UPM Annual Report 2016

UPM PLYWOOD

UPM BIOREFINING

UPM ENERGY

UPM RAFLATAC • Self-adhesive label materials for product and information labelling • 10 factories and 26 slitting and distribution terminals in all continents

UPM SPECIALTY PAPERS

UPM PAPER ENA

• Plywood and veneer products mainly for construction, vehicle flooring and LNG shipbuilding as well as other manufacturing industries • Production capacity: approximately one million cubic metres • Production in 9 mills in Finland, Estonia and Russia

• A versatile range of chemical pulp for many growing end uses with annual production capacity of 3.6 million tonnes produced in Finland and in Uruguay • Annual capacities in tonnes by mills: UPM Fray Bentos 1.3 million; UPM Pietarsaari 800,000; UPM Kaukas 740,000 and UPM Kymi 760,000 tonnes • Certified sawn timber with annual capacity of 1.5 million cubic metres, produced in Finland • Wood-based renewable diesel with the annual capacity of 120 million litres produced in Finland

• Cost competitive low-emission electricity generation in Finland consisting of hydro, nuclear and condensing power. The total electricity generation capacity is 1,494 MW, including UPM’s own hydropower plants and shareholdings in other energy companies • Largest shareholdings: – 44.3% of Pohjolan Voima Oy (PVO), which is a majority shareholder (58.5%) in Teollisuuden Voima Oyj (TVO) – 19% of Kemijoki Oy’s hydropower shares

• Labelling materials for global markets and fine papers for Asian markets • Annual production capacity of 1.0 million

• Magazine paper, newsprint and fine papers for a wide range of end uses • Annual paper production capacity of 8.4 million tonnes, manufactured in 15 paper mills • Capacities: Annual production capacity of 4.2 million tonnes of magazine papers, 2.1 million tonnes of newsprint and 2.1 million tonnes of fine papers • The combined heat and power (CHP) plants operating on paper mill sites included in the business area

tonnes of fine papers and 0.7 million tonnes of labelling and packaging materials

#2

GLOBALLY

Label papers

#1 IN EMEA High and mid segments #1 GLOBALLY LNG plywood

#1 GLOBALLY #1 CHINA High-end office papers

Labelstock factories China: Changshu Finland: Tampere

Pulp

France: Nancy Malaysia: Johor Poland: Kobierzyce (Wroclaw) and Nowa Wies´ (Wroclaw) United Kingdom: Scarborough USA: Mills River, NC; Fletcher, NC and Dixon, IL Slitting and distribution terminals Argentina: Buenos Aires Australia: Adelaide, Brisbane and Melbourne Brazil: Jaguariúna China: Chengdu, Guangzhou and Tianjin India: Bangalore and Navi Mumbai Indonesia: Jakarta Italy: Osnago México: Ciudad de México and Guadalajara New Zealand: Auckland Russia: Moscow and St Petersburg Spain: Barcelona Thailand: Bangkok Turkey: Istanbul Ukraine: Kiev USA: Ontario, CA Vietnam: Binh Thang Ward Di An District South Africa: Cape Town, Durban and Johannesburg

#6 GLOBALLY

#2

#1

IN FINLAND

IN EUROPE

Pulp mills Finland: UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola) and UPM Pietarsaari Uruguay: UPM Fray Bentos Sawmills Finland: UPM Alholma (Pietarsaari), UPM Kaukas (Lappeenranta), UPM Korkeakoski (Juupajoki) and UPM Seikku (Pori) Biorefinery Finland: UPM Lappeenranta Biorefinery

Hydropower plants: Finland: Harjavalta, Kallioinen (Sotkamo), Kaltimo (Joensuu), Katerma (Kuhmo), Keltti (Kouvola), Kuusankoski (Kouvola), Tyrvää (Sastamala), Voikkaa (Kouvola) and Äetsä

Paper mills China: UPM Changshu Finland: UPM Jämsänkoski (Jämsä) and UPM Tervasaari (Valkeakoski)

Plywood mills Estonia: UPM Otepää

Paper mills Austria: UPM Steyrermühl

Finland: UPM Joensuu, UPM Jyväskylä, UPM Pellos (three mills, Ristiina, Mikkeli) and UPM Savonlinna Russia: UPM Chudovo Veneer mill Finland: UPM Kalso (Vuohijärvi, Kouvola)

Finland: UPM Jämsä River Mills (Jämsänkoski and Kaipola), UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola) and UPM Rauma France: UPM Chapelle Darblay (Grand-Couronne) Germany: UPM Augsburg, UPM Ettringen, UPM Hürth, UPM Nordland Papier (Dörpen), UPM Plattling and UPM Schongau United Kingdom: UPM Caledonian Paper (Irvine), UPM Shotton Paper USA: UPM Blandin (Grand Rapids, MN)

Competitive businesses, strong market positions

OTHER OPERATIONS

Our 19,300 people work in 45 countries across six continents. With head office in Finland, our most important markets are in Europe, North America and Asia.

• Wood Sourcing and Forestry: Purchasing wood and biomass in 14 countries, 640,000 ha of own forests in Finland and 75,000 ha in the USA, offering forestry services to private forest owners in Finland • UPM Biocomposites producing UPM ProFi outdoor products and UPM Formi composite material for injection moulding and extrusion • UPM Biochemicals developing chemical building blocks, lignin products, biofibrils, and biomedical products. Biocomposites mills Finland: UPM Lahti Germany: UPM Bruchsal (Karlsruhe) Biochemicals innovation unit Finland: Biomedicum research and educational centre, Helsinki.

Production plant Slitting and distribution terminal Group Head Office

CONTENTS

ACCOUNTS

170

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UPM Annual Report 2016

UPM Annual Report 2016