Pulp Matters 2/2022

UPM PULP MAGAZINE 2/2022 FIBRES FOR THE FUTURE PULP MATTERS

FIBRE PHENOMENA P. 6 EASTERN OPPORTUNITIES

BUSINESS BLUEPRINT P. 18 CREATING REGIONAL VALUE GOING LOCAL P. 28 NEW NURSERY & PULP TERMINAL

CUTTING EDGE P. 20

TOP-CLASS TECH SUPPORT NEWS P. 30 INCREASING BIODIVERSITY

PULP FACT P. 22 THE EUCA ENGINE

PULP MATTERS

CHINA IS ONE OF THE TOP PULP CONSUMERS IN THE WORLD, AND THE BIGGEST SINGLE DESTINATION COUNTRY OF UPM PULP.

CONTENT 2/2022

4–5 EDITORIAL INDIVIDUALS MATTER 6–17 FIBRE PHENOMENA THE CHINESE CONNECTION 18–19 BUSINESS BLUEPRINT MAKING AN IMPACT 20–21 CUTTING EDGE TEAMWORK ENSURES QUALITY SERVICE 22–27 PULP FACT INVESTING IN THE FUTURE 28–29 GOING LOCAL FROM SEEDLING TO SHIPMENT 30–31 NEWS NEW DEADWOOD TARGET, RECORD ECOVADIS RATING AND MORE

HIGHLIGHTS

20 FINDING THE PERFECT FIT UPM’s technical support helps customers get the most out of pulp.

22 COUNTDOWN TO START-UP

Before the UPM Paso de los Toros mill starts up in the first quarter of 2023, each of its process areas have undergone a thorough testing phase.

PULP MATTERS ISSUE 2/2022 Alvar Aallon katu 1, PL 380, FI-00101 Helsinki

Cover: Connie Bi, Sales Director, UPM Pulp, APAC. Photo by Tuomas Harjumaaskola. Production and layout: Vapa Media Printing house: Grano PULP MATTERS is published in English and Chinese.

www.upmpulp.com Publisher: UPM Pulp

PEFC/02-31-80

Promoting Sustainable Forest

Editor-in-chief: Sari Hörkkö Editorial board: Sari Hörkkö, Fang Deng and Joy Li

Management www.pefc.org

Cover: UPM Fine 170 g Paper: UPM Fine 120 g

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EDI TORIAL

Individuals matter

“IT HAS BEEN FANTASTIC TO EXCHANGE IDEAS AND EXPERIENCES WITH CUSTOMERS AROUND A SHARED TABLE AGAIN.”

In a business based on trust, it’s the people that make a difference.

Dear Reader, The theme of this issue of Pulp Matters magazine is “Individuals matter” – referring both to the individuals ready to deliver the perfect product fit to customers, and all those affected by our operations. In this issue, we cover these topics by highlighting our technical customer service and presenting the multiple impacts of our entire forestry value chain in Uruguay, including our new nursery and deep sea pulp terminal. Even though pulp can be seen as a commodity, one of the key attributes we have built around it is our team of truly dedicated people that run the business. The key to creating long lasting customer relationships is trust, and I would dare to say that during the past decade or so we have succeeded reasonably well in creating trustworthy relationships. In this sense we experienced a setback early this year with the long strike at our pulp mills in Finland and have since then focused on rebuilding trust and regaining our position with our customers. Part of the process of rebuilding trust has been the opportunity to get together and meet up again face-to-face with customers after the pandemic. It has been fantastic to be able to exchange ideas and experiences around a shared table, instead of just logging into an online meeting. One of the events making a welcome return to the live format is London Pulp Week in November, coinciding with the publication of this issue. Our greenfield pulp mill project in Paso de los Toros has been a massive undertaking and the first project of this scale for UPM Pulp, spanning all areas of the organisation. This type of investment requires a very long planning period and is also a huge logistical operation. Locally, the mill itself will have the biggest impact on life in the community of Paso de los Toros, but also the new railroad connection from the mill to the port of Montevideo is expected to have a positive effect on the entire region of Central Uruguay. On a global level the new mill will provide a significant capacity increase of eucalyptus pulp to the market. Besides servicing our current focus markets of Asia and Europe, it will enable us to enter the North American market. Our sincere ambition and intention is to become a solid and reliable supplier of eucalyptus pulp, backed by the supply security of our two mills and our comprehensive logistics network.

