LAPPEENRANTA, FINLAND — UPM is exploring the redevelopment of a former paper machine hall at its closed Kaukas paper mill into a data centre, reflecting a growing trend of repurposing legacy industrial sites for digital infrastructure.

The company confirmed it is in discussions with several international data centre operators regarding a potential investment at the site, although no agreement has yet been finalized.

The initiative follows UPM’s decision to cease paper production at the Kaukas mill in 2025, leaving the large production facility available for redevelopment.

Industrial Site Offers Development Advantages

According to UPM, one of the project’s main advantages is that the former mill is already located within an established industrial zone.

Existing industrial zoning is expected to simplify permitting procedures and shorten the development timeline compared with building a new facility on undeveloped land.

The City of Lappeenranta has confirmed that converting the former paper machine hall into a data centre will require a building permit. Local authorities have already held preliminary discussions with UPM as planning progresses.

The company has not provided a timetable for selecting a data centre operator or completing an agreement.

Former Paper Mills Find New Industrial Uses

The Kaukas proposal is not UPM’s first effort to repurpose former paper manufacturing assets.

At the company’s former Myllykoski paper mill in Kouvola, Icelandic data centre developer atNorth is planning multiple large-scale data centre facilities, demonstrating how former paper industry sites can be adapted for digital infrastructure.

Former pulp and paper mills often provide advantages for data centre projects because they already offer:

• Large industrial buildings
• Established utility infrastructure
• High-capacity electricity connections
• Industrial zoning suitable for redevelopment

These characteristics can reduce development costs and accelerate project implementation.

Nordic Region Attracts Data Centre Investment

Demand for Nordic data centre locations has continued to grow as technology companies seek sites with reliable infrastructure and lower operating costs.

The region offers several advantages for data centre operators, including:

• Access to low-carbon electricity
• Stable power grids
• Cool climate that reduces cooling energy requirements

These factors have contributed to increasing investment in high-performance computing, cloud infrastructure and artificial intelligence facilities across Northern Europe.

Diversifying Former Industrial Assets

The proposed redevelopment highlights a broader shift in the forest products sector, where former paper manufacturing sites are increasingly being converted to support new industries after paper machine closures.

For companies such as UPM, repurposing existing industrial properties may provide an opportunity to generate new long-term value from legacy manufacturing assets while supporting regional economic development.

Last Updated on 23/07/2026 by Jota Machinery