The manufacture of paper had been part of Elieser Johansson's plans when the pulp mill was established in the 1880s. The matter was raised in the company auditors' proposal in 1897, and in the following year the building of a groundwood plant and paper mill began on the shore of Patalankoski, at the site of the present Ilveslinna.

The new brick factory building was designed by architect Bernhard Blom and the construction was the responsibility of master builder Suonio and engineer Nordfors. The machines were mostly ordered from Germany, among them the 210 cm wide Golzern paper machine. Wallpaper and natural brown wrapping paper were produced on this machine. It was a difficult beginning but the new factory made its owners 10 % in dividend as early as 1900.

At the turn of the century it was decided to secure the consumption of the in-house mechanical pulp by increasing paper production. A second paper mill was built at Hovilanhaara, on the west side of the pulp mill, in 1902. The mill's two papermaking machines produced newsprint and fine grade paper. Ab Jämsänkoski was now manufacturing both chemical and mechanical pulp-based paper, most of which was exported to Russia. At home, Hufvudstadsbladet and Uusi Suometar, among others, were printed on Jämsänkoski paper.

The First World War caused a decline in paper production, and in 1919 it was decided to limit the manufacturing of paper due to lack of demand. The majority of the company shares were sold to Simpele and Myllykoski mills, and United Paper Mills Ltd was founded in 1920. The new managing director, Rudolf Walden, decided to divide the manufacture of different types of paper between the factories. Jämsänkoski, whose location had difficult transport links, concentrated on the more expensive cellulose-rich printing and writing papers, and Myllykoski, which had the best transport links, would manufacture the heaviest and cheapest products. At Jämsänkoski the manufacture of mechanical pulp-based paper was almost completely finished by the mid-1930s.