Tomas Wiklund Senior Vice President, Pulp Sales UPM Pulp tomas.wiklund@upm.com

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F IBRE PHENOMENA

THE CHINESE CONNECTION

China needs pulp – and the global pulp industry needs China – but can the country sustain the fierce growth of the past two decades?

TEXT: SAMI ANTEROINEN PHOTOS: UPM, TUOMAS HARJUMAASKOLA

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F IBRE PHENOMENA

Urbanisation and rising incomes have been driving tissue papers and other key segments in China already for several years.

C hina is the top pulp consuming country metric tonnes in 2021. However, unlike other major markets such as the US and Europe, China has a high import dependency on wood pulp due to the scarcity and uneven distribution of domestic forest resources. Ricky Wang , Pulp and Paper Analyst for analytics agency Sublime China Information (SCI), notes that China’s import dependence degree has been declining from 67% in 2017 to 57% in 2021 with local pulp and paper integration progress, uncertainties in 2020, unexpected overseas turnarounds and high-cost pressure from imported wood pulp. “In addition, compared with more mature markets, the degree of integration and concentration in China’s pulp and paper industry is comparatively low,” he says, adding that the capacity concentration ratio of the top four players in the Chinese tissue industry is only about 33% in 2022. “China’s paper players differ in terms of scale and capital strength, and their purchasing channels and strategies also vary,” Wang says. The vast majority of integration concerns mechanical pulp produced for packaging and somewhat also fine paper production, but only a few tissue mills have onsite BHK (Bleached Hardwood Kraft) pulp integration. A ccording to Wang, there has been higher health and hygiene consciousness among consumers in China due to the ongoing COVID pandemic – meaning, in essence, that product traits such as clean, safe and food grade become more appealing to consumers. in the world, with total wood pulp consumption reaching 46 million

Tom Wright, Managing Director, Hawkings Wright

Ricky Wang, Pulp and Paper Analyst, SCI

In addition to conventional products such as toilet paper, facial tissue and paper towels, tissue players in China have launched differentiated products such as wet toilet paper, lotion tissue, disinfecting wipes, and moisturising facial tissue to serve specialised demand under more specific consumption scenarios. “The overall demand for tissue will continue to rise with urbanisation and higher disposable income,” Wang says, while pointing out that factors such as demand differentiation and economic deceleration will cause a divergence in tissue mills’ business strategies.

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F IBRE PHENOMENA

THE OVERALL DEMAND FOR TISSUE WILL CONTINUE TO RISE.

A ccording to Wang the global Bleached Hardwood Kraft (BHK) pulp supply is expected to increase constantly in the future with new capacity coming online: most notably, UPM’s 2.1-million tonne eucalyptus pulp mill in Paso de los Toros, Uruguay, which is scheduled to start production by the end of the first quarter of 2023. “China’s pulp import will most likely recover in 2023. Also, the import structure may continue to readjust with a higher BHK proportion.” In contrast to BHK, Bleach Softwood Kraft (BSK) pulp producers usually lack cost advantages in terms of labour, energy and fibre. With constant BHK capacity expansion, a certain price spread between the two will continue, observes Wang. “Thus, paper mills in China may continue to adjust their feedstock structure by raising the BHK content. Aside from higher BHK consumption, more non-wood fibre has been consumed as an alternative to the expensive wood pulp in 2022.” Dealing with continuous industry concentration in China, the competition between industry giants may well escalate – and the role of importers and futures spot traders may diversify. M anaging Director Tom Wright from consultancy Hawkins Wright notes that during the past 20 years China has seen extraordinary and unnaturally fast growth. The next 20 years, however, can be something very different – also from a pulp perspective. “Still, looking at the global market, we can see that we need China to perform well, since it’s so central to the entire market.”

