UPM seeks growth in attractive plywood segments by

(UPM, Helsinki, Finland, 24 October 2017 at 08:15 EET) - UPM further strengthens its position as the leading plywood manufacturer in Europe. Following successful growth investments in Finland and Estonia over the past few years, UPM expands its Chudovo plywood mill in Russia by investing EUR 50 million. The project will increase the mill's production capacity by 45,000 to 155,000 m ³ while also broadening the mill's product portfolio. In addition to the production capacity growth, a new bio heat boiler will be built at the mill site.

"The expansion of the Chudovo mill is an important step in executing our strategy. Our goal is to further strengthen our leading position in priority end-use segments. New competitive birch plywood capacity improves our ability to respond to growing demand in our key markets, while delivering industry-leading quality and reliability," says Mika Sillanpää , Executive Vice President of UPM Plywood.

The expansion project consists of new plywood production lines including all machinery needed for veneer and plywood manufacturing. The expansion will be realised using mainly existing facilities, infrastructure and resources. More than 40% of the subcontracting related to the investment will be sourced locally. The expansion is estimated to create roughly 100 new jobs both directly at the mill and indirectly, for example, in wood procurement and logistics.

The new 19 MW bio heat boiler will decrease the consumption of fossil fuels at the mill. Most of the heat energy for the mill will be generated by using biological by-products from plywood production such as bark, chips and dust.

The project is estimated to be completed by the end of 2019. During the expansion production at the mill will continue normally.

For more information, please contact: Mika Kekki, Vice President, Production & Operations, UPM Plywood, tel. +358 40 545 5803 Anatoli Zhukovets, General Director, UPM Chudovo, tel. +7 921194 60 80

UPM, Media Relations Mon-Fri 9.00-16.00 EET tel. +358 40 588 3284 media@upm.com

UPM Chudovo UPM Chudovo mill is one of the nine UPM Plywood mills. It employs directly approximately 600 people and the annual capacity is 110,000 m ³ of birch plywood. Annual birch veneer log supply is 300,000 m ³ . All the wood for the mill is sourced from sustainably managed forests. UPM Chudovo has FSC certificate on controlled wood sourcing.

UPM Chudovo plywood mill produces coated and uncoated birch WISA plywood e.g. for construction, vehicle flooring and LNG carriers. The mill's products are granted international VTT's and DIN Otto Graf's certificates, the Governmental Standard equivalence certificate and the Russian Federation health certificate. The mill also received DNV ISO 9001 and 14000. In addition, the mill is following the OHSAS 18001 standard.

UPM Chudovo mill is the largest taxpayer and one of the biggest industrial employers in Chudovo region. The mill's history dates back to 1990 as the first Soviet-Finnish joint venture. UPM became its' sole owner in 2005. - www.wisaplywood.com/ru

UPM in Russia UPM has been trading with Russia from the end of the 19 ^th century. Currently UPM exports paper and label materials to Russia, sources wood and owns plywood mill in Novgorod region. Trade operations and logistics are managed from offices located in Moscow and Saint-Petersburg. - www.upm.ru

UPM Plywood manufactures high-quality WISA® plywood and veneer products mainly for construction and transport industries and the new thermo-formable UPM Grada® wood material for the form pressing industry. The sales of UPM Plywood in 2016 were EUR 444 million and it has about 2,400 employees. UPM Plywood has six plywood mills and a veneer mill in Finland, and plywood mills in Russia and Estonia - www.wisaplywood.com , www.upmgrada.com

UPM Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Paper ENA and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 19,300 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM - The Biofore Company - www.upm.com

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