Sowing the Seeds of Sustainability Botnia and the Fray Bentos Pulp Mill Brand:Pulp&Paper

Botnia Cover final:Layout 1 4/2/08 11:37 Page 1 SOWING THE SEEDS OF SUSTAINABILITY BOTNIA AND THE FRAY BENTOS PULP MILL BRAND:PULP&PAPER

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The story of how Botnia, the Finnish pulp manufacturer, planned, developed and constructed its sixth pulp mill near the Uruguayan port town of Fray Bentos is big news. The price tag of US$1.1 billion is the biggest single investment in Uruguay’s history. Its projected output – one million tons of bleached eucalyptus pulp per year – is a big addition to the company’s portfolio. It’s having a big socio-economic effect, too. 8,000 new jobs have been generated in and around Fray Bentos; Botnia’s arrival has single-handedly boosted GDP in the Río Negro region by as much as 50 per cent.

Yet these and the many other positive factors that mark this landmark project don’t explain why Botnia’s newest mill has been one of very few pulp manufacturing developments to make the international headlines. Parts of the story are provocative and controversial – a tale of strong Argentine opposition, which sparked a serious row between the peoples and governments of Uruguay and Argentina. Botnia never expected such protest. The professional construction team, united in its commitment to deliver only the best, adhered strictly to the use of Best Available Techniques (BAT) and to the principles of environmental and social responsibility. How Botnia overcame the unforeseen obstacles in Uruguay is one of the most intriguing aspects of the often challenging but ultimately rewarding story.

This book commemorates the successful completion of the Fray Bentos pulp mill. In-depth features, original photographs and behind- the-scenes interviews form the core of the book. They cover the whole Botnia operation in and around Fray Bentos – the nursery, plantations, pulp manufacture, environment, social impact and export facilities – follow the planning and construction journey as it unfolded and evoke the deep spirit of cooperation and teamwork that characterised the build.

SOWING THE SEEDS OF SUSTAINABILITY

BOTNIA AND THE FRAY BENTOS PULP MILL

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SOWING THE SEEDS OF SUSTAINABILITY BOTNIA AND THE FRAY BENTOS PULP MILL

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Location Uruguay

Rosário do Sul Monte Caseros Bella Union Quarai ARGENTINA Artigas BRAZIL ARTIGAS Santana do Livramento

Rivera

Tranqueras

Bagé Salto SALTO RIVERA

Tacuarembó Aceguá PAYSANDÚ TACUAREMBÓ Paysandú Guichón Concepción Melo del Uruguay Jaguarão San Gregorio CERRO LARGO RÍO NEGRO Rio Branco Young Paso de los Toros Gualeguaychú Blanquillo Vergara TREINTA Y TRES Fray DURAZNO Treinta y Tres Bentos Mercedes Durazno Sarandí Trinidad del Yi SORIANO José Pedro Dolores Varela FLORES Chuy Cardona FLORIDA LAVALLEJA ROCHA Carmelo SAN COLONIA JOSÉ Florida San José Minas Rocha Canelones Juan L. Colonia Lacaze CANELONES MALDONADO SOUTH ATLANTIC Buenos Aires RÍO DE LA PLATA OCEAN La Plata Maldonado © Brandconsult 2008 Montevideo Botnia 1.1:Layout 1 28/1/08 11:04 Page 5

Forewords

Erkki Varis Dr. Omar María Lafluf Hebeich President and CEO, Botnia Governor of the Río Negro Department, Uruguay

