Finnish forest industry group UPM and Russian Sveza Group have signed a letter  
of intent to form a joint venture company, and to make a final investment       
decision after finalising the feasibility study on a state-of-the-art forest    
industry facility in the Vologda region of Northwest Russia. Each party would   
hold 50 percent of the joint venture's share capital.                           

The planned industrial complex includes a modern pulp mill, a sawmill and an OSB
building panels mill in the community of Sheksna, in the southern part of       
Vologda. The planned capacity of the pulp mill would be 800,000 metric tonnes,  
the sawmill 300,000 cubic meters and the OSB mill 450,000 cubic meters.         

"This wide-scale project is really a national one and has a tremendous impact on
the development of the Russian economy as a whole and the Vologda region in     
particular. It will help to utilise the Russian forest resources more           
efficiently based on the latest technology," claimed Alexey Mordashov, the owner
of Sveza. "When implementing the project we are planning to use the economic    
development institutions, e.g. Vnesheconom bank and the Investment Fund. As the 
investors of the project we, together with UPM, are expecting to get support    
from the state", continued Mordashov.                                           

"Russia plays an important part in UPM's global growth strategy. Since 2004, UPM
has actively investigated new openings in Russia," says UPM's President and CEO 
Jussi Pesonen. "This project provides us with an exciting opportunity to expand 
our existing Russian operations further. UPM has the competencies and skills to 
construct world-class mills using the latest technology and environmental       

The total investment in the facilities would exceed EUR 1.0 billion. When fully 
operational, the new Sheksna mills would employ approximately 650 persons, while
the indirect employment benefit in the region would total thousands of jobs.    

Sheksna is located in the southern part of Vologda, a region of abundant forest 
resources. The Vologda forests have a growing stock of close to one billion     
cubic meters of sustainable capacity. Sheksna enjoys good logistics, with access
to the Volga-Baltic waterway and the northern railroad extending from           
St.Petersburg to Perm. The products of the Sheksna mills would be mainly        
intended for domestic Russian markets.                                          

SVEZA IN BRIEF                                                                  
Sveza Group is a business controlled by Aleksei Mordashov as a personal         
investment, fully independent of steel and other businesses. Sveza is one of the
leading forestry companies in Russia. It includes five manufacturing sites:     
Ust-Izhora plywood mill, Kostroma plywood mill “Fanplit”, Velikiy Ustyug plywood
mill “Novator”, Perm plywood mill and Manturovo plywood mill “Fankom”.                                                                     

UPM IN BRIEF                                                                    
UPM is one of the world's leading forest products groups. The Group's sales in  
2006 were EUR 10 billion. It has about 28,000 employees. UPM's main products    
include printing papers, label materials and wood products. The company has     
production units in 14 countries and its main market areas are Europe and North 
America. UPM's shares are listed on the OMX Nordic Exchange Helsinki. The       
company's shares are also traded under an ADR programme on the OTC market in the
United States.                                             

The press-conference will take place in the RIA Novosti press-center, hall 3,   
Zubovski boulevard, 4, Moscow, on December, 19, 2007 at 10.30 am. The press     
conference will be hosted by:                                                   

Jussi Pesonen, President and CEO, UPM                                           
Alexey Mordashov, Chairman of the Board, Sveza                                  
Heikki Malinen, Executive Vice President, Strategy, UPM                         
Andrey Kashubski, Managing Director, Sveza                                      
Vyacheslav Pozgalyov, The Governor of the Vologda Region                        

For further information please contact:                                         
Heikki Malinen, Executive Vice President, Strategy, UPM, tel. +358 204150110    
Andrey Kashubski, Managing Director, Sveza, tel. +7 495 783 0035                

UPM-Kymmene Corporation                                                         

Pirkko Harrela                                                                  
Executive Vice President, Corporate Communications                              

OMX Nordic Exchange Helsinki                                                    
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