UPM to continue investing in the labelstock business

Raflatac to build a facility in China

UPM continues to invest in the fast-growing labelstock business. UPM's Raflatac will build a world class pressure sensitive labelstock production facility in Changshu, adjacent to UPM's existing paper mill in the Jiangsu province, China. Raflatac targets to become the preferred supplier of pressure sensitive labelstock in the region by providing its full product range and highest quality service also in China. For UPM the investment means enhanced and more diversified presence in the Chinese market. The total value of the investment is approximately USD 40 million.

Raflatac will start to apply permits for the new factory immediately and the target is to get the factory up and running at the beginning of 2007. Raflatac's current production facility in Shanghai will be closed after the start-up of the new Changshu factory.

"The announced investment highlights our ambition to become the preferred supplier of pressure sensitive labelstock in the world. We want to be able to provide our offering globally in all key markets. We expect the demand for pressure sensitive labelstock in China to grow strongly in the coming years driven by both strong export industry and quickly developing domestic consumer goods market", says Heikki Pikkarainen, President of Raflatac.

"This investment is a demonstration of our strong, long-term commitment to the Chinese market. Our new facility will form an excellent basis for us to provide top quality products and best-in-class service in order to help our Chinese customers grow their businesses, "says Jussi Vanhanen, Senior Vice President, Raflatac Asia Pacific.

For further information, please contact:
Mr Heikki Pikkarainen, President, Raflatac, tel. +358 40 760 5758
Mr Jussi Vanhanen, Senior Vice President, Raflatac Asia-Pacific, tel. +86 1381 6117447

UPM
Corporate  Communications
September 12, 2005

Raflatac in brief
As one of the world’s leading suppliers of paper-based and filmic pressure sensitive labelstock, Raflatac develops and manufactures label materials for product and information labelling. Raflatac has 2,200 employees and its net sales for 2004 was about EUR 800 million. The company has factories on five continents and a wide network of terminals and sales offices worldwide. Raflatac is part of the UPM Group.

UPM in brief
UPM is one of the world’s leading producers of printing papers and the clear market leader in magazine papers. The Group's net sales in 2004 were nearly EUR 10 billion with more than 33,000 employees. UPM's main products include printing papers, converting materials and wood products. The company has production plants in 15 countries and its main market areas are Europe and North America. Currently UPM total investments in China are exceeding 1 billion USD. The company operates with two publication paper machines at Changshu paper mill. In addition, UPM subsidiary WalkiWisa is currently building a converting factory for packaging paper in Changshu. UPM's shares are listed on the Helsinki and New York stock exchanges. Further information on the company's web pages www.upm-kymmene.com.