Type
Closure
Country
Finland
Region
Manner-Suomi; Länsi-Suomi; Keski-Suomi
Location of affected unit(s)
Jämsä
Sector
Manufacturing
Manufacture Of Wood And Paper Materials
Manufacture Of Paper And Paper Products
17 - Manufacture of paper and paper products

450 jobs
Number of planned job losses
Job loss
Announcement Date
26 August 2020
Employment effect (start)
Foreseen end date
31 December 2020

Description

UPM, a Finnish manufacturer of paper and wood products, restructures its business activities in Finland which may lead to reduction of approximately 600 employees in Finland. They plan to close of the production site in Jämsä (Central Finland) that is part of their Communication Paper business area. The planned closure envisages 450 redundancies.

In addition to the closure in Jämsä, UPM plans to reorganise production on its manufacturing sites in Kymi, Kaukaa and Pietarsaari which may lead to reduction of 110 employees. Restructuring in other units may lead to the reduction of an additional 50 jobs in Valkeakoski. 

According to the company, restructuring is needed since the profitability of paper manufacturing in Finland has decreased steadily during the past years due to decreased demand for paper products, notably as a result of declining newspaper sales. In addition, the COVID-19 pandemic caused a sudden drop in demand for paper products.  

The company criticised the Finnish taxation system and high labour costs, arguing that these are factors that have had a significant negative impact on paper manufacturing. The Paperworkers’ Union (in Finnish 'Paperiliitto') argued that productivity of paper manufacturing in Finland is good due to modern technology and highly skilled employees. According to them, labour costs make up proximately 7% of the total costs of paper manufacturing due to significant reductions of workforce in the past.   In addition to restructuring in Finland, UPM announced its plan to sell its production plant in Wales. InJuly 2020, UPM closed down its production site in Jyväskylä, central Finland.   


Sources

Citation

Eurofound (2020), UPM, Closure in Finland, factsheet number 101555, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/101555.