UPM to close down PM6 and SAP special chemical pulp line at the Tervasaari paper mill in Valkeakoski, Finland

UPM will close down paper machine 6, producing brown sack paper and packaging
paper, at its Tervasaari paper mill on Friday, 10 August 2007. With the
closure, UPM ceases manufacture of brownsack paper. In addition, the production
of SAP special chemical pulp line will cease on Monday, 13 August 2007. The
decision on the closures was made as part of UPM's profitability programme in
May 2006. 

"The closure is a consequence of changes in the brown sack paper business
environment. Production and consumption of brown sack paper is moving toward
Eastern Europe and Russia, where wood, energy, and labour costs are lower. In
Western Europe consumption of brown sack paper has not increased, while in its
main areas of application, cement and animal food, deliveries have been
replaced by bulk transportation. This has decreased the profitability of our
sack paper production," said General Manager Eero Kuokkanen. 

"At the Tervasaari mill, we will respond to these changes by improving the      
competitiveness of our label and packaging paper production. The steps we have  
already taken are the renewal of PM8 last year and the investment for improving 
the quality and efficiency of PM7 this year. In particular, the new pulp        
bleaching line, which will start operation in September, will allow us to       
increase the use of our own pulp in the label and packing paper production", he 
added.                                                                          

Some personnel from PM6 will transfer to other departments at the paper mill,   
and the rest will benefit from the pension scheme. There were 80 employees at   
PM6.                                                                            

UPM's Tervasaari mill is the world's leading label release paper producer. Two  
paper machines (PM 8 and PM 5) produce label base paper with the combined annual
capacity of 250,000 tonnes. In addition, PM 7 produces envelope and bag papers, 
as well as special papers for technical applications, with annual capacity of   
100,000 tonnes. Over 90 per cent of the Tervasaari mill's production is         
exported. There are approximately 700 employees at UPM Tervasaari.              

For further information, please contact:
General Manager Eero Kuokkanen, UPM Tervasaari, tel. +358 400 734 232
Product Unit Director Kaisa Aarnikoivu, Packaging Papers, UPM Tervasaari,
tel. +358 40 515 0498 

UPM in brief                                                                    
UPM is one of the world's leading business groups producing forest products. In 
2006, the Group saw sales worth 10 billion euros, and it has about 28,000       
employees. UPM's main products include printing papers, self-adhesive label     
materials, and wood products. The company has production plants in 15 countries,
and its main market areas are Europe and North America. UPM's shares are listed 
on the Helsinki and New York stock exchanges. www.upm-kymmene.com