UPM Annual Report 2019

Made from renewable and responsibly sourced wood fibres, UPM UniqueBarr™ is a non-plastic material for wrapping.

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actively developing and testing industrial applications to create industrial-scale mill concepts andmeet the market demand. In 2019, UPM completed the basic engineering studies on the potential biorefinery in Germany. The investment decision was made in January 2020. The industrial scale biorefinery will convert solid wood into next generation biochemicals: bio-monoethylene glycol (BioMEG) and lignin-based renewable functional fillers. The biorefinery will also produce bio-monopropylene glycol (BioMPG) and industrial sugars. End-use segments for glycols include textiles, PET-bottles, packaging, de-icing products, composites, cosmetics, pharma and detergents. Renewable functional fillers are used to substitute carbon black and silica. We introduced a wood-based renewable functional fillers concept to rubber market in 2019. We work with global partners to develop new biomedical products and applications. GrowDex®, a nanocellulose hydrogel, is suitable for use in 3D cell culture and related applications, such as medical development and research. The product has been on the market since 2015. Growdex T hydrogel with advanced features, launched in 2019, is the latest addition to the Growdex product range. In 2019, we launched FibDex®, a new wound care dressing made from nanofibrillar cellulose. It is the third biomedical product made fromwood- based rawmaterials that UPMhas commercialised. Based on clinical trial results, FibDex was awarded the CEmark as it fulfils the standards and legislative requirements set for medical devices. Circular economy is the basis of growth for biocomposites UPMBiocomposites offers smart and sustainable composite products for various uses in outdoor building material and consumer products. Our target is to increase the use of recycledmaterials in products. For example, UPMProFi Piazza The biomedical product range is expanding

decking contains 75% recycledmaterials. UPMFormi composite material, made from cellulose fibres and polymers, is suitable for use in both the industrial and consumer applications, from furniture to consumer electronics. It complies with the requirements set by the EU for reinforced plastics in relation to the circular economy and its carbon footprint is 30–60% smaller than traditional plastics. A new Formi EcoAce product range, launched in 2019, has significantly lower carbon footprint compared to virgin plastic solutions. UPM Formi became ISCC (International Sustainability and Carbon Certification) certified, which guarantees that the product meets environmental and social standards along the supply chain. UPMBiocomposites has continued developing the newUPMFormi 3D biocomposite, which was launched in 2018. The focus has been on large-scale industrial 3D printing with end user applications that include casting moulds, concept models for architecture and prototypes for consumer products. New solutions in specialty packaging Made from renewable and responsibly sourced wood fibres, UPMUniqueBarr™ is a non-plastic material for wrapping. Without the plastic coating, the paper can be recycled with regular paper waste. Improved recyclability means a smaller carbon footprint thanks to prolonged material lifecycle and a reduction in landfill waste. UPM's unique concept for release liner recycling allows value chainmembers to reach their sustainability targets. Collected release liners are desiliconised and used to produce new release liner base papers.

CASE

BREAKTHROUGHS IN LIGNIN VALUE CHAIN Completely bio-based lignin is a textbook example of the work being carried out to find functional alternatives to fossil-based materials. This wood-derived material is about to find its way into many industries and products over the next few years. Almost a quarter of the dry mass of each tree is lignin, which is separated in the pulp production process and traditionally used as bioenergy through incineration. New, innovative uses of lignin, however, offer an effective way of reducing industries’ dependency on fossil materials. UPM is a pioneer in decades-long research on the utilisation of lignin in resins, adhesives, bioplastics and polyurethanes, for example. Further exciting applications can be awaited in the near future. With our knowhow in lignin chemistry and quality management, we can ensure that our products are exactly suited for the end-use applications of our customers. We offer UPM BioPiva™ lignin products together with a customised technical solution all the way to industrial implementation. Since autumn 2017, lignin has been used as part of the WISA BioBond gluing technology in plywood production. Lignin is also supplied to many of the biggest resin producers worldwide.

Spearheads for growth on page 20 Innovating for growth on page 22 UPM Biofuels on page 40 Forest Film on page 44

Developing a fully renewable beverage carton on page 23 upmbiofuels.com

upmbiochemicals.com upmbiomedicals.com

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OUR BUSINESSES

OUR BUSINESSES

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

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