UPM sells its Schwedt mill to LEIPA Georg Leinfelder GmbH

UPM has signed an agreement to sell its Schwedt newsprint mill site and relevant assets to LEIPA Georg Leinfelder GmbH for the aim of a conversion into liner production. The entire personnel of Schwedt mill – actually about 240 people - will transfer to LEIPA as old employees. The transaction price is EUR 70 million. The transaction is subject to customary third party approvals.
As part of the transaction, the parties have agreed to enter into a contract manufacturing agreement for newsprint for a transition period which would end latest at the end of 2017. The mill’s capacity is 280,000 tonnes of newsprint annually.

LEIPA will convert the mill into liner production. The planned production capacity would be approximately 450,000 tonnes of liner annually.
“The negotiations with LEIPA have proceeded well and we believe that the transaction will bring benefits to the employees in the form of future employment at a converted site”, says Winfried Schaur, Executive Vice President, UPM Paper ENA.

“With yesterday’s signing of the purchase contract following very intensive and focussed negotiations, an important milestone has been achieved. Our current planning shows a start of production in the fourth quarter of 2017, mean that we are well on the way to further extending our leading position as a benchmark producer in the growth segment Testliner”, says Peter Probst, CEO of LEIPA Group GmbH.