Paper maker UPM is to close its Myllykoski paper mill with job cuts affecting almost 400 people.

The company says the permanent closure by the end of this year follows attempts to negotiate continuation of operations with employees.  Overlapping operations in paper sales, the supply chain and its functions in Finland will also be cut.

UPM says personnel reductions will affect 371 people at the Myllykoski paper mill and 21 people at Myllykoski Corporation and Myllykoski Sales Nordic, with reductions starting in January.

The company will implement a programme called ‘from job to job’ to support its employees during the transition.

Paper business group president Jyrki Ovaska says the Myllykoski mill had been making a loss for several years despite numerous measures: “The mill’s cost competitiveness is weak – the high costs of raw materials and energy have further increased total costs and permanently damaged the mill's opportunities to reach a profitable level,” he says.

The declining economic situation has worsened the mill's situation this autumn, and alternative, profitable uses for the mill inside UPM’s businesses have not been found.

“This is a heavy day for Myllykoski people. However, it’s important to face the realities and to look ahead. UPM will support re-employment and training of Myllykoski personnel," says Ovaska.

As part of the ‘Job to job’ programme, 1.5 million Euros will be invested in training, and those losing their jobs will be encouraged to become entrepreneurs and offered a business start-up allowance.