UPM proceeds with Changshu investment

Since then the investment scope has been revised by specifying more focused infrastructure investments. As such, instead of constructing a new power plant, UPM will upgrade existing boilers providing opportunity to consider more environmentally effective fuels or options for the mill’s energy supply in the future. The mill also intends to utilize existing facilities more effectively instead of building new infrastructure.

The new machine is capable of producing up to 360,000 tonnes of specialty papers and labelling materials. The machine will start up at the end of 2015.

With the revised plan the investment cost has fallen from 390 million EUR to 277 million EUR.

Jussi Pesonen, UPM’s chief executive officer and president, said: ‘We have set ourselves clear targets for focused growth initiatives over the next three years in biofuels, specialty papers in Asia, label materials and pulp production. 

‘With these initiatives we are targeting an additional 200 million EUR EBITDA when in full operation. The return on the Changshu investment is attractive and is expected to bring a significant contribution to our EBITDA growth target.

Kim Poulsen, executive vice-president at UPM Paper Asia, added: ‘The Changshu investment is targeted to serve growing end uses in Asia markets with wide range of release liner materials and specialty products. This investment is implemented in our existing platform in Changshu, and will give us competitive production cost base through local synergies.

‘The business fundamentals for the investment continue to be positive as both release liner materials and uncoated wood-free office and specialty papers enjoy a healthy demand outlook in Asia.’