UPM to invest €160M in Kymi NBSK, BHKP pulp mill in Kouvola, Finland, increasing capacity 170,000 tonnes/year to 700,000 tonnes/year, marking significant part of UPM's target to grow its 3.3 million tonnes/year capacity 10% over next three years

HELSINKI , February 28, 2014 (press release) – UPM invests EUR 160 million in Kymi pulp mill to strengthen its position in the growing end use segments of the global pulp market.

“Kymi is a profitable and competitive pulp mill in comparison with the world’s leading pulp mills. Our EUR 160 million investment will result in a significant capacity increase with competitive costs and low risk,” says UPM’s President and CEO Jussi Pesonen.

“We have set ourselves clear targets for growth initiatives in pulp production, biofuels, speciality papers in Asia and label materials for the coming three years. With these initiatives we are targeting an additional EUR 200 million EBITDA when in full operation. The Kymi investment will bring a significant contribution to this,” says Pesonen.

With the investment Kymi’s annual pulp production capacity will increase by 170,000 tonnes up to 700,000 tonnes of bleached northern softwood and birch pulp. The Kymi investment makes a significant part of UPM’s earlier announced target to reach a 10 % increase in its 3.3 million tonne pulp capacity over the next three years.

During the past few years UPM has established a strong position on the pulp market cooperating with customers in the growing end use segments such as tissue, speciality papers and board. UPM has developed a versatile and commercially competitive pulp portfolio with appealing service offering.

UPM’s competitive and modern facilities in Finland and Uruguay provide a perfect platform for further growth. UPM’s recent sales and marketing cooperation with Canfor Pulp, the capacity expansion of Fray Bentos mill in Uruguay, as well as the investments in Pietarsaari mill in Finland, and now in Kymi, are all supported by healthy market fundamentals.

The investment at Kymi mill will begin immediately comprising a new pulp drying machine, modernisation of the softwood fibre line, a new debarking plant as well as improvements in the energy balance of the Kymi integrate consisting of pulp and paper mills.

The investment will not only benefit the pulp mill but the whole Kymi integrate due to increased resource efficiency and operational flexibility.

“Furthermore, the investment will advance the decoupling of UPM’s pulp and paper businesses, which supports a clear management focus and decision making in both businesses for the short and long term,” says Pesonen.

The Kymi investment is one of the development initiatives with which UPM seeks growth in its profitable businesses as announced on 6 August 2013.

UPM

Through the integration of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 21,000 people and its annual sales are approximately € 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM – The Biofore Company – www.upm.com

UPM Pulp

UPM is one of the world’s leading producers of northern softwood, birch and eucalyptus pulp supplying global customers mainly in the growing end use segments such as tissue, speciality papers and board through its own sales and technical service network close to the customers. UPM Pulp operates four modern pulp mills, three in Finland and one in Uruguay as well as eucalyptus plantations in Uruguay. UPM Pulp employs approximately 1,500 people and has an annual pulp production capacity of 3.3 million tonnes. Pulp Business is part of the UPM Biorefining Business Area. To learn more, visit: www.upm.com/pulp

UPM Kymi

UPM Kymi is modern and environmentally efficient mill integrate producing pulp, paper and energy. Kymi produces bleached softwood and hardwood kraft pulp as well as coated and uncoated fine paper. UPM Kymi employs about 600 people and is located in south-east Finland in Kouvola.

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