Biofore Magazine 2022

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According to Pesonen, the dark state of affairs has not changed UPM’s basic position or market outlook. The company continues to implement its strategy and growth projects with a strong balance sheet.

Is regionalisation underway? Biofore strategy responds to climate change: the company manufac tures products from forest biomass to reduce the use of fossil mate rials and energy. Nowwar, the energy crisis and geopolitical upheav al have overtaken climate change, at least for the moment. According to Pesonen, changes in the economy, energy, food chains and logistics may be long-lasting and will certainly test both society and households. “From UPM’s perspective, however, the underlying situation or market outlook has not changed. The balance sheet is strong, andwe can continue to implement our strategy and growth projects,” says Pesonen. Pesonen has three points to highlight. Firstly, the strong balance sheet; second, the right businessmodel, witha focus on implementing strategic projects and ensuring the health of business performance; and third, as global as UPM is, raw material sourcing, production and customer service are local. Localism is important since globalisation can turn into regionali sation, which can lead to barriers to trade and the flow of goods. “But even in this context, we have the opportunity to be effective. UPM is well positioned and ready to not onlymeet challenges but to also seize opportunities,” says Pesonen. One interestingquestioniswhatchanges thenewgeopolitical setting will bring about inChina andAsia, whichare important forUPM. Peso nen thinks that the comingyearwill showhowChinawill overcome the coronavirus andwhether the countrymay have a newdirection. “The fact has not changed that Asia is a big, growingmarket where

middle-class growth and urbanisation are continuing apace. This basic setting is unchanged.” Leuna chemistry is everywhere On UPM’s global map, Germany is of major importance. Pesonen is often asked how the paper industry will fare there, with gas short- ages expected to cripple industry and the economy this winter. He is concerned but points out that printing papers no longer account for a very large part of the company’s turnover, let alone profit, and that the German mills are not of a single type. “Some mills have a biopower plant and co-generation of heat and electricity for the community. Then there are those who use only natural gas, and there will certainly be challenges.” With some dark clouds hanging over Germany, UPM sees the sun breaking through an opening the size of the Leuna biochemicals refinery. “We are truly the first tomake chemical products from forest bio mass. The situation is also favourable since the raw material that is exploited locally has nothing to dowithRussia,” Pesonen points out. Commercial interest in the biochemicals refinery, which is due to be completed by the end of 2023, is already enormous, although the emission reduction potential of the refinery’s products is not yet fully understood, according to Pesonen. “Leuna chemistry is not just PET bottles or carbon black. Those molecules are everywhere, in every single object in this conference room. We will find the most appropriate end-use segments with the highest market penetration and the right price.”