UPM To Permanently Shutter PM 10 in Plattling, Germany

SEATTLE (Scrap Monster):  Finland-headquartered UPM Communication Papers has announced its plans to permanently close a magazine paper machine in Plattling, Germany plant. The decision is mainly on account of weakening market demand for magazine paper. It is also attributed to company’s ongoing focus on lowering costs. Meantime, paper machines PM 1 and PM 11 will continue to operate as usual.

The closure of PM 10 at the German facility is expected to reduce the annual capacity of coated mechanical paper in the Europe by approximately 155,000 tons. A total of approximately 160 jobs are likely to be affected. The employee consultation process will commence during this month. The permanent closure will follow the finalization of the consultation process, the press release noted.

The company forecasts good demand for most of its papers in 2019. However, it expects the demand for communications paper to decline further during the year. It must be noted that paper markets have been witnessing consistent decline over the past decade or so. The planned closure is part of efforts by the company to remain competitive by way of selective capacity reductions. Incidentally, Plattling PM10 has the highest technical age and the lowest capacity.

UPM expects savings of approximately EUR 17 million, as a result of the planned closure. A restructuring charge of nearly EUR 30 million will be recognized in books during the second quarter of the year.