Botnia’s decision in March 2005 to green light the construction These are exciting times for Fray Bentos and the Río Negro. of a million ton per year pulp mill in Western Uruguay marked After some well-documented problems following the closure of a major step forward in our strategy of energetic expansion. We the Anglo meat processing plant, our region is becoming, once wanted to take that step confidently, to add southern again, a major manufacturing and commercial centre. Botnia’s hemisphere eucalyptus to our established pulp portfolio, to gain US$1.1 billion investment is the largest industrial investment in control of the complete fibre chain from seedling cultivation to the history of Uruguay. Now, Fray Bentos is working again. the end product. On 9 November 2007, when our Fray Bentos At the local, regional and national levels, Uruguay has long mill began its start-up phase, we achieved just that. encouraged technology-rich enterprises to invest in the country The concept was to create one of the world’s most modern and utilise its many benefits. We have one of the best-educated pulp mills and an example in environmental care. This meant workforces in Latin America, a stable political/economic outlook designing in the very latest tried-and-tested technologies that and, perhaps most pertinent for Botnia, a dynamic forestry comply with the most stringent EU regulations. We also had to business that has matured well over the last 20 years. The Río establish many complementary operations at an express pace – Negro truly has a lot to offer. to refine the existing nursery and plantation infrastructure, It should be remembered that Botnia is one of Europe’s nurture eucalyptus crops with the short-fibre characteristics our most socially and environmentally responsible pulp producing customers need and build an export operation to deliver the companies. Its commitment to total environmental care in end product on time, every time. Above all, we needed to foster Uruguay has been proven many times over. The public welfare a spirit of collaboration with the people of Fray Bentos and its initiatives that have been undertaken throughout the region neighbouring areas. testify to its progressive socio-economic credentials. I would like to thank the people who helped us to overcome In Fray Bentos alone, improvements in people’s everyday the often serious challenges and to create an outstanding pulp lives can be seen everywhere: revitalised businesses, shops, business in a brand-new location: the welcoming communities hotels and services; 300 new houses, an expanded pier and two from which we have drawn our workforce, the 7,000 workers logistics centres. If predictions are correct, regional GDP will and many companies that participated in the construction phase increase by 50 per cent in the mill’s first full year of operation. and, finally, the regional and national authorities of Uruguay. We recognise that we can only improve our region’s This book celebrates a very important achievement for our fortunes with the investments, help and support of partner company. I hope very much that you enjoy it. organisations. Together, we can overcome challenges and share rewards. I am very proud of what has been achieved. Botnia 1.1:Layout 1 28/1/08 11:04 Page 6

Published by brand:pulp&paper

Maghull Business Centre 1 Liverpool Road North Maghull Liverpool L31 2HB United Kingdom

T: +44 (0) 151 526 5061 www.brandconsult.co.uk

Written and Researched by Iestyn Adams Project Directed by André Morrall Graphic Design by Andrew Cothliff Photography by André Morrall, Andrew Cothliff, Guillermo Robles and Botnia, unless stated

Acknowledgements The publishers would like to thank the very many people at companies and organisations who supplied information and imagery to support this publication: ABB, Andritz, Betamet, Brunnschweiler, Degrémont, Honeywell, Hutní Montáže, Ingener, John Deere Forestry, Kemira, Kymppi-Eristys, Lemcon, Ponsse, Pöyry and Savcor Forest.

Particular thanks go to Kirsi Seppäläinen (Manager, Communications at Botnia), Marianne Schneeberger (Communications, Botnia S.A.) and Brian Jones, former CEO of Shell Forestry, for his invaluable material on the early days of FOSA.

The opinions expressed in this publication are not necessarily those of the publishers. No liability can be accepted for any inaccuracies or omissions.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, microfilming or any information storage and retrieval system, without permission in writing from the publisher. Botnia 1.1:Layout 1 28/1/08 11:04 Page 7

Contents

OVERVIEW 01 The Heart of the Matter 08 BACKGROUND 02 Out of the Woods 12 INVESTMENT 03 Enter the Botnians 20 FORESTRY 04 Growing up Fast 26 Savcor Forest 34 John Deere Forestry 36 Ponsse 38

DEVELOPMENT 05 It’s a Go! 40 CONSTRUCTION 06 La Batalla del Papel 47 Pöyry 56 Lemcon 60 Ingener 62 Hutní Montáže 64 Betamet 66 Kymppi-Eristys 70

PROCESS 07 Coming Clean 72 Andritz 78 ABB 86 Honeywell 88 Brunnschweiler 92 Kemira 94 Degrémont 96

MARKETS 08 The Paper Trail 100 SUMMARY 09 Endings, and New Beginnings 104 Facts & Figures 110 Botnia 1.1:Layout 1 28/1/08 11:04 Page 8 OVERVIEW

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CHAPTER 01 The Heart of the Matter

