UPM sells Shotton paper mill in Wales to Turkish Eren Paper

250,000 tons of newsprint to be shut down on 30 September 2021

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UPM Shotton Paper Mill
UPM Shotton Paper Mill

UPM has signed an agreement to sell its Shotton newsprint mill site in North Wales, United Kingdom, and all related assets to Eren Paper Ltd, a subsidiary of Modern Karton Sanayi Ve Ticaret A.Ş., the containerboard and corrugated packaging business of the Turkish industrial conglomerate Eren Holding (“Eren”). The closing of the transaction is planned for late Q3 2021.

Eren’s plan is to integrate the Shotton site into its existing business units and make a further investment. All 190 employees currently working at UPM Shotton will be part of the transaction.

Newsprint production is planned to stop by 30 September 2021, and Eren will take over responsibility for the mill as of 1 October 2021. While Eren will communicate the concrete timeline for the conversion plans, it is already known that the Renewable Energy Generation plant and Material Recovery and Recycling Facility (MRRF) will continue operations throughout the conversion process, corresponding to their role in the regional utility infrastructure.

UPM and Eren collaboration supports the transition with stakeholders

“We are very pleased with this agreement. It will provide a long-term future for the employees at our Shotton paper mill and a continued use of the site infrastructure. It will help UPM to further consolidate its newsprint production capacity while leveraging the value of the site and its assets. This sale will also support Eren in expanding its business in the UK market,” says Winfried Schaur, Executive Vice President of UPM Communication Papers.

“The negotiations with Eren have been transparent and fair throughout, and we have agreed close collaboration over the coming months to support the transition with both internal and external stakeholders.” 

UPM plans to continue serving UK newsprint customers after the sale and will continue sourcing RCP in the UK. In addition, UPM and Eren have agreed to cooperate closely during the transition period to ensure a smooth transfer of the operations.

The transaction will reduce UPM’s annual newsprint capacity by 250,000 tonnes and fixed costs by EUR 30 million upon closing the sale. The fixed costs reduction is in addition to the earlier communicated fixed costs savings impact of EUR 130 million from actions implemented during H2 2020 and 2021.

 

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