UPM has announced a further reduction in uncoated magazine paper capacity and has brought forward the shutdown of its Austrian newsprint mill.

PM 6 at UPM’s Schongau mill in Germany will be shuttered, taking out some 165,000tpa of uncoated publication paper production. 

The shutdown is expected to be effective by the end of Q2, with 135 jobs likely to go. 

Production on PM 7 and PM 9 at Schongau will continue, with those machines described as “cost competitive”. 

The shutdown of PM 6 will reduce UPM’s uncoated publication paper machines to six across its mills in Germany and Finland, with total annual capacity of 1.8m tonnes.

UPM agreed to sell its Steyrermühl newsprint mill in Austria to Heinzel last summer, with the site set to be converted to produce its Starkraft white and brown kraft papers for flexible packaging. 

Plans to cease newsprint manufacturing at Steyrermühl have now been brought forward by six months, and it will now stop production by the end of Q2.

The mill had previously produced up to 320,000tpa.

Massimo Reynaudo, executive vice president at UPM Communication Papers, said UPM aimed to handle the restructuring measures in a socially responsible manner.

“The continued long-term decline in graphic paper demand forces us to continue our efforts to ensure cost competitive production and that our assets are in efficient use in all circumstances. We are aware that these are difficult news for our employees who have demonstrated their loyalty and commitment over such a long time,” he said. 

“In a declining market, competitiveness in company operations is key to substantiating our long-term commitment to the publication paper market and to remain as a reliable partner to our customers.”

The Schongau restructure will involve restructuring charges of €26m (£22.8m), while the revised shutdown schedule at Steyrermühl will involve a €10m charge. 

UPM said it expected to make annual fixed cost savings of €13m. 

Heinzel will take over the Steyrermühl site from on 1January 2024. 

UPM has worldwide sales of around €11.7bn and employs 17,200.