ray Bentos, capital of the Río Negro, spreads inland from the sienna shores of the Río Uruguay, 300 kilometres northwest of Montevideo. It’s a beautiful Uruguayan morning. Wide tree-lined Favenues intersect the riverside road and direct travellers to the centre of town. Our destination turns out to be an elegant sun-dappled plaza. We pause a moment outside the colonial-style Intendencia, the Town Hall, and observe a group of young Fraybentinos resting under the shade of a filigree iron bandstand, which would be perfectly at home in London’s Kensington Gardens. People smile and chat on street corners. Kids swish past on motor scooters and ancient cars line well-worn pavements, rare survivors in a living motor museum. The atmosphere, welcoming and relaxed, is instantly enticing. It would be easy, at this first meeting, to dismiss Fray Bentos as a tranquil riverside backwater where nothing much happens. Adjectives like ‘sleepy’, ‘drowsy’ and ‘languorous’ are so often used OVERVIEW to describe this laid-back port town of almost 25,000 people. Yet, founded in 1859 (and named after the reclusive Jesuit monk Fraille Bento), Fray Bentos was once the pulsating industrial heart of 09 Uruguay. Its deep-water moorings accommodated even the largest ocean-going ships. The population swelled with workers from all over the world. In 1979, the heart stopped beating. We follow the road from the Intendencia building to the southern shore, past the barrio built long ago to house a massive local workforce, to the site of the mammoth beef factory that once single-handedly thrust Fray Bentos into the world spotlight. Opened in 1862 as ‘El Frigorífico Liebig de Fray Bentos’, the plant was sold to the British in the 1920s and became ‘Frigorífico Anglo del Uruguay’, or, more simply, ‘El Anglo’. Around 2,000 animals were slaughtered here every day, the meat exported to countless foreign markets. They used to call this place ‘la cocina del mundo’, the kitchen of the world. Then came nationalisation and, soon after, closure. 28 years later and the sense of desolation is palpable. Once a symbol of Uruguay’s riches, the factory is a crumbling National Historic Monument. Most prominent are the cold-storage facility, which still displays the word ‘ANGLO’ in once black letters on its vast grey exterior, the huge generators and rusting turbines. Standing on the dilapidated landing stage, close to the twin red- and-white static cranes that groan against the river breeze, we revisit the days when economic meltdown and soaring unemployment shrouded Fray Bentos like an eclipse. These later days, thankfully, are as much in the town’s history as the abandoned meat factory. So what has changed? To find out, we drive back up the coast road, skirting the town to our right, and join the traffic flowing along the Carretera Puente-Puerto highway that heads north towards arterial Route 2, the Libertador General San Martín International Bridge and, eventually, Argentina. The signs of growth are easy to read here – a brand-new multi-coloured housing development and, over the brow, the uppermost reaches of a towering chimneystack. This is our very first glimpse of the US$1.1 billion pulp mill that Botnia S.A. has just completed four kilometres upriver of Fray Bentos. It’s the largest single industrial investment in Uruguay’s history and Finland’s single largest industrial investment overseas. It’s also the catalyst in the Río Negro department’s second industrial revolution. “It’s big!” First impressions of the gleaming Botnia mill invariably relate to its size and ours is no different. The 500-hectare mill site is, at first, bewilderingly large. It needs to be this big. Closest to the entry road, the chipping facility will process 3.5 million cubic metres of locally sourced eucalyptus logs every year. Tried-and-tested ECF (Elemental Chlorine-free) techniques will then transform these chips into a million tons of high-quality bleached eucalyptus kraft pulp. There’s even a purpose-built Opposite page: the town’s filigree port, from where pulp-laden barges will head 70 kilometres downriver to the Nueva Palmira bandstand, a donation from Liebig Co. and (above) young meets old in Fray Bentos (ONTUR) export port, and on to markets in Europe and China. Botnia 1.1:Layout 1 28/1/08 11:04 Page 10 OVERVIEW

300 skilled technicians, we’re told, will operate the mill. In time, all will be Uruguayan. In total, Postcards from Fray Bentos. Clockwise from Botnia’s mill will boost the country’s GDP by 1.6 per cent (and the Río Negro’s by 50 per cent) and top left: the twin cranes of the abandoned Anglo meat factory; rows of scooters, sustain more than 8,000 jobs. I get the feeling that Fraille Bento, the hermit, might not be too Fraybentinos’ favourite mode of transport; impressed with this surge of economic and social activity. Since construction began in 2005, however, a still active Fiat 600, part of a ‘living motor the Fraybentinos have began to relive the times of economic prosperity, which ended more than a museum’; the town statue to its founder, generation ago when the Anglo machines ground to a final halt. Communities outside Fray Bentos Fraille Bento will also benefit from what is already being called the ‘Spirit of Fray Bentos’ or the ‘Botnia Effect’. So north we drive, along Route 24, into the Río Negro hinterland and the department of Paysandú. The landscapes that pass us by speak of traditional Uruguay – the verdant, gently rolling pampas of the ‘cuchillas’ or ‘wavy land’, where descendents of the gaucho continue to rear the beef herds that have been the staple of the domestic diet and trade for hundreds of years. Only the heavily log-laden transport trucks moving south to Fray Bentos suggest a departure from long-held ways of rural life. We arrive in Paysandú (population 75,000). Our journey is almost over. Forestal Oriental S.A., a fully-owned subsidiary of Botnia, one of Uruguay’s biggest forest owners and a pioneer in eucalyptus cultivation and seedling production, operates the San Francisco Nursery outside Paysandú. Inside the greenhouses, the trained Uruguayan workforce tends to an army of seedlings and cuttings, lined up smartly as if on parade. The more than 20 million plants that San Francisco nurtures every year are a valuable, sustainable, hardy and fast-growing resource. Just how fast growing soon becomes clear. Eucalyptus thrives in Uruguay’s climactic and soil conditions. It’s generally warm here and there are no distinct dry or rainy seasons. The Eucalyptus grandis and Eucalyptus dunnii species that Botnia works with grow about a centimetre a day – that’s three and a half metres a year. Plantations reach maturity in eight to 10 years. Most are located within a 200 kilometre radius of the mill, in the departments of Río Negro, Paysandú and Soriano. Botnia 1.1:Layout 1 28/1/08 11:04 Page 11 OVERVIEW 11

