August 12, 2008 / 12:43 PM / 11 years ago

Paper maker UPM eyes consolidation options: report

HELSINKI (Reuters) - Magazine paper maker UPM-Kymmene UPM1V.HE is studying alternatives for consolidation, its chief executive was quoted as saying on Tuesday.

“We are looking at alternatives, which with hard work and optimization could make the company better in the future,” CEO Jussi Pesonen told Finnish news agency Startel.

“We are interested in consolidation combinations which are profitable and would increase shareholder value,” he said.

He said consolidation is needed to improve profitability in the sector, where overcapacity has kept a lid on prices in recent years.

“Consolidation is integrally linked to improving competitiveness in the developed markets, especially in the European ones,” Pesonen said.

Pesonen said the forestry industry would likely shrink in Finland, where it accounts for almost 20 percent of exports.

“I do not think that the forestry industry will continue in Finland on the current scale,” he said and added: “In Finland, at the current energy, oil, raw material and wood prices there have to be some structural changes.”

Reporting by Sakari Suoninen; Editing by Erica Billingham

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