UPM Pulp Matters 1/2023

UPM PULP MAGAZINE 1/2023 FIBRES FOR THE FUTURE PULP MATTERS

FIBRE PHENOMENA P. 4 HISTORIC PULP MILL PROJECT

MARKET REVIEW P. 14

CUTTING EDGE P. 18

BREAKING INTO NORTH AMERICA THE PERSONAL TOUCH P. 26 DREAM CAREER IN HOMETOWN

PIONEERING FORESTRY RESEARCH

PULP FACT P. 20

GOING LOCAL P. 30 BOOSTING ENTREPRENEURS

STATE-OF-THE-ART PULP TERMINAL

26 AT UPM’S NEW TREE NURSERY IN SARANDÍ DEL YÍ, 75 PER CENT OF THE EMPLOYEES ARE LOCAL WOMEN.

04 MISSION ACCOMPLISHED Petri Hakanen steered the growth project to a successful conclusion.

30 GENERATING GROWTH Volfer Ingenierias created a new business from temporary housing modules.

20 LOGISTICAL PUZZLE

The Montevideo pulp terminal is a core piece in the operation of UPM’s new pulp mill.

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CONTENT 1/2023 4–13 FIBRE PHENOMENA THE GIANT OF PASO DE LOS TOROS 14–17 MARKET REVIEW CONQUERING NEW MARKETS 18–19 CUTTING EDGE EUCALYPTUS EXPERTISE 20–25 PULP FACT PULP MUST FLOW 26–29 PERSONAL TOUCH HOME-GROWN OPPORTUNITY 30–31 GOING LOCAL BUILDING A BETTER FUTURE 30–31 NEWS WOOD-DECAYING FUNGI CAMPAIGN, DIGITAL FUTURES SCHOOL & STREAM WATER PROGRAMME 34–35 BUSINESS BLUEPRINT CREATING TRANSFORMATIVE GROWTH IN URUGUAY

END-TO-END CUSTOMER FOCUS WITH UPM EUCA

In this issue of Pulp Matters magazine we celebrate the completion of our transformative growth investment in Uruguay, as the new UPM Paso de los Toros pulp mill has begun operating. At the time of going to print the first customer deliveries have just been shipped from our new pulp terminal in Montevideo port, and we are proceeding with the mill’s ramp-up phase towards reaching the annual production capacity of 2.1 million tonnes. The new mill represents a major development for both UPM and our customers, as we are able to more than double our yearly production of eucalyptus pulp. We now have 15 years’ experience running the UPM Fray Bentos mill and more than 30 years’ experience in sustainable forestry in the country. This combined experience and developed expertise together with our strong R&D foundation provides us with a unique end-to-end view of the entire value chain, through which we continuously seek to add value for our customers. In this issue we introduce various elements related to the expansion of our operations in Uruguay, such as the state-of-the-art pulp terminal in Montevideo port and our new Forestry Research Centre. We also offer views on the positive local impacts provided by employment at our new nursery in Sarandí del Yí and the manufacturing of temporary housing modules for construction workers at Paso de los Toros. In addition, Petri Hakanen , SVP of the Uruguay Development Project, explains what it takes to complete such a massive undertaking as our Paso de los Toros project, while Tomas Wiklund , SVP, Sales at UPM Pulp, outlines how the company plans to enter a new market in North America, boosted by the increased capacity from Uruguay. Over the years we have developed a solid platform in Uruguay and earned a place in the industry with consistently high quality eucalyptus pulp from the Fray Bentos mill. I fully expect our new mill to gain a similar position as we strive to provide value to our customers and opportunities to grow together in the years to come.

PULP MATTERS ISSUE 1/2023 Alvar Aallon katu 1, PL 380, FI-00101 Helsinki www.upmpulp.com Publisher: UPM Pulp Editor-in-chief: Sari Hörkkö Editorial board: Fang Deng, Sari Hörkkö, Joy Li and Damyanti Rathore

PEFC/02-31-80

Promoting Sustainable Forest

Management www.pefc.org

Production and layout: Vapa Media Printing house: Grano

PULP MATTERS is published in English and Chinese. Cover: UPM Fine 170 g Paper: UPM Fine 120 g

Marcos Battegazzore VP, Pulp and Forestry Operations, UPM Uruguay

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F IBRE PHENOMENA

TEXT: TIMO NYKÄNEN PHOTOS: UPM PASO DE The construction of UPM’s world class pulp mill in central Uruguay and Finnish “Sisu” in turbulent times. THE GIANT

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LOS TOROS has required thorough planning, years of committed work OF

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F IBRE PHENOMENA

A t the end of May 2023 a historic chapter has just concluded. The largest ever investment in the history of UPM, the Finnish forest industry, and Uruguay, has culminated in the start-up of the new UPM Paso de los Toros pulp mill. As Petri Hakanen , SVP of UPM’s Uruguay Development Project states, even though similar mills are being constructed around the world, this is a unique, transformative step for UPM, since the company’s pulp business will grow by almost 60%.

