable costs. Our new business structure has shown that it is capable of delivering results and we have been able to identify further profit improvement potential in our businesses. This potential we aim to capture in 2015.
“The European paper business is a case for itself. We have achieved a turnaround in profitability during 2014. Nevertheless, the current operating rates are unacceptably low and the current economic environment is not promising tailwind for 2015. We plan to adapt our production to meet the profitable customer demand. We also ensure savings without endangering customer deliveries in the structurally declining market.”
All of the machines will be permanently closed by the end of Q1 2015.