Marko Summanen on Upcoming Strikes at UPM: “Current Negotiating Position Looks Difficult to Reach Agreement”

UPM is trying to negotiate individual contracts for each of their business divisions in pulp & paper which unions are against

UPM Lappeenranta Biorefinery

“The Finnish Paperworkers’ Union has said it will go on strike on January 1, 2022 for three weeks unless an agreement is reached for all UPM employees, regardless of which business unit they work in,” Marko Summanen, Vice President Business Development, Europe at Fisher International, told the “This would hit most UPM’s market pulp businesses.

“The company’s other paper business units are Specialty Papers and Communication Papers. Most of other grades UPM can supply from mills outside Finland during the strike if they have capacities available.

“It should be noted that traditionally the large Finnish paper producers Stora Enso, Metsä Group and UPM have been organized as a single industry negotiating partner against the Paperworkers’ Union. This year, they withdrew themselves from this system and are now making only company specific contracts.

“The first two Finnish companies have already signed wide contracts with the union, but in the case of UPM, the current position for negotiations looks difficult to reach agreement. UPM is trying to apply different agreements for its different businesses as the same terms do not apply to all company’s business units: biofuels are in development stage, pulp is growing and demand for paper is declining by about five percent a year. Therefore, it will have a huge impact on paper union, whether the contract is company wide or specific for each business unit.

Metsä Group‘s parent company Metsäliitto co-operative has more than 100,000 forest owners, which anchors the company in Finland. This is evidenced by the billion-dollar investments in Äänekoski and Kemi, as well as the modern sawmill in Rauma.

Stora Enso’s Varkaus mill in Finland

“Stora Enso has a Swedish negotiated personnel policy and growing business in Finland. Just this week Stora Enso announced containerboard investment project in Varkaus mill. They are in process of re-vamping the Oulu mill with major capex spending. Imatra mill is a stronghold of the company’s consumer board.

UPM, on the other hand, has said many times that in Finland their costs are too high, labor often mentioned. At the same time, their main investments are in Germany (Biofuels) and Uruguay (Market Pulp). UPM has also communicated that paper making is not a key part of their long term plan, while they want to transfer themselves into other segments of sustainable bio based products like next generation biofuels. Different culture and different anchoring places compared to other two big companies operating in Finland can make it hard for the paper union to reach what they want. Time will tell.

“In general, this situation is unfavorable for the Finnish paper industry. Trade unions have greater freedom to participate in strikes and even organize strikes of support from other unions such as ports and transport to maintain the blockade of UPM‘s paper businesses. Many people think that this is an unfair system in the Finnish legal system and work culture. I believe that this kind of event does not encourage UPM to invest in Finland, as the company has reported on several occasions.

“The strikes will accelerate the use of robotics and increase the level of automation in Finland’s paper industry. The COVID-19 pandemic has also prompted industrial companies to think about it in order to prevent production disruptions.”

UPD from 21 Jan, 2022: “This strike has been extended today until 19th of February. Maybe even longer than that unless UPM seeks contract with money but in form they suggest,” Marko added.

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