Circular Economy for the Finnish Manufacturing Industry

CIRCULAR ECONOMY FOR THE FINNISH MANUFACTURING INDUSTRY

KICK-OFF

Hosted by:

1 09:00 – 09:30 Welcome and background Jyri Arponen, Sitra KICK-OFF Laura Juvonen, Technology Industries Pekka Vanne, Accenture

AGENDA 09:30 – 09:45 Finnish Companies in Global Circular Economy Mari Pantsar, Sitra

09:45 – 10:00 Enabling the transition Pasi Viitanen, Business Finland

10:00 – 11:00 Leading company examples Cargotec, Soili Mäkinen Nokia, Pia Tanskanen #kasvuakiertotaloudesta Tamturbo, Olli Kuismanen Michelin case, Cédric Vatier (Accenture)

11:00 – 11:30 Next steps & questions Jyri Arponen, Sitra

2 Welcome and background Jyri Arponen, Laura Juvonen & Pekka Vanne SUSTAINABILITY IN ESSENCE CONSIDER ENGAGEMENT, ENVIRONMENTAL RESPONSIBILITY AND BUSINESS BOTTOM LINE

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 4 WELCOME ~50 COMPANIES JOINED THE PROGRAMME

5 PURPOSE THE PROGRAMME WILL TAKE YOUR COMPANY FROM LINEAR TO CIRCULAR

From Linear… …to Circular

Take Make Waste

Focusing on the change to customer-centricity and digitally enabled business models

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 6 WHY YOU SHOULD ENGAGE 3 DRIVING FORCES UNDERPIN THE SHIFT TO CIRCULAR ECONOMY

Customer centricity Delivers customer outcomes

Right Right delivery purpose

Circular

Technology Right Sustainability Enables new efficiency Improvesresource solutions utilization

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 7 BACKGROUND CIRCULAR ECONOMY REPORT IN JAN 2015 AND ROADMAP TO FINLAND 2016

Key take-aways

1• Need for taking the next step and realize concrete business opportunities

2• Most unexploited opportunities remain within new business and service models

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 8 INDUSTRY SCOPE THE TECHNOLOGY INDUSTRY IS THE LARGEST EXPORT SECTOR IN FINLAND

• 51 % of total Finnish exports. • Companies invest about EUR 5.5 billion annually in Finland. • 70 % of private-sector R&D investment. • Some 300,000 employed directly in the sector, 700,000 employed in total, equalling about 30% of the entire Finnish labour force. • Technology Industries of Finland has over 1,600 member companies.

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 9 INDUSTRY SCOPE TECHNOLOGY, FOREST AND CHEMICAL INDUSTRIES PROVIDE 81% OF FINLANDS’S EXPORT REVENUE

Goods and service exports: billion euros and the share of Finnish exports in 2017

Other branches; 16,1; 19%

Technology industry; Chemical industry; 13; 43,6; 51% 15%

Forest industry; 12,9; 15%

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 10 THIS PROGRAMME ADDRESSING INEFFICIENCIES IN THE LINEAR VALUE CHAINS

From inefficiencies in linear value chains… … to business value from circular

NON-RECYCLEABLE OR 1. Reform use of resources RENEWABLE RESOURCES

UNDERUTILISED 2. Optimize capacity use CAPACITIES 5. Offer outcome oriented solutions PREMATURELY ENDED LIFECYCLES 3. Extend lifecycles

WASTED EMBEDDED 4. Recover value from waste VALUES

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 11 HOW CAN CIRCULAR ADVANTAGE BE ACHIEVED FIVE CIRCULAR BUSINESS MODELS REDUCE INEFFICIENCIES AND CREATE VALUE

Optimize capacity use Reform resource use SHARING PLATFORM CIRCULAR SUPPLY CHAIN Manufacturing Logistics Increased usage rates through collaborative Use of renewable energy, bio-based or models for usage, access, or ownership potentially completely recyclable materials Marketing Sourcing & sales Offer outcome oriented solutions Circular value PRODUCT AS A SERVICE chain Recover value in waste Product Offer of product use with retention of the use product at the producer to increase resource RECOVERY & RECYCLING productivity

