It will be interesting to see how capacity is closed if/when the deal reaches the finish line. Personally, I bet the cuts will initially target Sappi’s current units, while UPM’s facilities will likely avoid closures at first.
My own guess list:
- SAPPI’s entire Kirkniemi mill to be closed. There is significant overcapacity in LWC (Lightweight Coated paper) in Europe. UPM’s Rauma mill is more efficient and located in a better position logistically. Other current UPM LWC mills are located in the middle of the core European market.
- SAPPI’s Maastricht mill to be closed entirely. It partly produces packaging boards that do not fit the joint venture’s product portfolio, and at the same time, some of the overcapacity in fine papers can be reduced.
In newsprint, the market is better balanced and there is no acute need to shut down lines.