Executive vice-president and chief financial officer Veli-Matti Mynttinen said the group planned to cut personnel in back-office facilities, warehousing and transportation, but would not reveal specific numbers.

Map Merchant includes James McNaughton, Premier Paper and MoDo
Merchants.

The plans were revealed as part of a restructuring of M-reals operations, including Zanders Feinpapiere, through which it aims to provide 190m ( 295m) of annual savings.

Mynttinen would also not be drawn on the warehouses to close, but said all of the reductions and closures would be phased in across late 2002 and through 2003.

"The number of our warehouses in the UK needs to be considerably reduced, and we are now combining logistics between two of the merchants," he said.

M-real also outlined its final plans for the re-organisation of Zanders, which will see staffing levels reduced by 800, 400 of which have already been cut.

The restructure will also affect Zanders Reflex and Gohrsmuhle mills in Germ-any, and will involve machine upgrades to improve production facilities.

M-real has also completed the sale of its 50% holding in the Papierfabrik Albbruck mill in Germany to Myllykoski for 151m.

Story by Andy Scott