Reverse End of life Recovery of usable resources or logistics disposal energy from waste or by-products Extend lifecycles PRODUCT LIFE EXTENSION

Prolongation of the life cycle through repair, reprocessing, upgrading and resale Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 12 VALUE POTENIAL SIGNIFICANT VALUE CAN BE CREATED Revenue Margin impact impact Reduce cost of direct material (price reduction) CIRCULAR SUPPLY Reduce complexity through modular design N/A ++ CHAIN Reduced energy usage

Increase sales margins SHARING Charge transaction fees + ++ PLATFORM Sell add-on services

Increase service sales (maintenance & repair) PRODUCT LIFE Increase sales of spare parts +++ ++ EXTENSION Sell second hand products/materials

RECOVERY & Reduce material costs (volumes) N/A + RECYCLING Reduce disposal costs

New revenue: growth in share of wallet, entry into new segments PRODUCT AS A SERVICE +++ ++ Increased sales margins …at Step change TOTAL attractive Source: Accenture in growth… margins #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 13 LEADING EXAMPLES EARLY MOVERS WITHIN MANUFACTURING INDUSTRY HAVE ALREADY STARTED

Machinery & Equipment Marine Energy Transportation

CIRCULAR SUPPLY CHAIN

SHARING PLATFORM

PRODUCT LIFE EXTENSION

RECOVERY & RECYCLING

PRODUCT AS A SERVICE

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 14 HOW CAN CIRCULAR ADVANTAGE BE ACHIEVED NEW CAPABILITIES ARE NEEDED TO BECOME A CIRCULAR LEADER

Capabilities

1 Design solutions to deliver customer outcomes

2 Design products for circularity

3 Source recycled or recyclable material

4 Manage return flows in production

5 Sell outcomes and life-cycle service

6 Recover products at end of life

7 Deploy technologies and data for delivering outcomes

8 Orchestrate ecosystem of partners

9 Transform mindset and steering

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 15 HOW CAN CIRCULAR ADVANTAGE BE ACHIEVED TECHNOLOGIES ENABLE CIRCULAR MODELS AND ARE DISRUPTING INDUSTRIES

Emerging Improving Maturing Scale-up

Artificial intelligence Conversational Systems Machine Learning Radio-frequency identification (RFID) Internet of Things & Industrial Digital Twin Blockchain Internet 3D Printing Nano-technology Robotics Augmented Reality/ Virtual Reality UV/ IR/ NIR/ NMR Spectroscopy Energy harvesting New materials Big Data

Bio-Energy Bio-based material

Technologies Machine Vision Constantly advancing digital infrastructure (e.g. Edge / Fog Computing, Cloud, Scalable API…) Legend: Type of technology Digital Physical Biological 16 #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne IMPLEMENTATION PLAN YOUR JOURNEY

I. Explore & Shape II. Attract & Win III. Scale fast & keep growing Develop concepts for target business models, Develop processes and partnerships and Adopt multiple circular business models across look for partners, design and test prototype(s) pilot new solution to convey benefits own operations and value chain

• Detail concept in customer-centric • Implement pilot concepts and enable pilot • Apply circular concepts across offerings design process customers with new solutions within products and service portfolio, • Prototype and test with customers • Improve processes incorporating multiple business models • Use circularity as a differentiator to delivery • Raise awareness and promote new solutions

remain competitive and profitable Customer value value Customer

• Assess and strengthen internal • Ensure dedicated resources • Ensure strong buy-in and capabilities capabilities • Engage broader organization across organization • • Identify cooperation partners Define circular targets to incentivize and • Scale up delivery capability complementing own capabilities drive change in organization

• Formalize partnerships

collaboration

Organization & Organization

curve Change Change

Time

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 17 IMPLEMENTATION PREPARE FOR BARRIERS

Type of Barrier Challenges • Difficulty of customer-centric innovation and cross-functional collaboration Organizational • Difficulty of changing old mindsets of employees & Cultural • Pressure of day-to-day priorities • Lack of skills in new technologies Internal • Lack of skills in solution selling

