New owner Heinzel plans to produce packaging materials at the Kymmene newsprint mill it is buying from UPM.

Terms have not been revealed for the deal under which UPM has sold its UPM Kymmene-Austria subsidiary to Heinzel Group, a leading pulp, packaging and paper producer and trader in Central and Eastern Europe.

Included is the Steyrermühl mill site, which has 400 employees and a newsprint machine capable of producing 320,000 tonnes a year, as well as its 370,000m3 Steyrermühl sawmill facility.

UPM says the transaction is due to close at the end of 2023, when newsprint production at Steyrermühl will cease “Until then, all operations continue as is”.

The two will now engage in “deeper discussions” on specific technical and organisational aspects of the site to plan the future of the mill. UPM says Heinzel will operate the site “outside of graphic papers” in conjunction with its nearby Laakirchen mill, but will add packaging materials to its portfolio.

UPM Communication Papers executive vice president Massimo Reynaudo says the agreement benefits both companies 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.”

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