The rising middle class of China has been a big driver in keeping the growth going, by increasing the use of hygiene products. Similarly, urbanisation is remodelling Chinese consumer behaviour in the same way. “Now, about 65% of the Chinese live in cities, compared to only 26% 30 years ago,” Wright notes, adding that there are currently 14 “megacities” in the country. Still, with a range of problems in the national construction and property market, this fierce urbanisation is expected to witness a hiccup or two. “The rate of urbanisation will slow down as a period of slower growth sets in,” believes Wright.

46 million metric tons of wood pulp consumed in China in 2021

57% import dependency of pulp in China in 2021

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F IBRE PHENOMENA

THE RISING MIDDLE CLASS OF CHINA HAS BEEN A BIG DRIVER IN KEEPING THE GROWTH GOING, BY INCREASING THE USE OF HYGIENE PRODUCTS.

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F IBRE PHENOMENA

ABOUT 65% OF CHINESE PEOPLE LIVE IN CITIES, COMPARED TO ONLY 26% 30 YEARS AGO.

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F IBRE PHENOMENA

During the past 20 years, China has seen extraordinary and unnaturally fast growth.

Chinese consumers are increasingly interested in the issues of high quality and sustainability.

PLASTIC BEING PHASED OUT IMPROVES THE MARKET CHANCES OF SUSTAINABLE AND RENEWABLE PULP.

A s the market for tissue, for example, has matured, the attention of Chinese consumers has turned to such issues as high quality and sustainability. “We see that the same drivers that are potent in the West are gaining ground in China, too.” However, the headwinds of the Chinese economy have an impact here, as well. “Consumerism will slow down to some degree.” Nevertheless, Wright sees some exciting opportunities out there. China is a forerunner in the fight against plastic waste, with a plan in place to phase out manufacturing and circulation of single-use plastics. “China has shown they can adopt innovative, flexible policies.” As the globally biggest single market for pulp China is very important also for UPM Pulp. UPM has strong experience and knowledge of the Chinese market – in fact, the local APAC (Asia-Pacific) sales and service team has enjoyed a great 11-year run in China. Right now, the APAC team features 18 professionals. Senior Sales Manager Rachel Sun says that the growth of the Chinese middle class is certainly having an impact on the market. “With UPM you have a product that is sustainable and safe, with great quality – and this is something that the customers really respond to,” she says.

According to Sun, the APAC office is committed to supply chain security and always making the delivery window. “We see the customer as our partner and believe that we can grow together, as we have done in the past. We also want to pursue transparency in our actions at all times.” Whenever problems arise, this mindset of openness and doing things together helps to solve them. “We take challenges head on and overcome them,” she says. With the new Paso de los Toros mill soon delivering “a wave of pulp” to China, this will certainly impact various things. “This new volume will ease pressure on demand and supply, and we can serve more Chinese customers.” Sun believes that the competitiveness of UPM Pulp will increase with growing volumes, but also due to sustainability issues. “Our customers want to be more sustainable throughout their value chain, and with the new capacity we’re in a great position to support them.” Connie Bi , Sales Director for APAC, says that with the pulp volumes growing, UPM will take a more important role in the pulp market – and contribute to the healthy development of the local paper industry. “Our responsibility to the customer means supporting them with great quality and service,” Bi says, adding that APAC has a strong reputation as a promise-keeper in the market.

Rachel Sun, Senior Sales Manager, UPM Pulp, APAC

Connie Bi, Sales Director, UPM Pulp, APAC

being phased out, this is certainly improving the market chances of our pulp, which is a sustainable product made out of renewable sources.” Yet, uncertainties remain in the market, as both Rachel Sun and Connie Bi point out. The UPM APAC, however, has a very straightforward playbook for the coming years. “We want to keep doing great business – as well as be agile in our sales operations and emphasise customer focus at all times. That’s the best certainty one can have in uncertain times,” says Bi.

