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UPM focuses on new business structure

Source: UPM
Source: UPM
06 Aug 2013 − 

UPM will streamline its business portfolio and sharpen its product focus to address market challenges and boost profitability.

UPM has announced changes to the corporate structure in order to sharpen its operational focus, facilitate portfolio changes and drive profit growth. According to UPM, the new simplified business structure is coming into effect on 1 November 2013 and will consist of six main business areas, including Biorefining, Energy, Raflatac, Paper Asia, Paper Europe, and Plywood.

The Paper Europe segment will be controlled from Augsburg in future, Paper Asia's head office will be in Shanghai, and the group headquarters will remain in Helsinki, the company explained. "Although the Paper Business Group has been able to improve efficiency and managed change and integration processes professionally, we now need to move into a more simple and scalable structure to improve performance further," reported Jussi Pesonen, president and CEO of UPM. This restructuring could entail changes in ownership structures, he added.

The resolution to change UPM has been made, said Pesonen. The simplified corporate architecture will generate cost savings and raise profitability by €200m. At present, there are no further plans for closing down production capacity to achieve this aim. Segments in which the group plans to invest in future are biofuels, woodfree speciality papers in China, and Raflatac. The production volume is to be stepped up in existing pulp mills as well. The estimated cost of these investment projects is €680m over the next three years.

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