UPM aims to boost growth through an optimized business portfolio

UPM announced its intention to enhance its growth focus through a renewed business portfolio targeting expanding global markets. The company, recognized as a global provider of material-based solutions, stated that the planned graphic paper joint venture with Sappi will better position its communication paper business to continue creating value while reducing direct exposure to the declining markets of Europe and North America. According to UPM President and CEO Massimo Reynaudo, this initiative marks a new phase in the company’s transformation. He noted that UPM has evolved over the past decade from a European paper manufacturer into a global leader offering an extensive portfolio of renewable material solutions. Reynaudo highlighted that UPM’s current mix of businesses responds to growing market demand and that the company has successfully expanded into new sectors with a strong sustainability focus.

If the joint venture is finalized, the future UPM would operate with a diversified portfolio centered on renewable fibers, advanced materials and decarbonization solutions. These business areas have grown above GDP levels over the past decade, recording a 4.4% compound annual sales growth rate between 2014 and 2024. UPM Fibres supplies hardwood and softwood pulp and sustainable sawn timber, supported by competitive assets that enable increased capital efficiency and strong cash generation. Fibres South operates highly productive mills and plantations, while Fibres North expands the offering with softwood pulp supported by well-maintained and flexible assets. UPM’s advanced materials units provide technically demanding solutions for expanding markets, including UPM Adhesive Materials, which delivers high-quality self-adhesive paper and film products, and UPM Specialty Papers, which supplies specialty packaging materials, labeling substrates and industrial release liners, with notable presence in Asia-Pacific.

 

In the field of decarbonization, UPM Energy provides CO₂-free nuclear baseload power and flexible hydropower, while UPM Biorefining develops advanced renewable fuels and bio-based chemicals. The company emphasized progress at its new biorefinery in Leuna, Germany, which is expected to begin customer deliveries in the fourth quarter of 2025. UPM also indicated that the joint venture with Sappi could be finalized by late 2026, subject to regulatory approval. In parallel, UPM Plywood remains under strategic review to evaluate long-term value-creation options, with completion also expected in 2026. Both businesses will continue to operate normally during this period.

In the near term, UPM will focus on strengthening competitiveness, improving capital efficiency and reinforcing its balance sheet. The company plans to leverage its recently expanded asset base while maintaining a balanced capital allocation strategy centered on targeted investments, attractive shareholder returns and financial solidity.