Financial • Circular business models have different funding requirements (e.g. Product as a service requires higher working capital) • Difficulty of finding financing partners • Insufficient understanding of risks and mitigation strategies

• Complex supply chains make it difficult to control products after sale, tracking materials and

External components Ecosystem • Difficulty of finding suitable partners need to be identified to fill gaps

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 18 09:00 – 09:30 Welcome and background Jyri Arponen, Sitra KICK-OFF Laura Juvonen, Technology Industries Pekka Vanne, Accenture

AGENDA 09:30 – 09:45 Finnish Companies in Global Circular Economy Mari Pantsar, Sitra

09:45 – 10:00 Enabling the transition Pasi Viitanen, Business Finland

10:00 – 11:00 Leading company examples Cargotec, Soili Mäkinen Nokia, Pia Tanskanen #kasvuakiertotaloudesta Tamturbo, Olli Kuismanen Michelin case, Cédric Vatier (Accenture)

11:00 – 11:30 Next steps & questions Jyri Arponen, Sitra

19 SUOMALAISET YRITYKSET OSANA GLOBAALIA KIERTOTALOUTTA

24.04.2018 Johtaja Mari Pantsar, Sitra Globaali kestävyyskriisi

- Jos globaalia kestävyyskriisiä, jonka keskiössä on ilmastokriisi ja luonnonvarojen ylikäyttö, ei saada ratkaistua, putoaa pohja pois kaikelta muulta: taloudelta, hyvinvoinnilta ja turvallisuudelta.

- Globaali kestävyyskriisi on luonut maailman nopeimmin kasvavan markkinan puhtaille ratkaisuille. Pariisin sopimuksen tavoitteiden saavuttamiseksi tarvitaan 16,500 mrd dollarin investoinnit 2030 mennessä (We mean business coalition, 2016).

- Suomella voisi olla ennennäkemätön rooli globaalin kestävyyskriisin ratkaisemisessa!

#kasvuakiertotaloudesta @SitraFund @MariPantsar Maailma on täynnä hukkaa, vaikka ylitämme jo maapallon kantokyvyn Raaka-aineiden tarve kasvaa 20 vuoden aikana Miksi heitämme pois noin 80 % kuluttajatuotteista ja niiden materiaaleista ja käytämme niitä tehottomasti? Energia

Keskimäärin Autojen + 32 % 10-15 % materiaaleja keskimääräinen käytetään käyttöaste on rakennusmateriaaleista Teräs Euroopassa noin menee jätteeksi + 57 % rakennusaikana vain kerran 4% Vesi 31 % ruuasta menee hukkaan Toimistojen + 137 % arvoketjussaan. Suomessa määrä on käyttöaste on noin noin 40 % 300-400 miljoonaa kg/v Viljelysmaa, yli Lähteet: EEA, GSA, UN FAO, EU, McKinsey, Luke + 200 % #kasvuakiertotaloudesta @SitraFund @MariPantsar Product design: life cycle, adaptability & high quality Decoupling: Products, materials and their value remain in circulation Biological & technical cycles

Cross-sectoral and Circular Economy across value chains System-, digital- and service-based Renewable energy & materials (resource efficiency)

Market based, direction Access over ownership through structures and incentives

Sources: Ellen MacArthur Foundation, Sitra #kasvuakiertotaloudesta @SitraFund @MariPantsar FACTOR10

 Kiertotalous on $4.5 biljoonaa liiketoimintamahdollisuus

 30 johtavaa yritystä, joiden liikevaihto on $1.3 triljoonaa yhdistivät voimansa kiertotalouden implementoimiseksi Davosissa 2018.

 Tavoite: jätteetön toiminta ja kiertotalouden liiketoimintamallien valtavirtaistaminen.

 Fokusalueet:  Kehittää transformatiivisia arvoketjut ylittäviä kiertotalousratkaisuja  Kasvattaa yritysten tietoisuutta kiertotaloudessa läpi koko arvoketjun  Vavhistaa yritysten “ääntä” globaalisti. #kasvuakiertotaloudesta @SitraFund @MariPantsar Five business models for the circular economy Product-life extension Products are used according to their original purpose for as long as possible or repaired and refurbished for multiple re-uses, thus reducing the need for purchasing and manufacturing new products.

