UPM sells Austrian site to Heinzel

Richard Stuart-Turner
Tuesday, June 21, 2022

UPM has signed an agreement to sell 100% of the shares of its Austrian subsidiary UPM Kymmene-Austria to pulp, packaging, and paper producer and trader the Heinzel Group.

The Steyrermühl site employs around 400 staff. Image: Heinzel
The Steyrermühl site employs around 400 staff. Image: Heinzel

Announced today (21 June), the transaction comprises the UPM Steyrermühl site, which employs around 400 staff, the newsprint paper machine that has an annual capacity of 320,000 tonnes, and the Steyrermühl sawmill operations that have an annual timber capacity of 370,000m3.

The closing of the transaction and end of newsprint production at UPM Steyrermühl are planned for the end of 2023. Heinzel is planning to take over responsibility for the mill after closing, with all operations continuing as normal until then.

The value of the deal, which is contingent on approval from relevant competition authorities, has not been disclosed.

UPM and Heinzel Group said they will now engage in deeper discussions on specific technical and organisational aspects of the site to plan the future of the mill.

Heinzel plans to operate the UPM Steyrermühl site outside of graphic papers as an integrate together with its Laakirchen mill. It is considering the production of packaging materials to complement its existing product portfolio, but its concrete plans will be outlined by the business as soon as they have been concluded.

“The agreement benefits both UPM and Heinzel and supports the development of their businesses in line with market needs. This agreement enables UPM to adapt its newsprint paper production to the long-term market development while leveraging the high value of the Steyrermühl site,” said Massimo Reynaudo, executive vice president of UPM Communication Papers.

“This will strengthen our market position while improving our financial performance.”

He added: “We are very pleased with the agreement. Heinzel is a solid and successful player in the industry and will provide a long-term future for the Steyrermühl site. We will continue to collaborate closely with Heinzel to ensure a smooth transition and enable the strategic development of the site as part of an integrate operated by Heinzel.”

UPM added it will remain committed to the newsprint business, continuing newsprint production at its Schongau, Ettringen, Hürth and Jämsänkoski mills.

Heinzel Group currently produces a range of papers for flexible packing and rigid packaging at its sites in Pöls, Laakirchen, and Raubling.

“In Steyrermühl, we will be looking at complementing our existing products. We see great potential in the fast-growing markets for sustainable packaging papers,” said Heinzel Group CEO Sebastian Heinzel.

Heinzel is also considering developing Steyrermühl into a supply centre for heat and energy for both the Laakirchen paper mill and the wider Laakirchen community.

“We plan to develop Steyrermühl into a supplier of sustainable and renewable energy,” said Heinzel Group COO Kurt Maier.

“The recent developments in Europe have shown us all how important it is to reduce our dependency of fossil fuels and gas.”

Separately, EUWID Pulp and Paper reported yesterday that UPM has concluded maintenance tasks that have been taking place at its pulp mills in Finland, and has resumed full-load operation at its sites. Strike action at UPM’s Finnish pulp and paper mills concluded in April after 16 weeks.

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