“Also, I would like to correct the misconception that this project has simply been about building a new mill. It is, of course, true that we have constructed the world’s largest single line pulp mill in central Uruguay, but this has in fact been a project to develop a new concept based on an existing platform, our eucalyptus plantations and the Fray Bentos mill,” Hakanen points out. Besides the 2.1 million tonne greenfield eucalyptus pulp mill, the project has included building a pulp terminal in the port of Montevideo, as well as local infrastructure and facilities such as roads and housing. The total investment adds up to USD 3.47 billion. Hakanen has invested a lengthy period of his life in the project. For the past four-and-a-half years he has been located on site in Uruguay – and considers the experience a once in a lifetime opportunity.

”NONE OF THIS WOULD HAVE BEEN POSSIBLE WITHOUT THE COMMITMENT OF AN EXCELLENT TEAM,” SAYS PETRI HAKANEN.

At the height of the project, up to 7,500 people were working on the mill site.

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”THIS PROJECT WAS A GOOD EXAMPLE OF SUCCESSFUL COLLABORATION BETWEEN THE PRIVATE AND PUBLIC SECTOR.”

T hen, in the spring of 2020 – just when the project was getting up to speed and the organisation was ramping up – the COVID-19 pandemic struck like a bolt from the blue. However, thanks to prompt and consistent national restrictions and strict protocols at construction sites, the project continued with relatively minor complications. “The pandemic proved to be quite a test for a project where thousands of people are working simultaneously in a restricted area. At worst, 20% of the workforce were in quarantine, which naturally caused challenges. However, with the help of systematic and analytic planning, we managed to keep the works running.”

“Naturally, none of this would have been possible without the commitment of an excellent team and a large group of professionals. Funnily enough, I think I once professed in an internal meeting that I’m not really a project person, as my previous experience is mainly from running business and operations. So I’ve definitely stepped out of my comfort zone and gone through a personal development project,” he laughs. A ccording to Hakanen, the Paso de los Toros project can be divided into four phases. The first of these concluded in signing the investment agreement in November 2017. Shortly after, he was appointed to head the project. The investment agreement outlined the necessary prerequisites for UPM’s investment decision and the Uruguayan government’s criteria for balanced development of logistics, environment and employment in the country’s inland. “Something that is notable about this project is the way we have worked in cooperation with the government and public authorities from the very beginning. I consider this to be a good example of a successful collaboration between the private and public sector. When the scope of a project covers several decades, it’s even more important that the fundamentals are carefully thought out and the objective is clear.” Next, a roadmap was drawn up for implementing the investment agreement. In practice, both parties committed to certain actions in order to make the investment decision possible. For example, the government agreed to renew the country’s central railroad, enabling a direct rail connection from mill to port. “In July 2019 we reached a point where the roadmap had been implemented and we were able to go forward with the investment decision. Immediately after that we launched the third phase and began construction work on the mill, pulp terminal and all related operations,” Hakanen says.

44 months from beginning of construction to start-up

2.1 of eucalyptus pulp produced annually million tonnes

1

TWh

annual production of surplus renewable electricity

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F IBRE PHENOMENA

UPM HAS CREA COMPETITIVE INDU WITH A SUSTAINAB OF WOOD AND EFF

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ATED A HIGHLY USTRIAL PLATFORM BLE, SECURE SUPPLY FICIENT LOGISTICS.

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F IBRE PHENOMENA

Altogether 800 wood trucks enter the Paso de los Toros and Fray Bentos pulp mills daily.

STARTING UP A PULP MILL ISN’T SIMPLY A CASE OF PUSHING A BUTTON AND PRESSING A PEDAL.

The 273-kilometre railway line from Paso de los Toros to Montevideo is being renovated, opening a direct connection from mill to port.

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response has been very positive and, according to our frequent surveys, the public perception has become even more positive along the way.” T he current, fourth, phase of the project involves ramping up the operations of the mill. The entire process is made up of numerous sub-processes, as production capacity is gradually increased step by step towards the full nominal capacity. Starting up a pulp mill isn’t simply a case of pushing a button and pressing a pedal. In the closing press conference for the project, Hakanen commented that besides the actual start-up date of the mill, “This is the day I have most been looking forward to”. He admits feeling pleased and relieved that the long and eventful project is finally coming to an end. “Something that has made a huge impression on me are the brilliant people we have – I’ve witnessed individuals really putting themselves on the line and building up their know-how in the process. It’s been inspiring to see how even people who haven’t previously worked together are able to form close-knit teams with a clear focus and can-do attitude,” Hakanen praises the team, noting that at the height of the project, up to 7,500 people – representing as many as 60 nationalities – were working on the mill site. T he one thing Hakanen regrets is not having the time to become fluent in the Spanish language during his stay. “I suppose you can’t have it all,” he smiles, adding that he is, however, one of the rare cases to have been granted a permanent residence permit in the country, due to his extended visit. What comes next for him career-wise is yet to be revealed. Perhaps another mega-sized project now that he’s developed a taste for it? “With the ending of this project, one door is closed for me personally, while perhaps another one opens. From a professional perspective, I’m lucky to have had this experience and gain an extensive network of new colleagues and friends. This is also the beginning of a new chapter for the local organisation that will take care of running the entire platform during normal operation from now on. I’m confident they will continue to do a great job,” Hakanen concludes.