Product as a service The customer pays for certain functions or performance and avoids the risks of ownership. The total costs of ownership remain with the service provider, with revenue being earned by means of, for example, a leasing or rental agreement.

Sharing platforms Digital-based platforms are used to promote the increased use of goods and resources and the extension of their life cycle, such as by renting, selling, sharing and re-use.

Renewability Renewable, recyclable and biodegradable materials, as well as the principles of eco-design, are preferred for products and their design. Fossil fuels are replaced by renewable energy.

Resource efficiency and recycling Technological development enhances resource efficiency in value chains, processes and products, and allows for more effective recycling. Side-streams are valuable raw materials for recycled products and materials. Example companies on the list

3 Step IT Ekox Emmy RealGreen Valtra

EkoRent Enevo L&T Leasegreen Lem-Kem Lindström MaaS Martel RePack Solnet Valtavalo Global a

Lunchie Maapörssi ResQ Shareit Blox Car Swap.com Sharetrib Vähänkäytetty.fi e

Arctic BioGTS Gasum Jarmat Kotkamills Metener Biomaterials Neste Paptic Soilfood St1

CrisolteQ Destaclean Durat Finlayson Fortum Globe Hope Grano Kekkilä Kierrätyskeskus Lovia Novarbo Pure Waste Raisioagro RecAlkaline Remake Tarpaper Recycling TouchPoin Palpa Versofood t Examples available: https://www.sitra.fi/en/projects/interesting-companies-circular-economy-finland/ Kiitos!

Mari Pantsar p. 0503820755 [email protected] @maripantsar sitra.fi | seuraavaerä.fi @sitrafund 09:00 – 09:30 Welcome and background Jyri Arponen, Sitra Laura Juvonen, Technology Industries KICK-OFF Pekka Vanne, Accenture

09:30 – 09:45 Finnish Companies in Global AGENDA Circular Economy Mari Pantsar, Sitra

09:45 – 10:00 Enabling the transition Pasi Viitanen, Business Finland

10:00 – 11:00 Leading company examples Cargotec, Soili Mäkinen Nokia, Pia Tanskanen #kasvuakiertotaloudesta Tamturbo, Olli Kuismanen Michelin case, Cédric Vatier (Accenture)

11:00 – 11:30 Next steps & questions Jyri Arponen, Sitra

28 Enabling the transition Pasi Viitanen, Business Finland #kasvuakiertotaloudesta @BusinessFinland

BUSINESS FINLAND FUNDING 2018

PASI VIITANEN

24.4.2018 #1916550 FOR WHOM?

SME & MIDCAP STARTUP Small and medium-sized Under 5 years old enterprises and Midcap companies aiming at companies that have international markets passion and capabilities to develop and boost exports.

LARGE RESEARCH Large companies AND PUBLIC seeking to renew ORGANISATIONS themselves alongside cooperating with SMEs and research companies organisations

#kasvuakiertotaloudesta @BusinessFinland COMPETITIVE WHAT ARE LOOKINGFOR? ADVANTAGE

AMBITIOUS COMPANIES A GREAT TEAM SEEKING FOR

INTERNATIONAL SUFFICIE NT GROWTH RESOURCES

PASSION FOR GROWTH

#kasvuakiertotaloudesta @BusinessFinland SERVICES FOR DIFFERENT PHASES SCALE YOUR BUSINESS

GO TO MARKET

INNOVATE

DISCOVER OPPORTUNITIES

#kasvuakiertotaloudesta @BusinessFinland SERVICES FOR DIFFERENT PHASES

Partnerships & networks • contacts and experts around the world • networking events, workshops, business delegations

Funding • research and product development to enhance your competitive advantages, services and business models • information about target markets, feedback from potential clients

Knowledge and know-how • advice and coaching to speed up international growth • sales leads and market opportunities