As the Paso de los Toros mill is set to take pulp volumes to the next level, Bi talks about a positive challenge facing the APAC sales team. “We’re excited about the opportunity to get a lot stronger as the pulp volumes grow,” she says, adding that the team has acquired three new members recently. B i also notes the anti-plastic stance of the Chinese government that is promoting the use of fibre based alternatives in a big way. “With plastic

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BUSINESS BLUEPRINT

LAND USE PLANNING • Demarcation of plantable areas • Road layout • Conservation areas

MAKING AN IMPACT

SILVICULTURE • Over 30k ha planted annually • Mechanisation • Cost efficiency

ROAD CONSTRUCTION • UPM builds 900 km of roads a year after Paso de los Toros mill is operational

OVER 160 MW renewable electricity to national grid.

UPM’s entire forestry value chain in Uruguay has various positive effects on the local economy and regional development.

7,000 DIRECT JOBS from UPM and contractors. 10,000 induced jobs throughout the value chain when Paso de los Toros mill is operating.

USD 380 MILLION in taxes and social security

payments per year.

NURSERIES • 3 Nurseries

(high-tech design)

UPM Paso de los Toros pulp mill

• >40 million

USD 1.9 BILLION in pulp exports per year.

seedlings per year from seeds and through vegetative propagation

UPM Fray Bentos pulp mill

USD 290 MILLION net salaries per year.

HARVESTING • 100% mechanised • ~11Mm 3 /year after Paso de los Toros mill is operational

FORESTRY VALUE CHAIN

600 SMALL AND MEDIUM size local companies.

NUEVA PALMIRA PORT

GLOBAL MARKETS • Fray Bentos pulp mill, 1.3 MT a year • Paso de los Toros pulp mill, 2.1 MT a year

R&D – TREE BREEDING PROGRAMME • 80% increase in forest productivity (pulp/ha/year) in 25 years

TRANSPORT • Altogether 800 wood trucks enter the pulp mills each day • Whole fleet monitored by GPS optimising planning and safety

2% INCREASE IN GDP after Paso de los Toros mill is operational.

MONTEVIDEO

URUGUAY • 3.4 million people

UPM FRAY BENTOS PULP MILL • 1.3 million tonnes/year of eucalyptus pulp • 800+ people working on the mill site daily • 8% share of energy generation in Uruguay

UPM PASO DE LOS TOROS PULP MILL

UPM FOUNDATION

• Presence in

150 rural communities • More than 30 projects per year in cooperation with organisations and institutes • 80% of the projects are focused on education

• Scheduled to start up by the end of Q1 of 2023 • USD 3.47 billion total investment includes pulp mill, pulp terminal in Montevideo and investments in local community • Annual production capacity 2.1 million tonnes of eucalyptus pulp

• 1.3 million in Montevideo • The 2nd smallest nation

in South America (176,000 km²) • One of the most socially advanced countries in Latin America with a well organised social system

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CUT T ING EDGE

TEAMWORK ENSURES QUALITY SERVICE

Maria Jose Aguerrebere, Technical Customer Service Manager, Americas

Technical Customer Service Manager Wenxia Xu and Market Intelligence Analyst Leon Yang from the UPM Pulp APAC team review pulp samples.

”WE HAVE AN EVER-DEEPENING UNDERSTANDING OF THE VARIOUS END USES AND HOWOUR CUSTOMERS DO BUSINESS.”

The UPM technical customer service offers customers individual advice to help them optimise their processes. From analysing pulp samples with the support of research centres to adjusting machinery, their expertise is wide.

TEXT: ANNA GUSTAFSSON PHOTOS: UPM

María José Aguerrebere could be called a UPM veteran, as she has already worked for the company for 18 years. After finishing her chemical engineering degree – specialising in the pulp and paper industry – she joined the company before the Fray Bentos mill was constructed. Most recently Aguerrebere has been appointed technical customer service manager for the Americas markets. She advises and consults customers on matters such as finding the best pulp mix and process adjustments to meet the required use and optimising cost and performance. “The North and South American markets differ from the more traditional markets for UPM, such as Asia or Europe. It is still a relatively new market for UPM, which means working more closely with customers to explain the quality and properties of our pulps,” Aguerrebere says. Customers in the Americas have appreciated the comprehensive portfolio of fibres that UPM offers, “the best of North and South” as Aguerrebere describes them. Another advantage has been UPM’s research and development

