UPM Expands North America Label Material Production Capacity with New Technology Investment

UPM Adhesive Materials plans to boost its label material production capacity in North America by investing in its Mills River, North Carolina facility. The company will install new proprietary coating technology, significantly increasing its capacity for advanced label materials. This investment aims to strengthen UPM's position in a growing market segment, including applications in wine and spirits, industrial, pharmaceutical, and postal sectors.

UPM Adhesive Materials, formerly known as UPM Raflatac, has announced plans to significantly increase its production capacity for advanced label materials in North America. The company will invest in its Mills River, North Carolina facility to install new proprietary coating technology. This move aims to strengthen UPM's position in the growing market segment, particularly in applications for wine and spirits, industrial, pharmaceutical, and postal sectors.

The investment is part of UPM's broader strategy to expand its advanced label materials production capacity in the United States. The new technology will enable the company to capture new business opportunities and increase its share in this high-growth market. According to Brinder Gill, Senior Vice President, Americas, UPM Adhesive Materials, the investment will bring advanced label production closer to UPM's customers in the Americas, allowing the company to service them more effectively [2].

The Mills River factory has been producing pressure-sensitive label materials under the Raflatac brand for over 25 years. With the new investment, the facility will continue to provide high-quality paper and film label materials, in addition to advanced label materials. This expansion aligns with UPM's commitment to sustainability and innovation, as it aims to meet the increasing demand for eco-friendly and high-performance label solutions.

The U.S. market represents a significant portion of UPM's global sales, and the expansion in Mills River is expected to drive further growth. According to the company's financial reports, UPM Adhesive Materials reported €1.6 billion in sales in 2024, with a 12% year-over-year increase in EBITDA. The focus on advanced label materials, which accounts for 30% of its revenue, is expected to continue driving growth [1].

UPM's sustainability credentials are a key competitive advantage. The company's Carbon Action plastic films portfolio, launched in 2024, is designed to be fully recyclable and compatible with existing waste streams. This innovation aligns with the growing demand for sustainable materials in various industries, including healthcare, where reducing carbon footprints is a regulatory and reputational imperative.

The healthcare sector, in particular, is expected to be a high-growth frontier for UPM. The company's existing product suite is tailor-made for this industry, with label materials used for pharmaceutical packaging, medical device labeling, and patient information tags. The U.S. healthcare market is projected to grow at 6.2% annually, positioning UPM to capture a significant share [1].

UPM's recent focus on biobased materials and carbon-neutral production processes also aligns with the sector's push for greener supply chains. The company's UPM RafCycle™ recycling service, which received DEKRA certification in 2024, further strengthens its appeal to healthcare providers seeking to reduce waste.

The logistics and e-commerce sectors are another significant growth engine for UPM. The company's liner-free label papers, which eliminate the need for non-recyclable backing materials, are a direct response to the demand for cost-effective, scalable, and sustainable labels. As e-commerce giants like Amazon (AMZN) and Walmart (WMT) ramp up their sustainability commitments, UPM's proximity to U.S. customers and its ability to deliver high-performance, eco-friendly materials will be a major differentiator.

In conclusion, UPM Adhesive Materials' expansion into Mills River is a strategic move that positions the company to capitalize on the growing demand for advanced label materials in North America. With a focus on sustainability, innovation, and customer service, UPM is well-positioned to lead the industry in the years to come.

References:
[1] https://www.ainvest.com/news/upm-kymmene-strategic-expansion-market-goldmine-sustainable-labeling-2507/
[2] https://www.tradingview.com/news/reuters.com,2025-07-24:newsml_Wkr9vzTfg:0-upm-adhesive-materials-plans-to-expand-production-capacity-in-advanced-label-materials-in-north-america/