UPM’s Q3/2023 Sales Decline, but Optimism Shines Through

UPM Reports Significant Decline in Net Sales and Operating Profit in Q3

UPM, the Finnish forest industry company, has reported a significant decline in net sales and operating profit for the July-September period. Net sales fell by 24 percent to 2.6 billion euros compared to the previous year, while comparable operating profit dropped by 72 percent to 220 million euros. The company’s performance for the January-September period also showed a decline, with net sales decreasing by 7 percent to 7.9 billion euros and comparable operating profit falling by 52 percent to 689 million euros.

The decline in UPM’s net sales and operating profit can be attributed to various factors, including the decrease in pulp and electricity sales prices. However, despite these challenges, the company remains optimistic about the future. UPM is particularly hopeful about the start of production at the UPM Paso de los Toros pulp mill, which is expected to contribute to the company’s growth and profitability.

UPM Paso de los Toros pulp mill, located in Uruguay, is a significant investment for UPM. The mill is expected to have a production capacity of approximately 2.1 million tonnes of eucalyptus pulp per year, making it one of the largest pulp mills in the world. The construction of the mill is progressing according to plan, and UPM aims to start production in the second half of 2022.

The UPM Paso de los Toros pulp mill is not only expected to boost UPM’s production capacity but also to have a positive impact on the local economy. The construction of the mill has already created numerous job opportunities, and once operational, it is expected to provide employment to around 10,000 people directly and indirectly.

In addition to the UPM Paso de los Toros pulp mill, UPM is also investing in other growth areas. The company aims to strengthen its position in the biofuels market by expanding its UPM Lappeenranta Biorefinery in Finland. The biorefinery, which currently produces renewable diesel and naphtha, is expected to increase its production capacity and diversify its product portfolio.

Furthermore, UPM is actively exploring opportunities in the circular economy. The company is developing innovative solutions to replace fossil-based materials with renewable and recyclable alternatives. UPM’s Biofore concept, which promotes the use of renewable materials in various industries, has gained recognition and is contributing to the company’s sustainable growth.

UPM’s commitment to sustainability is also reflected in its efforts to reduce greenhouse gas emissions. The company has set ambitious targets to decrease its carbon dioxide emissions and improve energy efficiency. UPM aims to achieve these targets through continuous investments in cleaner technologies and processes.

Overall, despite the challenges faced in the July-September period, UPM remains optimistic about its future prospects. The start of production at the UPM Paso de los Toros pulp mill, along with investments in biofuels and the circular economy, are expected to drive the company’s growth and profitability. With its focus on sustainability and innovation, UPM is well-positioned to navigate the changing market dynamics and continue its success in the forest industry sector.

John O Mahony

John O Mahony

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