Biofore Magazine 2022

FEATURE

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Proud of paper Pesonen says he is very satisfied with the company’s business portfolio, which combines growing businesses, bio-based new businesses, and mature paper business. The portfolio has proved its worth, but its existence is not a given. “When I started in 2004, the mindset was to be global, focus on one, sell others and put the balance sheet to efficient use. Everything from labels, energy, pulp and plywood was called into question. I don’t know why I thought differently at the time, but that’s just the way I thought,” Pesonen recalls. He also remembers thinking that there are two criteria for a busi ness to be suitable for UPM: the rawmaterial is forest biomass, but the business must also earn its position as one of the best in its sector. “At Raflatac, we have proven that we can grow and be competitive. Growth has been close to 5% per year, and margins have doubled. The same applies to Pulp for example, where we quickly became one of the world leaders.” The transformation from a paper company to today’s UPM has taken 20 years and has not only required adaptation to the declining demand for printing papers, but also the ability to innovate ground-breaking products such as biochemical and bio medical products. One thing Pesonen never forgets to mention when talking about the transformation of the company is that UPM is the only company where paper still plays a strong role. “The paper business provides free cash flow for growth and innovationandkeeps the balance sheet ingood shape. I’mreallyproud of paper.” A clear path to the hydrogen economy The Leuna biochemicals refinery is a major step towards replacing fossil materials in many consumer products. UPM produces carbon dioxide-free energy from nuclear power and hydropower, which Pesonen expects to deliver stable results. A little further into the future, he sees opportunities in combining carbon-free electricity and bio-based coal from factories into new products. “The commercial potential of the hydrogen economy will start to show in the coming years. UPMhas a very good path to the hydrogen economy,” says Pesonen. The energy crisis took the climate change debate back to the basics. Climate policy was challenged, which, according to Pesonen, focuses too much about carbon sinks and offsets and too little about replacing fossil rawmaterials and fuels. and innovation and keeps the balance sheet in good shape. I’m really proud of paper.” “The paper business provides free cash flow for growth

“Offsetting will not solve the problem. The solution lies in devel oping products to replace fossil materials, and it will not happen immediately. This should be at the heart of the debate.” UPM is a major player in energy security in Finland, where the company is not only a major energy consumer but also a major energy producer and a key supplier of balancing energy and the In addition to a clear strategy, a vigorous operating model, a strong balance sheet and a focus on competitiveness, Pesonen sees a special asset in the company. “The company has a culture of continuous improvement. You could say that enthusiasmand curiosity for the future are in the DNA of the company.” This culture is fuelled by the fact that UPM employees feel they are doing meaningful work in a company that has a big role to play in mitigating climate change. Another important issue is the overall responsibility given to businesses, from rawmaterials to customers. “The role of our employees is really important. The right people in the right places, working together, bring along success and results. And leaders must have the strength to deliver. You have to be able to go against the trends sometimes and trust your vision,” says Pe sonen. This is what happened when the Finnish Paperworkers’ Union went on strike in Finland last spring. The motives of UPM’s manage ment were questioned in the public debate, sometimes very sharply. “Our clear objective was that collective agreements would be agreed at UPMon a business-specific basis so that we could compete as well as possible in the international arena. This goal was achieved, and the new business-specific agreements brought changes that are necessary for future success in Finland,” says Pesonen. “Management and personnel now have the opportunity to work together to ensure that the manufacturing unit is competitive when products face competition in the global marketplace. That’s what it’s all about.” security of electricity supply in Finland. Culture of continuous improvement

JUSSI PESONEN Jussi Pesonen , who has worked as President and CEO since 2004, will retire during 2024. He has served UPM in several management positions since 1987. Jussi Pesonen was born in 1960 and holds a master’s degree in process technology.