As a consequence of the pandemic, unprecedented logistical challenges caused major delays and shortages of supplies. This required a lot of extra planning and adjusting schedules especially for a project that is so dependent on deliveries of equipment from all around the world. And the most recent development – Russia’s war of aggression in Ukraine – has naturally also had a knock-on effect on the project through impacts on the global economy. “However, we were able to adapt to the situation and create new operating models. I’ve previously compared the pandemic to hiking with a backpack weighing 30 kilos. Once you can take that extra weight off, hiking and working is much easier. All in all, I would say we made it through this project with a combination of Finnish Sisu and Uruguayan positivity,” Hakanen says, referring to the special brand of perseverance that is often considered an inseparable part of the national identity of Finns. L ooking back at the most memorable highlights and lessons learned along the way, Hakanen continues on the topic of logistical challenges. Since Paso de los Toros is located in the centre of the country, all large scale cargo and pieces of equipment were first delivered via waterway to Fray Bentos, where they were loaded into trucks. “The overweight transport required building several temporary bridges, new roads and bypasses, and moving power lines. Also, we had to set up a new ferry connection for taking heavy deliveries across to the southern bank of the Rio Negro River.” Hakanen says that heading a project is very much about issue management and problem-solving. As opposed to leading business operations, where certain changes in the operating environment can be favourable, projects typically deal with constant headwinds and minimising setbacks. Still, he considers learning new things and finding creative solutions as one of the best parts of the job. “One thing we have learned is the importance of communicating actively and transparently with the surrounding community and society, both locally and on a national level. We have arranged over 30 information sessions to keep the community updated on activities on the mill site and how the project is progressing. The

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IN FOCUS

”The North American market gives credit to eucalyptus fibre and its superior technical properties in certain end-use areas,” says Tomas Wiklund.

CONQUERING NEW MARKETS

The Paso de los Toros mill will increase UPM’s pulp capacity by more than 50%. China remains the largest market, but UPM is also looking for success in North America.

TEXT: DAN RIDER PHOTOS: UPM

“Our customers have been asking us when they can start receiving pulp from Paso de los Toros for some time already. The mill started operations in April and we will need some time to build up our inventory, after which it will be shipped. Customers should expect our product physically in the market in the third quarter of 2023,” says Tomas Wiklund , Senior Vice President, Sales, UPM Pulp. UPM Pulp has successfully established itself as a reliable player in the Asia-Pacific region and Europe during the last decade, and is now using this experience, as well as the increased capacity available from the new Paso de los Toros mill in central Uruguay, to begin to develop its third strategic market – North America – during 2023. CHINA FIRST China remains the world’s largest pulp market. That said, there are now some concerns growing about the direction that China is moving, and whether it is going to continue to be the engine of growth for industries in the world. UPM, however, continues to have a strong belief that it is a good

market and there is going to be growth there, but probably not to the same extent as has been seen in recent decades. “It is becoming more and more important to choose who you work with in China. Even if growth isn’t the same massive annual growth percentages as previously, the actual volumes in demand and output are going to continue to increase. In addition, China is moving in a ‘quantity to quality’ direction, which also has a direct impact on the line of business that we are in. We want to work with the large, well-established, and financially sound Chinese producers. There continues to be more growth in China in comparison to other markets, so that market can more easily absorb larger quantities of new pulp,” notes Wiklund. BREAKING INTO NORTH AMERICA With the significant addition of Paso de Los Toros, UPM is determined to seek success in North America as well. Previously UPM had not delivered to the market, but rather built a customer base in Europe and Asia, with a clear growth focus on China. But with the additional 2.1 million tonnes of

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New sales team for North America

UPM Fibres is moving forward with the implementation of its commercial strategy for pulp and building a pulp sales organisation in North America. Darren Barker has joined the Pulp sales team as Sales Director, and Jean-François Royer has been appointed Senior Sales Manager. Both bring to UPM several years of commercial experience from North American companies. “My expectation is to grow substantially in North America and become a supplier of choice to this market by building a customer-centric team and capabilities that allow us to reliably offer high quality pulp products from our mills in Uruguay and Finland,” says Barker, who has previously held various roles in areas including global supply chain, IT and divisional business operations. “My goal is to showcase UPM’s sustainable pulp from state-of-the-art pulp mills and build partnerships with customers in North America,” adds Royer, who provides UPM with experience from areas including pulp sales and product quality, as well as production and process development.

capacity from the new pulp mill, the company now believes it is the right time to start selling their pulp in North America. That said, breaking into new markets has traditionally always carried elevated risks for any business. “The potential concern from investors could be due to the fact that North America is a very mature market and demand for pulp, for fibre, is not necessarily growing,” says Wiklund. “It might be growing in the tissue segment, but it is declining in the printing paper sector. But North America is the world’s third biggest pulp market, the product we are bringing to the market, eucalyptus, has different quality characteristics from the locally produced hardwood pulp, and the North American market gives credit to eucalyptus fibre and its technical properties as a superior fibre in certain end-use areas. Hence we believe that there are good prospects for us to develop a viable market there.” A GLOBAL SALES ORGANISATION BOOSTED The greater part of the 2.1 million new tonnes of pulp coming to the market will be delivered to existing customers in Asia and

