UPM plans to axe 750 jobs in its wood products business because of an oversupply of sawn timber on the European market.

The company has started negotiations with staff about the possible closure of Aureskoski sawmill and the Viiala and Kuopio plywood mills, as well as restructuring of the Alholma and Kajaani sawmills. The outcome of talks will be announced in October.

UPM said the development was “extremely regrettable, but necessary” because poor profitability could not be allowed to continue.

&#8220There is prolonged over-supply of sawn timber in the European market, and as a result the profitability of our sawmilling business had been declining”

Harald Finne, president UPM wood products division

Harald Finne, president of UPM’s wood products division, said: “There is prolonged over-supply of sawn timber in the European market, and as a result the profitability of our sawmilling business had been declining for several years. The profitability of our plywood business has also been hit by large over-capacity in Finland and by high costs.”

The Aureskoski and Kajanni sawmills both produce about 200,000m3 of redwood annually, while the Alholma mill has an output of 310,000m3 sawn whitewood and redwood. The Viiala and Kuopio plywood facilities, which UPM describes as small and outdated, each produce some 35,000m3 of birch plywood a year.