UPM and Sappi plan to consolidate the paper market together
News General news
UPM-Kymmene Corporation and Sappi Limited have signed a non-binding letter of intent to establish a joint venture for the graphic papers segment.
The 50:50 joint venture would comprise the entire wood-free and newsprint business of UPM and Sappi in Europe. It would operate as an independent company, according to a statement issued by the two companies.
The planned joint venture is seen as a decisive response to structural changes in the European paper industry. It would involve the strategic redistribution of production volumes to the most efficient paper machines. Customers would continue to have access to a wide range of graphic paper products.
Overall, the joint venture would restructure supply in an industry burdened by declining demand, structural overcapacity, and high energy costs, the companies explain, adding that it would contribute to a more balanced and resilient European market and better enable the industry to withstand market challenges and increasing imports into Europe.
Sappi will contribute the following assets: the paper mills in Gratkorn, Ehingen, Maastricht, and Kirkniemi, as well as Sappi Europe's joint ventures for wood supply. UPM will contribute assets from its Communication Papers division: the mills in Augsburg and Schongau, paper machines 1 and 4 in Nordland, Rauma including UPM RaumaCell, Kymi, paper line 6 in Jämsänkoski, Caledonian, and Blandin in the USA.