Darren Barker

Jean-François Royer

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IN FOCUS

THE DEMAND FOR MARKET PULP IS ESTIMATED TO INCREASE BY ABOUT 3% ANNUALLY.

mature economies. In the Asian region, that increase in consumption of tissue or hygiene papers is mainly linked to affordability and the growing middle class.” The growing purchasing power of the middle classes, especially in the developing economies, increasing urbanisation, and concerns about the negative impact of climate change, is driving the global demand for renewable wood-based materials like pulp. The demand for market pulp is estimated to increase by about 3% annually. Pulp can be utilised to create various hygiene products, packaging products, specialty papers, textiles and more. With carefully developed plantation-based eucalyptus UPM has proven it can consistently provide its customers with the optimal characteristics for their products – qualities related to processing, like runnability, and end-uses like strength, printability, surface smoothness and opacity of the paper. UPM foresees that it will be providing pulp to entirely new products going to the market but does not currently believe that it is going to be in significant volumes, or indeed that will happen anytime soon. “I think it is rather about other things such as replacing plastics with paper packaging material. Consumer preferences see that plastic or other fossil-based products aren’t that good for the environment, despite their practical use – and that is where we will see a bigger growth in consumption demand for fibre and paper products. We will likely see new applications for our pulp appearing as well, but it will take a while,” posits Wiklund.

in Europe but also new customers in North America. “In some cases, companies in Europe and Asia have been asking for more pulp. Particularly in China, they have been building new paper machines every year that they need to feed with pulp. Now with our new pulp capacity, we can increase our supply to meet their demand,” explains Wiklund. “During the construction of the mill we strengthened our global sales organisation and now have our own sales team for North America. We have been gradually developing the organisation and our competences, furthering digitalisation in logistics and technical customer service, for example. In addition, the company’s global sales organisation has been strengthened.” “There is definitely a global market for us. We are committed to the market and our customers and we are confident about the future. While it is going to be a learning curve in 2023, this is a potentially 50-year project, so time is very much on our side.” END-USE APPLICATIONS In terms of the end-use applications, the company is confident that the quality of the pulp from the new mill will be industry leading and optimal for what the market requires to be able to convert it into the desired end products – such as tissue papers, printing papers or renewable fibre-based packaging materials. “Tissue papers is the end-use area where we see increasing demand globally and consumption is growing even in the

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Finding the perfect pulp for the customer

TEXT: SAMI ANTEROINEN PHOTO: UPM

Maria Jose Aguerrebere,

“New capacity always creates expectations and there’s a need to show that the quality is just as high and stable as before,” says María José Aguerrebere , Technical Customer Service Manager for UPM. She is referring to the Fray Bentos pulp mill which started operations back in 2007. According to Aguerrebere, the knowledge gained from Fray Bentos has been invaluable in getting the Paso de los Toros pulp mill up and running. “We have certainly gained a lot of experience we can use going forward,” she says. Aguerrebere points out that the company has two mills but one team in place in Uruguay. “We are more confident now that we can handle whatever challenges may surface.” PULP BUZZ Aguerrebere’s job consists largely of advising and consulting customers on matters such as finding the best pulp mix and process adjustments to meet the required use standards – as well as optimising cost and performance along the way. Constantly in contact with UPM’s customers, Aguerrebere reports that they’re hyped about the new mill as well. “These are well established companies that know what they want – and now we’re able to serve them even better,” she says. As sustainability and environmental issues are more and more relevant for companies and consumers alike, UPM is happy to provide a sustainable product.

“That’s a lot of sustainable expertise that we bring to the table and our customers really appreciate that.”

Technical Customer Service Manager, Americas

GET THE FACTS Aguerrebere mentions also how UPM R&D centres occupy a key role when customers are benchmarking various pulps. This enables ample support to customers making the transition to using UPM pulps. As it stands, customers often wonder about the pulp they are currently using: can we do better? “We do trials with the samples and are able to make solid recommendations to the customer, based on their genuine needs. Looking at the customer’s total production process, we can provide support every step of the way, starting with the proper adjustment of the furnish composition and refining of production parameters.” NEW CHAPTER IN A GREAT STORY Having worked for UPM for 20 years, Aguerrebere has seen major pulp moves materialise in the country – when she joined the ranks, even the Fray Bentos mill was yet to be constructed. She is very proud of the comprehensive portfolio of fibres that UPM has been able to put together over the years. “I really think it’s the best of North and South, and I would say that our customers agree.”

