UPM to Close German Mills Amid Decline in Paper Demand

Finnish forestry group UPM announced it will close a newsprint mill and a fine paper machine in Germany, affecting 345 jobs due to declining graphic paper demand. The closures aim to address market overcapacity, saving 45 million euros annually. The company will incur restructuring charges of 113 million euros.

Finnish forestry group UPM said on Wednesday it would close a newsprint mill and a fine paper machine in Germany, affecting 345 jobs overall, citing a decline in graphic paper demand and a significant overcapacity in the market.

UPM will book restructuring charges of 113 million euros ($122.65 million) in its second-quarter results, it said, adding that the planned actions were estimated to save 45 million euros annually. "Graphic paper demand has continued to decline, reflecting the overall trend in paper consumption driven by digitalisation," UPM said in a statement.

"A durable recovery is not expected, resulting in significant overcapacity in the market," the company added. UPM said it would permanently close its newsprint mill in the town of Hurth in western Germany, and a fine paper machine in Dorpen in the north-western part of the country.

The plans would affect about 135 positions in Hurth and 210 in Dorpen, with both units expected to stop graphic paper production by the end of 2024 at the latest, UPM said. ($1 = 0.9213 euros)