“During the past decade, we have gained an ever deepening understanding of the various end uses and how our customers do business,” she says. All customers have different needs, so cooperation with technical support helps them get the most out of the product, Xu explains. Assistance in troubleshooting with customers is provided by the UPM research and development centre, located in Changshu, some 100 kilometres from Shanghai. Recently, customers have also been interested in learning about UPM’s experiences with sustainability topics and environmental performance, as China is setting stricter energy consumption and emissions policies, she notes. STEADY QUALITY The UPM Paso de los Toros pulp mill is currently in a commissioning phase, where pulp production equipment is being tested before production begins. The project has been followed with excitement by the Shanghai technical customer service team. With the opening of the Paso de los Toros mill,

pulp production in Uruguay is set to more than double from the current 1.3 million tonnes that the UPM Fray Bentos mill produces annually. “Since 2020, our focus has been preparing for the new volume coming to the Asia Pacific market. We have met with customers, held seminars, and presented different aspects and abilities of our pulp,” Xu explains. One of the questions that is of interest to technical customer service professionals is the steady quality of pulp. Although two separate mills will produce pulp in the future, the consistency will be ensured by identical production processes. Even though the technical customer service professionals are located geographically far from each other, there is a strong sense of team effort in how they describe their work. The network is solid. “The cooperation inside UPM is excellent. We can share information and learn from each other – from technical representatives at each mill to research centres and sales,” Xu sums up.

centres, one of them at the Fray Bentos mill. Pulp samples from customers can be taken to the centre for analysis. “We can show how our pulp performs compared to the pulp that customers may currently be using. We can assist in every step of the process, from adjusting the furnish composition and refining parameters to optimising operations,” says Aguerrebere. A LEARNING EXPERIENCE Twenty thousand kilometres from Montevideo, Aguerrebere’s colleague is busy at work in Shanghai, China. Wenxia Xu has been in the position of technical customer service manager for the Asia and Pacific area for 10 years, having previously worked at the UPM research centre in China. The core of her work is advising and assisting customers with buying the pulp to produce their products. Technical customer service experts can also help customers with test runs and offer benchmark simulations for different process conditions. Asia is an important market for UPM pulp and being close to customers geographically is a big advantage, Xu says.

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PULP FAC T

INVESTING IN THE FUTURE

UPM’s new pulp mill near Paso de los Toros will raise the company’s position among the world’s leading eucalyptus market pulp producers. Prior to the start-up of pulp production in the first quarter of 2023, each of the mill’s process areas has undergone a thorough testing phase.

TEXT: DANIEL DAWSON PHOTOS: UPM

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PULP FAC T

Located amid the rolling hills of Centenario, on the southern banks of the Río Negro in central Uruguay, is the site of UPM’s second pulp mill in the country. When the first woodchips are fed into its digester, it will bring to fruition a project that has been in the works since 2016 and set in motion the production of 2.1 million tonnes of bleached eucalyptus kraf t pulp a year. “It will be one of the largest, most competitive and most sustainable pulp mills in the world,” begins Bernd Eikens , Executive Vice President of UPM Fibres. He believes there is plenty of potential for pulp – and its by-products – as the global community works to reduce its dependence on fossil fuels and plastics. Meeting this rising demand sustainably is one of the pulp and paper industry’s most significant challenges, but Eikens believes the new mill is up to the task. “Pulp is at the core of the bioeconomy and the purpose for the company as a whole is to replace fossil fuel-based products with bioproducts.”

This purpose includes manufacturing pulp-based packaging materials to replace plastic and developing uses for pulp by-products such as lignin and tall oil. “We have a dedicated R&D team focusing on the potential of biomass,” notes Eikens. “Beyond the classical products of timber, paper and pulp, there is more going on to figure out what type of carbon products can be utilised in which way.” DRIVINGUPM’S LONG TERM SUSTAINABLE OUTLOOK Part of what drives the forward looking perspective of UPM is the considerable time and planning it takes to successfully develop and run a pulp mill. “It’s a huge logistical operation,” emphasises Marcos Battegazzore , Vice President of UPM Uruguay Pulp and Forestry Operations. UPM’s second pulp mill in Uruguay will consume about 7.5 million cubic metres of eucalyptus. Considering that it takes these seedlings 10 years to reach maturity, any planned expansion must begin well in advance.

