UPM Establishes New Company in Finland Focusing on Forestry Work

Helsinki, Finland, 26 January 2007 -– UPM is establishing a new company in Finland, which will specialize on forestry work. The company -- Silvesta -- will focus on the planning, implementation, and marketing of practical forestry work. It will also seek to strongly develop practical forestry work and thus the profitability of forestry. Once the company has started operations, the service range to forestry service customers and city-based forest owners, as well as to company's own purposes will be extended.

UPM has agreed with its forestry workers that they will transfer as of 01 May 2007 to the payroll of Silvesta Oy, a subsidiary of UPM, with old terms and conditions of employment. A company-specific agreement has been made with the forestry workers that includes significant improvements and flexibility to the operations. The agreement provides possibilities to develop remuneration and working hour arrangements, and to increase the regional mobility of the forestry workers. This allows for increased operative efficiency, and the practices agreed on also improve the forestry workers' employment situation. The negotiations on reorganization of practical forestry work were launched in autumn 2006.

"The present agreement made with the forestry workers is a solid foundation for developing operations," states Markku Houni, administration director, forestry and wood sourcing in Finland. "The negotiations included an open discussion of forestry work from different angles. The agreement with the forestry workers to develop operations is unprejudiced and seeks to improve the overall efficiency of practical forestry work," he said.

"We are satisfied with the outcome of the negotiations," state the representatives of UPM's forestry workers, Lasse Vertanen and Heikki Nupponen. "In the autumn negotiation we objected to the company's proposal to transfer the forestry workers against their will to the payroll of small and unstable companies. The newly established company is active in UPM's entire operating area and stands on solid ground."

"Through this arrangement, we will achieve our stated initial objectives. UPM's Finnish forestry department focuses on wood procurement and forest services, and the management and sustainable utilisation of forest assets," says Sixten Sunabacka, vice president, UPM forestry and wood sourcing in Finland. "We will purchase any forestry services we need from Silvesta and other service providers.

UPM owns 920,000 hectares of forestry land in Finland. In addition, the company has approximately 9000 separate forestry service agreements with private forest owners. "Managing these forests will require an increasing amount of forestry work in the coming years," predicts Sunabacka. "Therefore, we will engage in closer cooperation with various forestry service companies and procure more services from them."