UPM and South African forestry firm Sappi finalise graphic paper joint venture

Finnish forestry company UPM and South Africa’s Sappi have signed a binding agreement to establish a 50-50 joint venture for graphic paper production, following a preliminary deal announced in December, Yle reports.

The new company will absorb UPM’s entire Communication Papers business—including eight mills in Europe and the US—as well as Sappi’s European graphic paper operations. UPM’s Finnish facilities in Kouvola, Rauma, and Jämsänkoski will transfer to the venture, alongside Sappi’s single Finnish plant in Lohja.

UPM estimates the partnership will yield annual synergies of around €100 million through optimised production, logistics, and product portfolio streamlining. CEO Massimo Reynaudo stated the move aims to secure long-term supply reliability for European graphic paper customers and strengthen the continent’s industry competitiveness.

The deal remains subject to approval by Sappi Limited shareholders, the European Commission, and regulatory bodies in the US and China, with final clearance expected by year-end.