The mill’s secure wood supply is grown with support from the local population.

“This type of investment requires a very long planning period and starts from the development of the plantation base,” explains Battegazzore. “You need to have a secure wood supply before investing in a mill.” To develop sustainably, Bernd Eikens states that this supply must be grown with support from the local population and not at the expense of food based agricultural activities. “To be sustainable, you must have good manufacturing logistics, efficiency and a good philosophy at each stage of the production process. This ensures having a clear conscience when producing fibres in Uruguay.” PREPARING FOR DAY ONE OF OPERATIONS After securing the future wood supply, construction on the new pulp mill began in 2019. When we spoke to Battegazzore, the project team were in the middle of the commissioning process, which is the final step before mill operations begin and all the process parts are tested and connected.

2.1 Mt 7.5 Mm 3 of bleached eucalyptus kraft pulp to be produced annually at the Paso de los Toros mill of eucalyptus consumed a year

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PULP FAC T

“THIS TYPE OF INVESTMENT REQUIRES A VERY LONG PLANNING PERIOD AND STARTS FROM THE DEVELOPMENT OF THE PLANTATION BASE.”

“The mill contains many different departments and process areas that are interconnected but have a specific function within the whole mill,” he adds. The first step is to test the water pumps, which transport this essential component around the mill’s treatment plant, where it can be demineralised and treated for various uses from drinking to firefighting. “Once we have demineralised water, we can trial the boilers,” continues Battegazzore. The commissioning team will test the small boilers before moving on to ensure the larger units function properly. After they have steam, they can begin trialling some of the other departments. “This is how it builds up to the point of the start-up. Once we arrive at this point, a large part of the mill has been in operation and has been basically test run,” he says. Along with testing the equipment, the commissioning process enables all the engineers, technicians and support staff required to keep a mill functioning the chance to train and learn all the procedures. By the time the UPM Paso de los Toros pulp mill officially begins production in the first quarter of 2023, the mill will essentially have been thoroughly tested in each of the process areas, guaranteeing excellent performance in terms of

safety, environment and production. This ensures a seamless transition and means it could be operating at full capacity already in its first year.

UPM PASO DE LOS TOROS IN POSITION FOR FUTURE PULP DEMAND

For Battegazzore, who also participated in commissioning UPM’s first Uruguayan pulp mill in the southwestern coastal city of Fray Bentos, the new UPM Paso de los Toros mill will go a long way to help the company meet future demand. “Global trends are very supportive of rising pulp demand in general – urbanisation, population growth and the trend for utilising more natural fibres instead of synthetic fibres,” he observes. Once the mill is fully operational, Uruguay will be the world’s fifth-largest exporter of pulp. However, UPM’s investment has also been designed to resist all types of market shocks. As a result, Battegazzore is confident that it will remain competitive in the long term, regardless of demand. “Production will be competitive through any price cycle, which is normally seen in the pulp industry, as in other commodities, and that is one of the main considerations when making a 50-year investment,” he concludes.

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GOING LOCAL

Inaugurated this October, UPM’s new pulp terminal in Montevideo will have a direct rail connection to the Paso de los Toros mill. DEEP SEA PULP TERMINAL IN MONTEVIDEO

FROM SEEDLING TO SHIPMENT

UPM’s new tree nursery occupies a 100-hectare area, of which 18 hectares are dedicated to production. NURSERY IN SARANDÍ DEL YÍ

The terminal has an annual operating capacity of over 2 million tonnes of pulp and approximately 100 ships per year.

USD 280 million investment

Women make up around 60% of the nursery’s workforce, as is the case at the two existing UPM nurseries in western Uruguay.

The terminal will employ approximately 100 people, with another 200 working in the loading and unloading of cargo ships.

10 million seedlings per year

A eucalyptus seedling takes approximately 10 years to reach harvest size.

