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Biggest paper recycling mill in Finland closing its doors

Finland is closing its Kaipola paper mill, which is the country’s largest user of recycled fibre, by the end of this year. To move is meant to help ensure future competitiveness of UPM Communication Papers.

The mill in Jämsä processes almost half of all paper scrap collected from Finland’s consumers: over 200 000 tonnes of material per annum. In addition to newsprint, its recycled paper is used in the manufacture of tissue paper.

The group is also looking for a buyer for its Shotton mill in north Wales which has the capacity to  produce 250 000 tonnes of newsprint annually. UPM believes the site can be reconfigured for other products.

UPM Communication Papers has announced an overall package of changes globally that could mean the loss of 840 jobs and savings of EUR 75 million.

Closure of the UPM Kaipola facility will mean the loss of 450 jobs and a cut in capacity of 720 000 tonnes of graphic paper – 450 000 tonnes of newsprint and 270 000 tonnes of coated mechanical paper. This effectively signals the end of production of plain newsprint in Finland.

‘The amount is significant. We are currently considering new uses,’ says Petri Aaltonen, ceo of Encore Environmental Services, representing the producer community.

‘This is devastating news to Kaipola,’ says Winfried Schaur, executive vice president of UPM. While complimenting the mill’s workforce and the plant’s efficiency, he blames external factors such as high logistics costs, the regulatory and tax burden, labour and increasing fibre costs for making it ‘the least competitive’ of UPM’s paper mills.

‘It is good to bear in mind that the world markets for graphic papers still exceed 70 million tonnes, more than 20 million tonnes of which are in Europe,’ Schaur adds. ‘Even if declining, these markets offer profitable business and good cash flow for mills with a competitive cost structure.’

According to recent figures published by the Pirkanmaa ELY Center, scrap paper collections in Finland fell 12.7% in 2019 compared to the previous year. 

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