UPM Annual Report 2023

BUSINESSES

UPM

BEYOND FOSSILS

RESPONSIBILITY

GOVERNANCE

ACCOUNTS FOR 2023

SETTING THE STANDARD UPM FIBRES - TIMBER

UPM Timber strives to be a trendsetter in the responsible sawmill industry.

OUR DIRECTION • To fulfil our ambitious vision of becoming a sawn timber industry leader in sustainability • To enhance profitability through efficient wood supply, integrated production chain and focused commercial strategy • Strengthening our position in chosen key markets and end-use segments

OUR STRENGTHS • Fossil-free and efficient timber production • Global sales and logistics network • Securing the growth of forests – we always know the origin of our raw material

PLANNED ACTIONS FOR 2024 • Improve profitability of sawn timber business • Continue to reduce emissions of the logistics • Develop measures in accordance with our customer promise Setting the Standard

IN ACTION

Jukka Kinnunen

After a strong year in 2022, the sawn timber business faced challenges in 2023 due to the slowdown in the European economy. Market demand was weak due to low activ ity in the construction industry and market prices stood at low levels. UPM made an investment decision to modernise the Korkeakoski sawmill. In 2025, new split saw technology will be introduced at the sawmill, which will signif icantly improve the efficiency and compet itiveness of the sawmill by using the wood raw material even more efficiently. Setting the Standard: moving beyond fossils with sustainable timber. In the long term, the demand for sustainable solutions for the construction and furniture industries will drive growth. Despite the challenging market environ ment in 2023, we continued to deliver on our customer promise, Setting the Stand ard, and focused on adding value for our customers in all market situations.

and the Port of Rauma, and using longer and larger specialised HCT trucks to transport containers from the Kaukas sawmill to the port. We are also actively promoting the benefits of wood in the construction industry and encouraging the use of wood as a substitute for fossil-based materials.

UPM Timber's sawmills have been fully powered by renewable energy since 2020. Since the second quarter of 2023, our sawmills' internal logistics have also been fossil-free, as we have started to use only renewable diesel. We have also made our external logistics more environmentally sound, for example by using time charter LNG vessels, switching to renewable diesel for transport between the Seikku sawmill

UPM TIMBER REDUCES EMISSIONS FROM LOGISTICS

In 2023, UPM Timber’s four sawmills switched to using only renewable diesel for forklifts and other heavy machinery in its internal logistics. Emissions from the transport of sawn timber products have also been reduced. Since the beginning of 2023, trucks using renewable diesel have been transporting sawn timber from the Seikku sawmill in Pori to the Port of Rauma. The use of renewable diesel reduces CO 2 emissions by up to 90%. In 2020, the Kaukas sawmill first started using larger special trucks to transport containers from the sawmill to the port. This has significantly reduced CO 2 emissions from transport. In 2023, according to the trans port partner's emissions calculator, emissions were reduced by up to 40% compared to the traditional method of transporting one container at a time.

www.upmtimber.com

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UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023