After 112 days, the UPM mill strike in Finland has officially ended.

Both UPM and the Paperworkers’ Union came to a collective labor agreement for 5 UPM businesses: UPM Pulp, UPM Communication Papers, UPM Specialty Papers, UPM Raflatac, and UPM Biofuels. 

Estimates from Q1 put the strike costs between €180-€220 million ($192-$235 million USD).

While the paper industry and global supply chains breathe a sigh of relief, it’s only temporary. 

Now the question is how long will it take to get an order from UPM?

The strike ended on April 22, 2022 with production immediately resuming, according to UPM.

Orders previously placed will take precedent and be handled first. UPM says they will begin accepting additional orders as early as week 19. 

But considering the almost 4 month idle time for the mills and machinery, this seems like a fast turnaround time. 

As we’ve discussed in previous articles, preventative maintenance is crucial for paper and pulp mill machines to run at full efficiency, which many do in order to procure a profit. 

Without this service, it takes time to get equipment up and running properly. This can be anywhere from days to weeks or even longer. (A Domtar paper machine took months to restart and become fully operational after being idle for over a year).

While UPM states they cannot give a detailed timetable of the runtimes, a spokesperson for the company mentioned how much less time it takes for pulp mills to ramp up than paper mills.

Their current lead times are 3-4 months for European deliveries and 5 months for overseas deliveries.

But with the damage done to the supply chain due to the massive paper shortage, businesses and companies are in dire need of supplies. 

To make up for lost time (and profits), is it possible we’ll see UPM ramp up production? This depends on the state of their inventories.

Even before the strikes and war in Ukraine began, raw material supplies were at an all time low from the chaos caused by the global pandemic

Given the current raw materials shortages, compiled with the sanctions against Russia, does UPM have enough materials to begin operations at full efficiency? 

As it turns out, Finland obtains a portion of its raw materials from Russia, which it’s currently having to do without. 

The Finnish forest industry imported 9.3 million cubic meters of wood from Russia in 2021. That’s about 10% of its raw material needs. 

The sanctions not only led to a drop in trade between Finland and Russia but ultimately removed these key materials at a time when supplies are already dangerously low.

However, UPM says this isn’t the case.

The company claims that order fulfillment will begin immediately, indicating they have the supplies on hand to accommodate what is likely to be a massive order volume from the months of no production.

Sources say several paper mills will possibly begin production as soon as week 17 and as late as the end of week 18. These include:

  • Jämsänkoski paper mill (630,000 tons per year)
  • Rauma paper mill (665,000 tons per year)
  • Kymi paper mill (700,000 tons per year) 

However, statements from those in the paper and labeling industries claim stock and inventory are nonexistent and have been throughout the entire strike period. 

Will Parker, a label industry expert and FINAT committee member, spoke to Printweek about his disappointments with the entire situation and how it has ultimately affected customers. 

“[N]o planning was given to building stock and inventory to cover the convenience to the customer,” he said. “Had [UPM] built stock, which they could have done last year, the market wouldn’t have felt the pain.”

That pain has left an abundance of damage in its wake, including to one “long-established label printer” in the UK. Parkers, a 70-year old business that produced a wide range of self-adhesive labels, flexible packaging, and more, went into administration before the strike ended. 

Lack of supplies caused by the strike is being cited as one of the main reasons. 

Despite the conflicting information, we’re left wondering: if UPM does get their operations moving quickly, where will the supplies be triaged to first?

UPM accounted for 21% of Europe’s graphic paper capacity and 7% of global volumes in 2021. Based on these numbers, are we likely to see shipments make their way around Europe before they’re shipped overseas? 

European association FINAT appealed to the EU Commission in early April about the anticipation of “severe disruptions in downstream industries like food and pharma” likely to occur in Q2 because of the paper shortage. 

Jules Lejeune, FINAT Managing Director, claimed the issues had a “pan-European dimension that demands a European answer.”  

Or will orders be dispersed evenly across the globe?

Associations like the Tag & Label Manufacturers Institute (TLMI) described the strike shortages as having “crippled a fragile global supply chain [that] supports the North American tag, label, supply chain, and other material input companies.” 

In essence, everyone is desperate for paper supplies now

With lead times hovering around 5 months for overseas shipments, we have to really consider how long it will take for U.S. supplies to arrive.

Take into account the time it takes shipments to: cross the Atlantic, berth at a port, unload supplies, pass through customs, load shipments onto a truck (assuming there are some available), etc.

And all of this barring complications during transit. 

Everything considered, we’re not likely to see supplies arrive until Q4, past the end of summer when the market begins preparing for the busy holiday season. 

Which begs the looming question, where will this leave all of us once the holidays roll around?