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CUT T ING EDGE

EUCALYP UPM’s first forestry research centre specialising in eucalyptus plantations was inaugurated in May 2022, bringing together more than 30 years of the company’s accumulated knowledge. According to Ricardo Methol , Senior Manager, Technical Development & Planning at UPM Uruguay, the work originates in the early 90s, when the focus was on testing and selecting such species of eucalyptus trees that could adapt well to local growing conditions. UPM’s new forestry research centre in Paysandú, Uruguay, is focused on developing the best possible genetic materials for tree plantations. R&D has a crucial role in supporting operations as the company prepares to more than double its production of eucalyptus pulp. TEXT: TIMO NYKÄNEN PHOTO: UPM entire operation, including harvesting and wood transport,” Methol points out. R&D AFFECTS ENTIRE VALUE CHAIN The new centre employs around 60 people, including EXPERTISE

agronomists, experts in genetic improvement, health, forestry research and wood quality, as well as chemical technologists and operators. High productivity, wood quality and good tolerance to pests and diseases are the current focus areas of the centre’s research work. Methol adds that speeding up the entire process is also a key target. “We are, of course, always looking to make improvements to the characteristics of the trees and increasing the efficiency and accuracy of identifying the best candidate clones is crucial for that. Also, testing new candidates against harsh environmental conditions caused by climate change such as frost and drought has become more important.” Methol reminds us of the fact that, before a tree clone is confirmed for operational use, it takes around 15 years of testing hundreds of candidates, out of which only one or two are selected. This requires a lot of resources for testing, trials and evaluation. The laboratories, equipment and greenhouses of the new research centre provide UPM’s skilled experts with a state-of-the-art infrastructure.

“There are over 500 species in the eucalyptus genus and we chose two of them that provide the best performance – Eucalyptus grandis and E. dunnii – as the main species to be planted in Uruguay. At the time, the dunnii species was not at all well known in Uruguay nor in the pulp industry globally, but now it is the most planted eucalyptus species in the country,” Methol says. Over the decades, UPM has worked on improving the genetic material of the trees to achieve better productivity. An important step was taken in the year 2000 when the company began to propagate its trees from cuttings instead of just from seeds. “This so-called cloning or vegetative propagation enables us to replicate exactly the same genotype of selected trees hundreds of millions of times. It helps to make the plantations more productive and uniform and provides efficiency for the

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PTUS

USD 5M

investment in new forestry research centre.

USD 2M

annual investment in forestry R&D in Uruguay.

“Also, with the inauguration of our new pulp mill in Paso de los Toros and third tree nursery in Sarandí del Yí, the scope of our work more than doubles, so the new centre provides a necessary boost. R&D is strategically critical for the company, as we are not only looking at optimising forestry operations but also selecting materials with the best characteristics for pulp production and fibre properties for customers,” Methol notes. ENHANCED ANALYTIC CAPACITY Methol says that since the new research centre was inaugurated, work has mainly focused on finetuning the equipment and especially calibrating the small nurseries where seedlings are produced for trials and new clones scaled up for production. “Each year we start a new 15-year pipeline by entering selected trees into the process. This year we were able to almost triple the amount of wood samples analysed in the initial phase, which increases our opportunities for identifying outstanding trees.” The new centre is one of the top facilities worldwide in its field and, according to Methol, UPM is a global pioneer especially in research related to Eucalyptus dunnii. “Obtaining cuttings from that species is difficult because of its intrinsically low rooting rate, so there are only a few

facilities in the world that have mastered its propagation from cuttings on an operational level.”

SUPPORTING COOPERATION In collaboration with universities and research institutions, the centre is also part of several research streams related to the sustainability of eucalyptus production. Studying water usage on plantations has been ongoing for over 20 years and monitoring the effects of plantations on the soil compared to land use for cattle grazing has continued for more than a decade. Also, as part of UPM’s biodiversity programme, biological surveys have been carried out since the early 1990s to help identify, classify and protect species and native ecosystems. Besides providing resources for collaborative research projects, the new facility will have a positive effect on forest producers associated with UPM’s Fomento Programme, which allows landowners the possibility to diversify their traditional production activities such as cat tle raising and agriculture with forestry through sustainable eucalyptus production. “We are now even better positioned to provide our partners with the latest technical advice and best possible seedlings for their plantations,” Methol concludes.

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TEXT: SAMI ANTEROINEN PHOTOS: UPM PULP MU UPM’s pulp terminal in Montevideo is a core piece in the operation of the with Senior Manager Andrés Rey about the complicated logistical puzzle

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UST FLOW new Paso de los Toros pulp mill. We talked that the massive operation requires.

The pulp terminal operates 24/7, with around 100 people working in three shifts.

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“THERE AREN’T MANY SPECIALISED PULP TERMINALS OUT THERE WITH THE SAME CAPABILITIES.”

