UPM to Cut Power Use by 3.5% After Shutting Paper Machines

UPM-Kymmene Oyj’s closing of two paper production machines in Finland and Germany to save money may cut its annual global power use by 3.5 percent, according to data from Europe’s second-biggest paper maker.

UPM’s annual electricity consumption in Finland may fall 329 gigawatt-hours, and by 235 gigawatt-hours in Germany, based on data in its 2011 environmental report. The Helsinki-based company’s global electricity use was 15,900 gigawatt-hours in 2011, according to its annual report.

Finland’s biggest electricity user is closing newsprint machine number 3 in Rauma, and magazine paper machine number 4 in Ettringen, Germany to cut costs amid falling demand, UPM said today in its first-quarter earnings statement. Power use in Finland’s forestry sector slumped 28 percent to 20,100 gigawatt-hours from 2007 through 2012 after producers including UPM and Stora Enso Oyj shut unprofitable plants.

UPM’s machine closures will cut annual production capacity by 275,000 metric tons in Finland and 175,000 tons in Germany. The company used 1.34 megawatt-hours of power on average to produce one ton of paper, according to its 2011 environmental report.

Antti Ylitalo, a spokesman for the Helsinki-based paper maker, declined to comment on UPM’s energy use, citing company policy.

The paper maker is Finland’s second-biggest electricity producer, and a net seller of power in Finland and Uruguay.

Finnish, Swedish and Norwegian forestry industries will use about 43,000 gigawatt-hours of power this year, down from 55,000 gigawatt-hours in 2007, as a result of capacity closures, according to Markedskraft AS, an Arendal, Norway-based firm that provides analysis of Nordic power prices.

(Adds analyst estimates in seventh paragraph.)
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