UPM Paper ENA has announced plans to permanently close paper machine 5 at UPM Blandin in Minnesota, US in a bid to reduce graphic paper capacity.
The closure plan comes as the firm seeks to reduce its the annual coated paper production capacity by approximately 128,000 tons in response to overcapacities in the North American paper market.
Scheduled to be completed by end of Q1 2018, the closure is expected to affect 150 jobs at the site. The firm, however, will continue to operate paper machine 6 at the Blandin site.
Meanwhile, the firm also announced plans to optimize operations at its UPM Nordland Papier and UPM NorService units in Dörpen, Germany, to increase competitiveness.
UPM said: “Streamlining internal processes and investing in automation will enable a sustainable improvement of the fixed cost structure.”
As a result, a total of 223 employees will be laid off in Dörpen at UPM Nordland Papier and UPM NorService.
UPM said it expects the planned actions to result in approximately €30m in annual savings.
UPM Paper ENA executive vice-president Winfried Schaur said: "During the last years the demand for graphic papers has been declining – and the decline is expected to continue.
“Our employees have always given their best, even under challenging market conditions, and we regret the impact of the planned measures on our personnel in Dörpen and Blandin.
“However, we have to adjust our operations to prospective customer demand and continuously improve our operations to safeguard the success of UPM Paper ENA in the long run.”