UPM Annual Report 2017

UPM PLYWOOD

UPM BIOREFINING

UPM ENERGY • Cost competitive low-emission electricity generation in Finland consisting of hydro, nuclear and condensing power. • The total electricity generation capacity is 1,507 MWh, including UPM’s own hydropower plants and shareholdings in other energy companies • Market agility and optimisation services for industrial consumers • Largest shareholdings: – 48.32% of Pohjolan Voima Oy (PVO), which is a majority shareholder (58.5%) in Teollisuuden Voima Oyj (TVO) – 19% of Kemijoki Oy’s hydropower shares

UPM RAFLATAC • Self-adhesive label materials for product and information labelling • 10 factories and 28 slitting and distribution terminals in all continents

UPM SPECIALTY PAPERS • Labelling materials for global markets, flexible packaging for Europe and fine papers for Asian markets • Annual production capacity of 1.0 million

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 3.7 million tonnes produced at three pulp mills in Finland and one 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 870,000 tonnes • 255,000 ha of forest plantations in Uruguay • Certified sawn timber with annual capacity of 1.5 million cubic metres, produced at four sawmills in Finland • Wood-based renewable diesel and naphtha with the annual capacity of 120 million litres produced in Finland

• Magazine paper, newsprint and fine papers for a wide range of end uses • Annual paper production capacity of 8.2 million tonnes, manufactured in 15 paper mills • Capacities: Annual production capacity of 4.0 million tonnes of magazine papers,

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

#2

GLOBALLY

2.1 million tonnes of newsprint and 2.1 million tonnes of fine papers

Label papers

• The combined heat and power (CHP) plants operating on paper mill sites included in the business area

Labelstock factories China: Changshu Finland: Tampere

#1 GLOBALLY

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

Office papers

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 Chile: Santiago 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 South Africa: Cape Town, Durban and Johannesburg Spain: Barcelona Thailand: Bangkok Turkey: Istanbul Ukraine: Kiev USA: Dallas, TX and Ontario, CA Vietnam: Binh Thang Ward Di An District

#1

#2 IN CHINA

Pulp

IN EUROPE

#2

#8 GLOBALLY

IN FINLAND

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

Paper mills Austria: UPM Steyrermühl

Plywood mills Estonia: UPM Otepää

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

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

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)

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

Competitive businesses, strong market positions

OTHER OPERATIONS

Our 19,100 people work in 46 countries across six continents. With head office in Finland, our most important markets are in Europe, Asia and North America.

• Wood Sourcing and Forestry: Purchasing wood and biomass in 14 countries, 570,000 ha of own forests in Finland and 75,000 ha in the USA, offering forestry services to private forest owners in Finland • UPM Biochemicals developing biochemicals, biomediacal products and lignin products • UPM Biocomposites producing UPM ProFi outdoor products for construction and UPM Formi granulates for injection moulding and extrusion Biochemicals innovation unit

Finland: Biomedicum research and educational centre, Helsinki. Biocomposites mills Finland: UPM Lahti Germany: UPM Bruchsal (Karlsruhe)

Production plant Slitting and distribution terminal Group Head Office

CONTENTS

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UPM Annual Report 2017