UPM has confirmed it will permanently end paper production at its Kaukas site during the fourth quarter of this year, following the conclusion of employee consultation processes.
The decision marks a major step in the company’s plan to consolidate its coated mechanical paper production in Finland.
The closure will result in the shutdown of Paper Machine 1 at the Kaukas mill and a reduction of 220 positions. UPM estimates that the move will reduce its coated mechanical paper capacity by 300,000 tonnes annually.
In July, the company had announced its intention to transfer production to its Rauma mill, one of UPM’s key sites for coated mechanical grades. Operations related to pulp, sawn timber, biofuels, and R&D at the Kaukas integrated site will continue as before.
Focus on Employee Support
“The consultations were conducted in a constructive spirit, focusing on the rationale behind the planned changes, their potential impact, and the comprehensive support available to affected employees,” said Matti J. Laaksonen, General Manager of the Kaukas and Kymi mills.
UPM will implement its established “from-job-to-job” program, which has been in place since 2006 to help employees affected by restructuring find new roles inside or outside the company. “Even in these difficult times, our skilled team at the Kaukas paper mill has ensured stable operations. We have focused on finding solutions for employees with the clear intention of mitigating the impact of this closure,” Laaksonen added.
An after-care team will remain on-site to oversee safety and maintenance at the facility following the shutdown.
Restructuring Amid Market Shifts
The decision reflects ongoing structural changes in the European paper market, where declining demand for printing and writing papers continues to challenge producers. By concentrating coated mechanical paper production at Rauma, UPM aims to enhance efficiency and align capacity with current demand levels.
UPM Communication Papers operates ten paper mills globally, producing 4.3 million tonnes of graphical paper per year and employing around 5,000 people. The broader UPM group employs approximately 15,800 people worldwide and generated €10.3 billion in sales in 2024.
UPM is a material solutions company that develops renewable fibres, biofuels, and advanced materials to replace fossil-based alternatives. Its sustainability performance has been recognized by EcoVadis and the Dow Jones Sustainability Indices.
