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

UPM-Kymmene Oyj 

03.07.2012 08:30

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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.
+33.1.53.70.74.31 - +33.6.75 74 31 73 - martzner@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 EUR 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 EUR 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
media@upm.com
www.upm.com
www.twitter.com/UPM_News
News Source: NASDAQ OMX



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Company:      UPM-Kymmene Oyj
              
               
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