#kasvuakiertotaloudesta @BusinessFinland FUNDING SERVICES FOR YOUNG GROWTH COMPANIES (under 5 years old startups) SCALE UP RESEARCH, LEARN, DEVELOPMENT YOUNG INNOVATIVE INVESTIGATE, TEST COMPANY FUNDING R&D TEMPO Develop your Develop a service, business comprehensively and Enter the export product, process or a grow rapidly in a markets business model global scale Explore demand

GO / GO / NO GO NO GO ▪ Grant 75 % ▪ Loan 50 - 70 % ▪ Grant max. 500 000 € ▪ max. 50 000 € ▪ (Grant max 50 %) ▪ Loan max. 750 000 € ▪ 75 % ▪ In 3 - 4 phases

6 #kasvuakiertotaloudesta @BusinessFinland FUNDING SERVICES FOR SMEs

EXPLORE, TEST, GO GLOBAL RESEARCH, DEVELOP, RENEW, GROW

KIITO R&D INTO TRADE FAIR Develop a product, EXPLORER Renew and prepare Increase your A group of SMEs service, process or participating to grow into a new innovation knowledge INNOVATION Purchase a business model to support your VOUCHER knowledge about together in an international international market growth targets a new export Test the Buy innovation market trade fair expertise functionality

• Grant 100 % • Grant 50 % • Grant 50 % • Grant 50 % • Loan 50% / 70 % • Grant 50 % • 5000 € + VAT • max 10 000 € • max 30 000 € • max 50 000 € • Grant max 50 % • Grant max 50 % The amount of funding depends on the company’s needs and resources

7 #kasvuakiertotaloudesta @BusinessFinland SAMPO - Made in Finland Data based business in Manufacturin Industry

Under construction Circular Economy

Under construction 09:00 – 09:30 Welcome and background Jyri Arponen, Sitra Laura Juvonen, Technology Industries KICK-OFF Pekka Vanne, Accenture 09:30 – 09:45 Finnish Companies in Global Circular Economy AGENDA Mari Pantsar, Sitra

09:45 – 10:00 Enabling the transition Pasi Viitanen, Business Finland

10:00 – 11:00 Leading company examples Cargotec, Soili Mäkinen Nokia, Pia Tanskanen #kasvuakiertotaloudesta Tamturbo, Olli Kuismanen Michelin case, Cédric Vatier (Accenture)

11:00 – 11:30 Next steps & questions Jyri Arponen, Sitra

39 Cargotec Soili Mäkinen Soili Mäkinen, CIO, Cargotec Cargotec digitalizing maritime ecosystems Cargotec, a leader in intelligent cargo handling

Every year, over 700 million container moves are being made globally in ports. Every fourth of them is handled by a Kalmar solution. 1 4 Cargotec has operations in more than 100 countries Every other ship in the world carries MacGregor equipment

Kalmar history started Equipment designed for arctic Over the past 70 years Hiab has delivered more than over 100 years ago. conditions can operate in -50° Celsius 0.5 million loader cranes to its customers.

27 April 2018 2 /

....

CRRGOTEC Inefficiency in the cargo handling chain: separate blocks between actors without connectivity

Planning & Execution: plan and execute all moves across terminal/ Analytics for better operational Increases throughput and lowers cost decision making Capture all billable events for accurate and timely billing €17 BILLION inefficiency 19milj. CO2eqv tonnes on moving Automate & improve truck turn times only empty containers

Optimise vessel load and Track vessel operational discharge across cranes Optimise rail load and performance and discharge processes environmental compliance Optimise container yard moves, save cost and reduce moves Optimise vessel stowage planning Optimise vehicle routing and costs Source: McKinsey

27 April 2018 4 Cargotec provides common digitalised platform enabling the data flow in real-time , increasing efficiency

3rd PARTY Port Call Optimisation APPLICATIONS Stowage BI & Carrier–Terminal Planning Analytics Collaboration

Ship Schedules Bookings Berthing Geo- ETA Tracking

Local VSA Partners Ocean Carriers Port Community Terminals Truck & Rail BCOs/ Agents Shippers

Soili Mäkinen, Cargotec 4/27/2018 5 Digitalised systems decreasing waste in maritime transportation

