UPM closes mills, cuts 700 jobs in Finland

HELSINKI, Finland - The world's largest magazine paper maker, UPM-Kymmene Corp. ,said Thursday it will close two mills in Finland by year-end and ax 700 jobs.

The layoffs, at the Kajaani paper mill and Tervasaari pulp mill, come on top of previously announced worldwide job cuts of some 1,600 planned for 2009 and 2010.

UPM said it found "no financial prerequisites" to continue operations at the Finnish plants in talks with employees since September.

"The slowing economy has further weakened the situation of these mills during the autumn," the Helsinki-based company said. "Profitability of pulp production has significantly decreased in Finland."

UPM said the Kajaani mill was not competitive and prospects to continue operations there "have constantly weakened due to the price development of wood and energy as well as the weak long term demand outlook for its main products."

Last week, Nordic paper maker Stora Enso Oyj said it will cut wood production and lay off more than 500 workers, mostly in Finland, to improve competitiveness in an increasingly difficult market.

In September, Stora also announced worldwide production cuts and 1,700 layoffs planned for 2009, and said it will transfer 1,450 employees to a joint venture with Swiss-Swedish electrical engineering company ABB Ltd.

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On the Net:

http://www.upm-kymmene.com

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