The new pulp terminal at Montevideo port is used for receiving, handling and storing pulp and chemicals needed in pulp production. Operational since October 2022, the highly specialised, fit-for-purpose terminal targets maximum efficiency, around 100 people working in three shifts. “The terminal works 24/7 every day of the year and it can handle over two million tonnes of pulp annually,” says Andrés Rey . UPM operates the terminal on a 50-year concession. “Looking around the world, there aren’t many specialised pulp terminals out there with the same capabilities,” Rey says, adding that he feels “so proud” to have been able to participate in the project since 2016, when its design phase started. A total of 50,000 m 2 of warehouse space has been built for the terminal operations. “There’s enough space to store 150,000 tonnes of pulp,” reports Rey who has been with UPM for 17 years – always in logistics. POWERING UP THE PIER The current dock at the Montevideo port has been built to allow larger vessels to enter the port for cargo loading. Furthermore, the port depth has been increased allowing full shipments out from Montevideo. “Our pier is 240 metres long and can accommodate vessels up to 225 metres long, and with approximately 50,000 tonnes of pulp intake.” The dock can also handle operations of two very different types of vessels, making it unique in the industry: the pier can serve both tankers with liquid cargoes and general cargo vessels, with minor adjustments required and less idle time between them. “This is one example of the design solutions we’ve made – allowing quick operative adjustments at the pier and high efficiency terminal operations at the same time.” In addition, all handling of pulp is conducted with extra caution. “We have pulp handling tools and systems that cause the least damage to the cargo. Best standards and practices are deployed to ensure quality at all times,” says Rey.

“We have learned the industrial way of doing things, with focus on automation and safety,” says Andrés Rey.

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150,000 50,000 m 2 240- metre Pulp storage capacity of of warehouse space pier at Montevideo port tonnes

The project also includes a 12,000 m 2 roofed unloading area, which allows the unloading of cargo directly to the warehouse in all weather conditions. Furthermore, the terminal features fully centralised systems to boost the flow of logistics. “It’s totally different from what is the standard in Latin America,” Rey promises. GOING THE DISTANCE But how do you get pulp from the inland mill to the port? The Uruguay state is putting the finishing touches to an improved – and mostly rebuilt – railroad that will solve this issue, answers Rey. “There is full railway access planned but it’s not operational yet. In the meantime, we use trucks as an alternative means of transport.” Along with pulp heading to the port, trucks are also en route to the mill with raw materials such as caustic acid, sulphuric acid and heavy fuel oil. “At this time we have a dedicated fleet of 140 pulp trailers and 30 chemical tankers.”

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The new direct connection from Uruguay to global markets increases efficiency and supply security.

Still the trucks are only a short term solution and everybody at UPM Uruguay is eager to put pulp on the rails. “Rail is the most suitable transport mode for big volumes from, for example, economic, environmental and safety perspectives,” Rey says. ALL ABOARD THE PULP TRAIN As it turns out, the rebuilding of the 273-kilometre rail connection leading from Paso de los Toros to the capital is one of the most significant infrastructure projects in Uruguay’s history. While UPM was very active in initiating the revamping of the railway, the connection will be state-owned and open to other users as well, including passenger trains. As the government is finalising the railway connection, UPM is ready to shift logistics from road to rail – but only gradually. “Once the rail option is available, we will start to utilise it little by little, maintaining a good balance in logistics operations.” Eventually UPM expects that it will be running six daily trains, each carrying 1,664 tonnes of pulp. Rey adds that the terminal is certainly “ready for rail” with five rail tracks leading directly to it. Two tracks are used for

pulp, one for chemicals, while the other two are available for shunting and reserve use.

PRACTICE MAKES PERFECT Another piece of the puzzle is, naturally, the local workforce. Rey reports that some employees from the terminal went to UPM’s Fray Bentos pulp mill to learn the ropes and came back with valuable knowledge that they could pass on to others. “Also, we’ve brought instructors from Fray Bentos here to support our new crew, and we’re using new training tools, such as crane simulators, to get our people ready.” While learning how to handle chemicals, for example, water was used in the training as a substitute before the real thing. “We have learned the industrial way of doing things, with focus on automation and safety.” Eager to hit the ground running, Rey believes that all the planning and preparation is about to pay off very well indeed. “There are always some surprises along the way, but we’re ready to start running the show.”

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THE PERSONAL TOUCH

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TEXT: NITA VERA PHOTOS: UPM

HOME-GROWN OPPORTUNITY F ollowing her dream of becoming an agricultural engineer, Nadia Cardozo is now the head of UPM’s eucalyptus tree nursery in her hometown of Sarandí del Yí in central Uruguay. Her journey towards this current position has not been easy, as being a woman in a male-dominated field she has felt the need to work harder than her male colleagues to prove her professionalism. A s a young girl, Cardozo was always fascinated by nature, plants and animals. Despite not coming from a family of agronomists, she pursued her dream of becoming one Nadia Cardozo’s journey to become the head of UPM’s tree nursery in Sarandí del Yí has not been an easy path. However, through her determination and eagerness to learn, Cardozo now leads a nursery of 120 employees.

and completed her baccalaureate at an agricultural school. “I always wanted to be an agronomist. I am amazed by nature, the growth of plants and their generation. I also love animals and especially sheep farming has always interested me,” Cardozo says. Before starting work at UPM’s new nursery in Sarandí del Yí, Cardozo was employed as a regional coordinator in the livestock

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THE PERSONAL TOUCH

The Sarandí del Yí nursery has various positive socio economic impacts on the community.