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NEWS

New social responsibility targets lead to record EcoVadis rating EcoVadis has awarded UPM the Platinum level rating based on the company’s sustainability performance in four categories: Environment, Labour and Human Rights, Ethics and Sustainable Procurement. Only 1% of the 90,000 global companies assessed received the Platinum score. Compared to previous years’ assessments, UPM received an all-time high score of 87/100. “The main improvement steps were taken in the Labour and Human Rights category. We have introduced several new social responsibility targets for 2030, focusing strongly on diversity and inclusion and fair rewarding. We have also developed our human rights due diligence processes and reporting,” says Sami Lundgren , VP, Responsibility at UPM. “The EcoVadis sustainability rating helps our customers assess the responsibility of their suppliers. UPM’s renewed Platinum rating recognises the work we have done to promote sustainability in the whole value chain,” Lundgren adds. EcoVadis assesses the performance of globally operating companies in more than 200 purchasing categories and in more than 160 countries. The rating is based on a comprehensive assessment of the companies’ sustainability operations, including verified, public information about supply chain practices. EcoVadis also carries out a 360° screening of

UPM and Dongsung Chemical to develop products from bio-based rawmaterials UPM and South Korean Dongsung Chemical will form a strategic partnership to develop renewable products using bio-based raw materials, initially for footwear materials. The aim is to develop a renewable polyurethane product based on UPM Biochemicals’ biobased mono-ethylene glycols (MEG) – UPM BioPura™ – produced in the world’s first industry scale biorefinery at Leuna in Saxony-Anhalt, Germany. Through this partnership, the two companies will actively cooperate in the development of eco-friendly products using Bio-MEG, targeting the Asian market and its vast textile and footwear industries. Dongsung Chemical plans to diversify its portfolio by advancing eco-friendly product lines, integrating UPM’s Bio-MEG into its production. The aim is to apply it first to footwear materials and then expand the field of application to automotive interior materials and adhesives.

Deadwood doubled to increase biodiversity in UPM’s forests in Finland

UPM has set a target to increase the amount of deadwood in its commercial forests from the current level of about 5 cubic metres per hectare to 10 cubic metres per hectare. In UPM’s protected areas and commercial forests where a specific nature management target has been set, the deadwood target is 20 cubic metres per hectare. The new targets are part of the UPM Forest Action responsibility programme. “More than a fifth of Finland’s forest species depend on deadwood at some point in their lives. It is therefore natural to set an ambitious target for the amount of deadwood in commercial forests in order to increase biodiversity. To ensure the sustainable sourcing of wood raw material in the future, we need to safeguard biodiversity in many ways,” says Tuomas Kara , Environmental Manager at UPM Forest. In addition to increasing the amount of deadwood, UPM aims to diversify the deadwood to include more

decaying standing and ground deadwood of different species in the forest. The amount of deadwood in UPM’s forests is based on data from the National Forest Inventory (VMI) of the Natural Resources Institute of Finland for forests owned by UPM. In cooperation with the Institute, the accumulation of deadwood and its impact on biodiversity will also be studied. “Our current forest management guidelines take into account increasing the amount of deadwood by saving existing deadwood and by leaving retention trees as future deadwood. Buffer zones for water bodies and areas that are completely excluded from commercial use also increase the amount of deadwood. Through further studies and modelling in collaboration with researchers, we want to find out how these measures could be further modified or improved,” says Kara.

Sixth graders go to the woods to learn about the sustainable use of forests UPM organised forest trips for sixth grade pupils at its five mill sites in Jämsä, Kouvola, Pietarsaari, Rauma and Lappeenranta, Finland, this August and September. For the sixth year in a row the excursions were organised in cooperation with the Finnish Forest Association and the 4H youth associations. The aim is to offer schoolchildren an experience of forests and to explain the sustainable use of commercial forests in an interesting way. The excursions include expert-led activity trails to learn about wood growth and the carbon cycle, the forest as a recreation area, forest regeneration and planting, and the use of forests as a source for various wood-based products.

the assessed companies based on information and data in the media and other public sources.

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FOREST ACTION PROGRAMME REPORT 2022 RELEASED SOON

upm.com/responsibility/ forests/forestaction