Though the plantations reach out for miles, this part of rural Uruguay is hardly a eucalyptus monoculture. Forestal Oriental’s commercial forests grow only on those soil types that the Uruguayan Government classifies as appropriate for tree plantations; they stand side-by-side with established agriculture. More than a third of the land is reserved for cattle grazing, bee-keeping and protected areas: 37,225 cows, 1,300 sheep and 9,600 beehives thrive on the Forestal Oriental estate; native forests and protected areas account for five per cent of its land; the plantations themselves are FSC certified. In short, stringent environmental policies are as evident here as they are at the mill. The company’s social responsibility credentials are just as apparent. Botnia is keen to act like a regional partner, rather than just an employer. Forestal Oriental will supply approximately 70 per cent of the wood raw material to the mill. The remainder will be procured through long-term contacts with private forest owners, foundations and collectives. In its regional cooperation program FOMENTO, Botnia is already hard at work supporting independent growers at small, medium and large plantations in surrounding areas, making sure that everyone, not just Botnia, benefits from the increase in regional wealth. Daylight fades as we return to Fray Bentos. We’re just in time to experience a glorious sunset illuminate the Argentinean shore and tint the fast-flowing river in flamboyant reds, golds and oranges, before wearily heading back to the modern red brick Gran Hotel Fray Bentos for a succulent entrecote and an ice-cold glass of Patricia, Uruguay’s favourite brew. The Gran Hotel itself, like the new supermarket, the department store and the five new car rental outlets, owes its existence almost entirely to Botnia. A sighting of the partially constructed Fray The story of Botnia’s arrival and subsequent settlement in Fray Bentos, Uruguay, is unique, Bentos pulp mill, past scrub woods and across the rolling pampas that characterises absorbing and sometimes controversial. Our fact-finding road trip ended quietly, its brief visions this part of rural Uruguay unresolved. Jaded as we are from our long day on the road, we already want to know more. Botnia 1.1:Layout 1 28/1/08 11:04 Page 12

CHAPTER 02 Out of the Woods

ntil Spanish navigator and explorer Juan Díaz de Solís sailed up the Río de la Plata in 1516, the sole inhabitants of the great Uruguayan plains had been nomadic Charrúa Indians and Utheir tribal neighbours, the Guarani of Paraguay. Widespread resistance to the European conquest, coupled with the lack of gold, silver and other precious metals in Uruguay, limited colonial settlement during the 16th and 17th centuries. It was in this period, however, that early Spanish settlers first introduced cattle to its prairies – beef herds have roamed the open grasslands ever since – and rapidly established a new source of wealth in the region. Uruguay’s modern-day capital, Montevideo, started life as a Spanish military fort in 1724 and gained city status just two years later, on 24 December 1726. Its naturally deep and sheltered harbour was soon transformed into a bustling port and one of South America’s foremost commercial centres

BACKGROUND was born. Yet the region’s affairs in the early part of the 19th century were characterised not by trade, but by ongoing conflicts between British, Spanish and Portuguese colonial forces, as each 12 country strived for dominance over the continent’s east coast. The nationalist reaction came suddenly, in 1811, when José Gervasio Artigas revolted against Spanish governance, led his troops to victory at Las Piedras and laid siege to Montevideo. Artigas would later become the country’s national hero, popularly admired as the ‘father of Uruguayan independence’. Even so, Provincia Oriental del Río de la Plata (present day Uruguay) spent another 14 years under foreign control before declaring its independence from Portugal-controlled Brazil on 25 August 1825 and entering a regional federation with the United Provinces of the del Río de la Plata (now Argentina). The 1828 Treaty of Montevideo ended a 500-day war against Brazil. The next step, drawing up a national constitution in 1830, cemented Uruguay’s independence. By the early 1900s, the livestock and meat processing industries had become so lucrative that Uruguay could afford to carry out extensive social and economic reforms and set itself up as ‘the Botnia 1.1:Layout 1 28/1/08 11:04 Page 13 BACKGROUND 13