Identify new opportunities to increase terminal efficiency by using terminal resources (cranes, gangs, etc.) more effectively Reduce excess bunker fuel consumption caused by speeding to terminals only to wait outside the terminal, or by unnecessary delays departing the terminal Increase opportunities for slow steaming by informing pilots of early completion as soon as terminal operations are complete Improve vessel utilisation via better stowage plans and increased ability to accommodate last-minute loading opportunities Optimise stowage plans for the current available cranes & labour, eliminating waste of terminal capacity and shortening port stays Improve safety and eliminate stowage errors by ensuring all parties are working from the same accurate, current ship files Improve compliance through a complete recorded history of each vessel call, changes from plan to actual, and full post-call analysis

Soili Mäkinen, Cargotec 4/27/2018 6 Circularity thinking as part of new business development

Circular supply chain Product as a Service Manufacturing Logistics

Sourcing Marketing & Sales Sharing platform

Product use

Recovery & re-cycling Reverse End-of-life logistics disposal Product-life extension

Soili Mäkinen, Cargotec 4/27/2018 7 Source: Accenture

Nokia Pia Tanskanen Connecting the world

in a responsible way. Together Pia Tanskanen Nokia Head of Environment

Acquired Created Acquired Created Acquired Motorola Nokia Deepfield Nokia Alcatel-Lucent Solutions Technologies Gainspeed Siemens wireless Pulp, Networks Comptel Paper, networks Rubber, Cable, Aluminum, 2007 2011 Mobile Sold Created phones Devices Sold Acquired Nokia & HERE Withings Shanghai Services Bell

#kasvuakiertotaloudesta @Nokia @piatanska Circular Goal

Avoid waste generation

#Stop Minimize Increase landfill The reuse Waste

Improve recycling

•Sharing economy Connectivity •Product as a service

•Design for Environment •Life extension; upgrade Products •Asset recovery & repair •WEEE, batteries

•Office waste •Supplier waste Operations •Packaging waste

2450 tons oldequipment to recycling

85800 units refurbished

https://networks.nokia.com/services/care/asset-recovery www.nokia.com/people&planet

@nokia @piatanska

Olli Kuismanen VP, Partnerships Tamturbo Oy

12-15 % 5 % Industrial Compressed Air electricity of all industrial of worlds total consumption: electricity electricity COMPANY PURPOSE

Tamturbo develops and sells oil-free turbo compressors and OEM turbo units.

#kasvuakiertotaloudesta @TamturboLtd NEW WAY TO SOLVE AN OLD NEED

CUSTOMER PAIN: ”OIL-FREE” DRY AIR PURITY IS IMPERATIVE FOR INDUSTRIES SCREW COMPRESSOR

EFFICIENCY LOSS

HIGH MAINTENANCE

REQUIRES OIL

SOLUTION: TAMTURBO 100 % OIL-FREE COMPRESSOR

100% OIL-FREE

TOUCH-FREE™

CARE-FREE

#kasvuakiertotaloudesta @TamturboLtd TAMTURBO VALUE PROPOSITION

100 % Min. 10 % lower 90 % less oil-free electricity maintenance consumption

Smaller size - Over 90 % Less waste energy no barrier to treatment change recovery

20 - 30 % life cycle savings 30 - 40 k € / year 600 - 800 k € in life cycle + Environmental benefits

#kasvuakiertotaloudesta @TamturboLtd PURCHASE ALTERNATIVES

Investment + maintenance traditional compressor business

Real-time remote Investment + extended warranty monitoring Up to 10 years. All wearing parts, spare parts, and labor included and optimization. Predictive Touch-Free™ Air Maintenance. Compressor + all related expenses included Pricing: €/m3 or €/month → production changes easy, adaptive to customer needs, OPEX

#kasvuakiertotaloudesta @TamturboLtd RAHOITUSVAIHTOEHTOJA

#kasvuakiertotaloudesta @TamturboLtd CONCLUSIONS

10% better energy efficiency, leading to > 2,6 GWh saving over 15 years per unit

Highest level of energy recovery, additionally 93% savings

Virtually maintenance-free technology, saving > 300k€ savings over life-cycle, extended life-cycle

