UPM has sold its Schwedt newsprint mill in eastern Germany to Leipa Georg Leinfelder, which will convert it to liner production.

Leipa is paying 70 million Euros and will take on all the 240 staff. The transaction is subject to customary third party approvals.

During the transaction, newsprint will continue to be made until not later than the end of 2017. Capacity is 280,000 tonnes of newsprint annually.

After conversion, the mill is expected to produce about 450,000 tonnes of liner a year.

"With this transaction UPM and Leipa will have an improved opportunity to develop their businesses to meet the market needs," UPM Paper ENA executive vice president Winfried Schaur says. "The negotiations with LEIPA have proceeded well and we believe that the transaction will bring benefits to the employees in the form of future employment at a converted site."

UPM continues newsprint production at its Chapelle, Kaipola, Hürth, Schongau, Shotton and Steyrermühl mills.

UPM Schwedt manufactures standard newsprint with the annual capacity of 280,000 tonnes. Located in the Eastern part of Germany the mill employs about 240 people.

The family-owned Leipa group companies make about 900,000 tons of graphic paper and packaging paper per year at locations in Schwedt and Schrobenhausen.

• In its interim report for the first quarter of 2016, UPM says "comparable EBIT" increased by 34 per cent to 281 million Euros (210 million), with growth projects contributed to earnings with increasing deliveries in pulp, biofuels, label papers, fine papers in Asia and self-adhesive label materials. Variable and fixed costs decreased significantly, operating cash flow was strong, and net debt and gearing decreased.