UPM-Biofore-Magazine-3-2016-EN

TEXT MATTI REMES   PHOTOGRAPHY TUOMAS UUSHEIMO, JANNE LEHTINEN

Shareholder value always comes first “All measures taken by UPM in recent years have been implemented with the best possible management of our shareholders’ assets in mind,” says Björn Wahlroos, Chairman of the Board of Directors, UPM.

B jörnWahlroos was elected as Chairman of the UPM’s Board of Directors in 2008. Even back then, the forest industry was by no means new territory to him: the prominent economic expert had become closely acquainted with the industry during his prior long career in banking. “It is nearly impossible for an investment banker operating in the Nordic region not to know the forest industry. I felt that it was the field of industry I was most familiar with and that it offered an interesting challenge,” states Wahlroos. Recent years have posedmore than enough challenges for the Board of Directors. Due to the rapidly changing business environment, the company has had to thoroughly review its future course. “UPMhas been able to make balanced adjustments to its capacity and ways of working in a very challenging environment.” Clear consensus on direction After eight years, what does Wahlroos regard as the most rewarding aspect of chairing UPM’s Board of Directors? “Collaborating with President & CEO Jussi Pesonen , by far. We come fromdifferent backgrounds, you see. Jussi is the best forest industry expert I know. I, in turn, may have been able to offer some help with financial and strategic matters, as well as insights and background related to Sweden.” According toWahlroos, the Board of Directors and the operative management share a clear consensus. All strategy work is based on the principles of increasing shareholder value and prioritizing shareholder views. “All strategic measures we have taken in recent years have been implemented with the best possible management of our shareholders’ assets inmind. There have been times when traditional industries have lost sight of this principle.”

Paper business in fighting form Wahlroos believes that the smart strategic choices made by UPM’s paper business in Europe and North America (ENA) – the company’s largest business area – have beenmost important from the shareholders’ perspective. “The demand for paper has been declining continuously in developed countries, so it’s really an issue of employing delay tactics. The companies with the best resources will be the most successful in this situation.” Wahlroos notes that UPM’s paper machines outperform the competition in terms of efficiency. Optimally located production capacity and well-planned operations have additionally helped the company to uphold high capacity utilization rates at its mills. “This has enabled us to maintain profitability even in a situation which has forcedmany of our competitors into a struggle for survival.” High operational efficiency and low fixed costs helped UPMPaper ENA to achieve a strong result in the third quarter. “We still need to continue our strict cost management in the future,” Wahlroos states. New growth through innovation DuringWahlroos’ term, UPMhas advanced its Biofore strategy, which pools the strengths of the bio and forest industries to build new growth and a sustainable, innovation-driven future. “The forest industry is often considered technologically stable and rather conservative, but ‘conservative’ is not a word that describes UPM.” Wahlroos offers UPM’s biofuels business as an example: the company has already initiated commercial production of a renewable wood-based diesel fuel. UPMalso develops wood- based biochemicals. The demand for these kinds of products is expected to grow significantly over the coming years. >>

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