“I VALUE THE FACT THAT UPM UNDERSTANDS THE IMPORTANCE OF EMPLOYING LOCAL WOMEN.”

ministry. For four years she travelled around 100 kilometres each day to the Capital of Durazno to work. Then the news broke that UPM was going to establish a new tree nursery. “I was tired of travelling every day to Durazno, so UPM’s announcement that it was recruiting agronomists in Sarandí del Yí was a signal that I should apply and an opportunity to work in my hometown,” Cardozo says. In 2020, during the Covid pandemic, she applied for a supervisory position in the nursery. Cardozo had no experience with trees, afforestation and nurseries, but was eager to challenge herself and learn more. After a couple of interviews, she was offered the position of head of the new nursery. “I’m proud that UPM trusted me to fulfil this position, but at the same time being responsible for a nursery of 120 employees surely felt like a challenge. It was great, but at the same time terrifying,” she says. B efore starting work at UPM in 2021, Cardozo joined a 10-month induction programme – together with two supervisors for the new nursery – in Paysandú, a city 300 kilometres from Sarandí del Yí, where UPM has its other two nurseries. “The induction programme was comprehensive: each day we accompanied the people who work in both nurseries in their daily work where they taught us the practical part of working in a nursery. Not only did we learn the operation of

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the different processes, but they also provided us with the tools to be able to handle different scenarios that could arise – always keeping in mind the importance and significance for UPM of safety and quality in each operating process. We also participated in academic courses taught by the Faculty of Agronomy,” Cardozo says. After 10 months of training, Cardozo and her two supervisors arrived at the new nursery where the first job was to plant the mother plants for all future seedlings. Work with the mother plants began the following year, at the end of March. Throughout the year different activities were incorporated, such as classification and loosening, and a year after installing the mother plants in greenhouses called “mini gardens”, the first dispatch was ready. O riginally, after Cardozo graduated as an agronomist, she realised that many positions she wanted to apply for were designated specifically for male candidates. In her experience, as a woman, everything was always slightly more difficult. For example, if she gave someone instructions in the field, people would doubt her and call her co-workers to verify her comments. “I wasn’t taken seriously and had to work doubly hard compared to my male colleagues to prove my professionalism and earn respect. These gender-related issues can become quite exhausting,” she says.

Now, as head of the nursery, Cardozo doesn’t have to deal with discrimination. She is responsible for 120 employees, of whom around 75% are women. All UPM’s tree nurseries are located in rural regions and generate job opportunities for women. “I value the fact that UPM understands the importance of employing local women because having an income allows them to be independent and make the most of all areas of their lives,” Cardozo says. T oday the Sarandí del Yí nursery has a socio-economic impact on the city, on local stores, housing and the quality of life of inhabitants. New services have also been established in the town. Cardozo recognises the positive impact the nursery has brought to her hometown, not only for the people working at UPM but also for local companies. For example, all the services required by UPM are commissioned from local businesses, which must meet company standards. “In Sarandí del Yí, as in many places in this area of the country, there is another work culture where it is very common to work seasonally for short periods. For small businesses operating locally, working for UPM allows them to expand and create new opportunities. At the beginning all changes take time, but I think it will be a positive transformation for everyone in the town,” Cardozo says.

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GOING LOCAL

BUILDING A BETTER FUTURE

Volfer Ingenierias took on a commission to build temporary housing modules for the construction workers of UPM’s new Paso de los Toros pulp mill. Despite having no prior experience, Volfer successfully delivered over 1,000 modules, which led to the company’s rapid growth.

TEXT: NITA VERA PHOTOS: VOLFER AND UPM

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T he construction of the Paso de los Toros mill provided both employment opportunities for around 6,000 workers and created new business prospects for local entrepreneurs. Among them are Emmanuel and Fabricio Romano , owners of Volfer Ingenierias, a company commissioned to build temporary housing modules for the mill builders. This new venture guided their business in a new direction, allowing them to expand their expertise and grow as a company. The success of the housing modules led the Romanos to reposition their company as a prefabricated housing manufacturer. FROM METALLURGICAL WORK TO HOUSE MANUFACTURER By then Emmanuel had graduated as an industrial engineer in Montevideo and returned to his hometown of Paso de los Toros in central Uruguay. Volfer started as a manufacturer of metal trailers, water and soil tanks, and cabins for generator sets – anything related to metal. In August 2019 Volfer was commissioned to manufacture the temporary housing modules for construction workers at the Paso de los Toros pulp mill. This involved more than just metallurgical work, so Volfer’s know-how had to be expanded to thermal fusion facilities, installation of water and electricity, and installing toilets, doors, windows and ceilings. “We had no experience in manufacturing housing modules, but really wanted to take on new challenges and expand our expertise. Initially UPM commissioned 300 modules, so we devised an assembly line similar to the mass production of cars. It was quite a challenge, but everything went as planned and on time. We even surprised ourselves that we achieved the commission,” Emmanuel says. In 18 months Volfer developed its technical knowledge and grew from a team of 30 to 120 employees. “That is a major increase in such a short time. For us it was a huge project. At the busiest time we were manufacturing a maximum of eight housing modules per day. We were stressed and overloaded with so much work, but it helped us grow as a company and as individuals,” he adds. UPM repeated the order and Volfer ended up manu facturing more than 1,000 modules not only in Paso de

los Toros but also in Durazno, an area around 60 kilometres from Paso de los Toros.