No oil waste, no oily waste, no oil in condensate water

Touch-Free™ Air grows with your business – no need to discard and buy new. Optimized capacity use - always

#kasvuakiertotaloudesta @TamturboLtd Michelin Case Cédric Vatier, Accenture MICHELIN CASE – OVERALL CONTEXT MOVE FROM PRODUCTS TO SERVICES… AND CIRCULAR ECONOMY

• 2nd largest tire manufacturer in the world • Strong pressure from Emerging Market Players (in particular, Chinese) • High-quality products, with price premium • Limited Revenue Growth • Well positioned in all mature market But • Progressively limited to the upper segments • Strong operational and financial performance (vs competitors)

MOVE FROM PRODUCTS TO SERVICES  Escape to product commoditization, price war and lack of growth  Generate profitable growth  Ensure market differentiation, while leveraging historical growth  Optimize costs  …  CREATION OF MICHELIN SOLUTIONS AND MICHELIN INCUBATOR

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 66 MICHELIN CASE – OVERALL CONTEXT …LEVERAGING ALL THE DIMENSIONS OF CIRCULAR ECONOMY…

From inefficiencies in linear value chains… … to business value from circular

NON-RECYCLEABLE OR 1. Reform use of resources RENEWABLE RESOURCES

UNDERUTILISED 2. Optimize capacity use CAPACITIES 5. Offer outcome oriented solutions PREMATURELY ENDED LIFECYCLES 3. Extend lifecycles

WASTED EMBEDDED 4. Recover value from waste VALUE

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 67 MICHELIN CASE NUMEROUS OPPORTUNITIES OF SERVICES…

When you think about tire… …do you think about all the potential associated services

➢ Pay per mile ➢ Trailer Asset Optimization ➢ Fuel Efficiency ➢ Driver coaching / Driver Assistance ➢ Services associated to tire maintenance ➢ Services for fleet management ➢ Services associated to tire recycling ➢ …

 A potential of 3bn€ in 10 Years – with “win- win” Business Cases

68 MICHELIN CASE …WITH AN APPROACH LEVERAGING THE OVERALL ECOSYSTEM…

Strategic Partners • Develop solutions in common with industry leaders • Ensure credibility solution “Pay as you drive” services (insurance, through a network of tires, car…) recognized partners • Strategic Partners : • Tire manufacturer • Insurance company Business Partners • Telecom provider • Benefit from technical / • Large data analysis specialist commercial expertise or • Business Partners means of specialized actors Example • OEM • Extend solution benefits with • Potential Partners non-core services • Infrastructure companies • Bank (Leasing solutions) Potential Partners • Driving academies • Prospect new partners for further solution extension • Find anchorage points in new markets

Source: Accenture 69 MICHELIN CASE …AND A “STEP-BY-STEP” APPROACH + 10 yrs Goal: from €300m to €3b

Federate an 3 ecosystem of business partners

Bring new services to 2 the market

Firm up existing Tire- 1 as-a-Service business Fuel- Efficiency

Vehicle Strategic Eco Fleet Usage Data Driving

Source: Accenture Uptime 70 MICHELIN MINING TIRE SOLUTION “TIRE AS A SERVICE” CIRCULAR BUSINESS MODEL

HIGHLIGHTS FROM JULY 19TH, 2013 PRESS RELEASE

• "We have collaborated with one of the world's leading tire manufacturers to launch a ground-breaking strategic business that transforms the company from selling products to selling solutions around mobility," explained Jean Cabanes, managing director for the automotive and industrial equipment industries in France and Benelux, Accenture

• "Accenture used a combination of consulting and technology services to collaborate, launch and monetize Michelin solutions' offerings in a very short time-to-market. Working side by side with Michelin solutions, we are being paid based on the future performance of Michelin solutions – which gives us a vested interest to create a successful project."

• "Based on strong collaboration, Michelin solutions and Accenture are using a value-based deal built on a pay-per-use model," said Philippe Miret, Michelin solutions' CEO. "This model creates a shared interest in long-term results, giving both organizations the opportunity to benefit directly from success."

