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UPM’s new business structure targets €400 million profit improvement

A “clear change in profitability” is the aim of UPM’s new business structure.

A "clear change in profitability" is the aim of UPM’s new business structure. Valid from 1 November 2013, it will consist of the following Business Areas and reporting segments: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and UPM Plywood. Forests and wood procurement will be reported in Other operations.

The new Paper Business Areas will be located at the centers of their markets: UPM Paper Asia will be headquartered in Shanghai, China; and UPM Paper Europe in Augsburg, Germany. The Group Head Office will remain in Helsinki, Finland.

To ensure prompt implementation of profitability improvement and growth plans, a number of appointments have been made in the UPM Group Executive Team, including Kim Poulsen as executive vice president, UPM Paper Asia; Bernd Eikens as executive VP, UPM Paper Europe; and as of 1 September 2013, Tapio Kolunsarka as executive VP of UPM Raflatac.

"Changes in management structure will sharpen the targets and required actions for each business," says Jussi Pesonen, president and CEO of UPM. "We will address the competitive challenge in mature European businesses and drive profitable growth outside Europe and in biorefining. We will also seek to simplify our business portfolio and uncover the value of our assets. These opportunities will be explored in parallel with the profitability improvement and growth initiatives and may involve changes in ownership structures."

Pesonen highlights that since 2007, the Energy, Pulp, Label and Asian Paper businesses have grown by 43%. "These businesses have been not only growing but also profitable and enjoy positive long term fundamentals."

The improvement target of €400 million will be a combination of savings targets and growth initiatives, roughly half and half. The full impact of the programme is expected to materialise by the end of 2014 as compared with the Q2/2013 results.