A TURNING POINT The housing modules developed for UPM were so successful that they became the starting point for a new standard product to reprofile the company as a prefabricated housing manufacturer. “Manufacturing at a component level has

”The project with UPM helped us grow as a company and as individuals,” says Emmanuel Romano. In only a year and a half, Volfer developed its technical knowledge and grew from a team

always been Volfer’s strength, so we are glad of the impact that UPM’s project has had on us. Right now we are in the process of creating a product that lowers the cost per square metre of housing,” Emmanuel says. After the pulp mill’s construction, UPM donated around 500–600 of the modules to the Uruguayan housing ministry, which plans to reconvert them for permanent housing for low and medium income families in Paso de los Toros and Durazno. Once again, Volfer was contracted to modify the temporary modules for permanent housing. “We had to make certain changes to comply with the regulations. For example, we made sure that the houses are durable, have good thermal transmittance and fire resistance and made some changes to make them soundproof. For all this, we had to certify our construction system to meet the standard requirements of the Ministry of Housing,” he explains. All in all, Romano believes that the new mill will generate further growth in the city and make it more active: “The jobs involved in the operation of the mill will be at a better educational level and salary than that of an average citizen in Paso de los Toros. This will motivate local youth to study and train themselves further,” he concludes.

of 30 to 120 employees.

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NEWS

Diverse forests thrive off decayed wood UPM is supporting a study by the Natural Resources Institute Finland (Luke) and the University of Helsinki to explore a novel way to boost populations of wood-decaying fungi. Increasing rare fungi will create new habitats for species living on decaying wood, and thus promote forest biodiversity. UPM aims to increase awareness of biodiversity and this unique study by launching a campaign where tiny billboards call the smallest creatures of the forest to settle down in an environment where biodiversity is enhanced. “We have planted mycelia of endangered species of wood-decaying fungi, such as Antrodia piceata or Perenniporia tenuis, on small wooden pegs. The pegs are then inserted into holes drilled in specific trees, some recently felled, and others naturally fallen. We monitor these trees to see if the mycelia manage to grow and spread, eventually producing fruit bodies and spores themselves,” explains Reijo Penttilä , a researcher from Luke who is in charge of the project. The Luke-led study is one of the first of its kind and examines transplantation to boost populations of wood

With the campaign UPM wants to show that even the small things can have an impact in the fight against global biodiversity loss. “Roughly a quarter of species in Finnish forests depend on decaying wood. Therefore, one of the most purposeful actions on our Forest Action Programme’s biodiversity action plan is to double the amount of decaying wood in our own forests in Finland,” says Sami Oksa , Director, Global Forest Affairs. UPM has offered its forests in Janakkala, Finland, for the Natural Resources Institute Finland (Luke) and the University of Helsinki, to put this unique study in action.

decaying fungi. A pilot experiment, concluded in 2016 in the University of Helsinki, showed promising signs of the method’s viability. “Seven years after transplantation, three of the seven species planted had already produced fruit bodies, indicating that the method could promote further spread,” Penttilä says. “The study we’re conducting now is much more extensive, it’s the broadest of its kind in the world. We expect to see initial results later this year.”

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Digital Futures School strengthens young people’s faith in the future UPM, together with Finnish IT software and service company Tietoevry, is committed to supporting and developing Futures School run by the Children and Youth Foundation. Futures School provides Finnish secondary schools with tools and learning materials to promote future-related education. The platform and learning materials are free of charge and openly accessible to everyone, and their aim is to strengthen young people’s faith in the future and in their own capabilities to cope with the challenges of a changing world. “It is important for us to engage in active dialogue with young people on the subject of sustainability, and we believe that through Futures School we can do our share to support young people in shaping their future path – while at the same learning something new ourselves,” says Kaisa Vainikka , Director, Social Responsibility at UPM.

Streamwater programme to release and restore 500 km of Finland’s rivers by 2030 As part of its water biodiversity work, UPM has adopted a new stream water programme that aims to release or restore 500 km of stream waters by 2030. The migratory fish programme launched by UPM in 2016 will be integrated into this new programme. Besides migratory fish, the biodiversity of inland waters also concerns the restoration of the habitats of other endangered species such as green club-tailed dragonfly, freshwater pearl mussel and thick shelled river mussel. Stream waters form a crucial bridge between different habitats, which is why free-flowing water is important for the vitality of stream water ecosystems. Two projects forming part of the programme – the Sapsokoski and Arvajankoski rapids – were completed in the autumn of 2022. At both sites old dams were dismantled and rapids restored, freeing up stream water routes and offering new spawning areas for migratory fish.

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BUSINESS BLUEPRINT

UPM PASO DE LOS TOROS – CREATING TRANSFORMATIVE GROWTH IN URUGUAY In August 2019, construction of UPM’s new eucalyptus pulp mill began on the banks of the Rio Negro, 12 kilometers south of the city of Paso de los Toros. After 44 months of construction work, assembly tasks and testing stages of the process areas, the start-up of the new plant took place on 14 April 2023 (Uruguay time).

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