71 MICHELIN CASE CHANGING THE GAME REQUIRES NEW CAPABILITIES

72 Source: Accenture 09:00 – 09:30 Welcome and background Jyri Arponen, Sitra Laura Juvonen, Technology Industries KICK-OFF Pekka Vanne, Accenture

09:30 – 09:45 Finnish Companies in Global AGENDA Circular Economy Mari Pantsar, Sitra

09:45 – 10:00 Enabling the transition Pasi Viitanen, Business Finland

10:00 – 11:00 Leading company examples Cargotec, Soili Mäkinen Nokia, Pia Tanskanen #kasvuakiertotaloudesta Tamturbo, Olli Kuismanen Michelin case, Cédric Vatier (Accenture)

11:00 – 11:30 Next steps & questions Jyri Arponen, Sitra

73 Next steps & questions Jyri Arponen, Laura Juvonen & Pekka Vanne PROGRAMME OVERVIEW WORKSHOPS WILL GUIDE COMPANIES TO ASSESS OPPORTUNITIES AND IDENTIFY PILOT PROJECT

Today (24/4) Week 19 (7-9 May) Week 21 (21-22 May) Week 23 (4-5 June)

Kick-off: Workshop 1: Workshop 2: Workshop 3: ”WHY” ”WHAT” ”HOW” ”NEXT STEPS”

Understand Assess & shortlist Evaluate required Plan for drivers & opportunity your opportunities technologies & capabilities your journey Clarified strategy

CIRCULAR INNOVATIONS

Readiness for pilot project

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 75 WORKSHOP OVERVIEW WE WILL WALK THROUGH 5 STEPS IN 3 UPCOMING WORKSHOPS BEFORE SUMMER

WS1 WS2 WS3

1 Define vision and 2 Screen business 3 Size value and 4 Assess capability 5 Design roadmap market position opportunities prioritize gaps

Business Value Financing Vision Capability assessment models case models

Ecosystem Ecosystem Product Set Technology partnering position portfolio target assessment

approach Start first pilot Key activities Key

Value Implementation & proposition piloting approach

Source: Accenture #kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 76 WORKSHOP OVERVIEW ACCENTURE EXPERTS WILL SUPPORT THE WORKSHOPS WS1 WS2 WS3

Philipp Buddemeier Ville Mickelsson Quentin Drewell • Opportunity • Digital/IoT • Financing models Identification • Best practice examples

Anna B. Töndevold Peter Thompson Kris Hvidsteen • Business Models • Digital Manufacturing • Transformation journey • Value case definition

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 77 WORKSHOP OVERVIEW WORKSHOP PARTICIPANTS AND GROUPS

Machinery & Equipment #1 Machinery & Equipment #2 Energy Transportation & Marine

Enabling companies

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 78 Jyri Arponen & WORKSHOP PREPARATIONS ACTIVE ENGAGEMENT BEFORE AND DURING WORKSHOPS NEEDED TO EXTRACT VALUE

In preparation for the workshop During/after each workshop

• Prepare for the workshop • Engage with the experts to get ideas and answers relevant to you • Gather required information

• Document your starting point / current thinking in pre-sent • Share your ideas and questions for others to benefit as templates well • Think of questions for the experts • Own your outcome – build your Circular Economy plan based on learnings in workshops

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 79 Jyri Arponen & WORKSHOP OVERVIEW WHAT YOU GET AT THE END – BY SUMMER

1• An increased understanding of Circular Economy business opportunities for your company • Generated by expert discussions and peer feedback

2• A prioritized set of top opportunities to pursue

3• A business plan for your chosen opportunity/-ies including • Business canvas • Value quantification • Technology requirements • Capability requirements • Implementation plan for pilot project

4• A readiness to start your pilot project and apply for funding

5• A head start of 5 months in using the playbook

#kasvuakiertotaloudesta @SitraFund @jyri_Arponen @TechFinland @Laura_Juvonen @AccentureFI @Pekka_Vanne 80 Questions?