Uruguay’s rich cultural history. Clockwise Switzerland of South America’. Enlightened, wealthy, a pioneer of social responsibility in South from top left: a statue to the nation’s America, its dependence on meat and wool meant that, as long as export earnings continued to founder José Gervasio Artigas in central soar, the good times would just keep on rolling. Montevideo; grand colonial architecture; So when exports faltered in the 1950s the economic fabric inevitably began to unravel. As world horse-drawn freight in the Río Negro; commemorating Fray Bentos’ meat demand for agricultural products decreased, the economy stagnated, inflation spiralled and living processing past standards plunged. In 1973, armed forces stepped in, closed Uruguay’s parliament and established a civilian-military regime. A November 1980 plebiscite rejected the military’s new draft constitution, however, and inspired a return to civilian rule. The 1984 election handed power to the Colorado Party led by Julio María Sanguinetti (1985-1990, 1995-2000). Gradually, democracy was consolidated. Free market trade and long-lasting international partnerships have been mainstays of Uruguayan economic policy ever since, gathering force under subsequent presidents: Luis Alberto Lacalle de Herrera, Jorge Batlle and Tabaré Vázquez. Work continues to liberalise the economy, invigorating the nation via foreign trade and capital. Uruguay retains some of its historic vulnerabilities. A two- year drought (1988-89) decimated livestock herds; more recently, economic woes in Brazil and Argentina, both important trade partners, plunged their smaller neighbour into recession. But its reliance on beef and wool exports is no longer absolute, thanks to the growth of tourism, finance, chemicals, IT software and technologies and, now reaching maturity, commercial forestry.

Classified Information “The scenery is very uninteresting; there is scarcely a house, an enclosed piece of ground, or even a tree, to give it an air of cheerfulness.” English naturalist Charles Darwin, who spent 10 weeks around Montevideo in 1832, was plainly unimpressed. Well there’s no accounting for taste! Botnia 1.1:Layout 1 28/1/08 11:04 Page 14 BACKGROUND UPM-Kymmene

14 Today’s visitors to Uruguay, like Darwin 175 years ago, will spend most of their time amongst Sustainable forestry has really taken root in wide-open grasslands and fields of wheat, barley, soya, rice and sunflowers. The rainforest never Uruguay since the introduction of the 1987 Forestry Promotion Law. The climate is kind extended this far south and native forests did not thrive away from the water edges, subtropical and certain species of eucalyptus reach patches and hillsides. Natural forests occupy only 3.5 per cent of the land territory, making this (until maturity in less than 10 years recently) one of the least forested countries in the world. Tree plantations in Uruguay date back to the late nineteenth century, when small quantities of tall leafy eucalyptus were established to provide shelter for livestock and wood for heat, cooking and construction. Few people thought much more about tree planting, and certainly not as a commercial enterprise, until 25 July 1951. The Food and Agriculture Organisation of the United Nations (FAO) and the World Bank chose this day to publicise their joint mission for the development of agricultural resources in Uruguay. One of key recommendations designed to improve farmers’ income and national GDP called for the establishment of sustainable forest plantations, to offset the devaluation of conventional agriculture. There are elements of ‘Jack and the Beanstalk’ in Uruguay’s forests. Jack’s mother, the English fairy tale tells us, angrily threw his magic beans out of the window one evening. Next morning, Jack was amazed to discover a gigantic beanstalk in his garden, so tall that its uppermost reaches were lost in cloud. Now tree growth in Uruguay is admittedly not quite so dramatic, but particular species reach maturity seven times faster than they do in Europe. Eucalyptus and pine respond particularly well to life in Uruguay: the former can grow more than 30 cubic metres per hectare in one year, the latter by over 20. A combination of good nutrient-rich soils and a favourable climate makes this one of the world’s best locations for growing these particular tree crops. Uruguay passed its 1968 Forestry Promotion Law to encourage the private sector to establish sustainable tree plantations across the country. Amongst the incentives offered was a partial exemption of income tax, proportionate to the annually planted areas. As a result, approximately 15,000 hectares of eucalyptus and pine were planted between 1970 and 1979, but inadequate legislation, the lack of priority growth zones and the provision of only short run loans prevented a more dramatic take-up. At best, it was a limited success. When President Sanguinetti resurrected the initiative in the late 1980s, these limitations were thrown out. Determined to expand Uruguay’s export product range and respond positively to the oil crisis that threatened the country’s native forests – companies were burning logs instead of pricey fossil fuels – the Second Forestry Promotion Law of December 1987 (Law No. 15939) went a whole Botnia 1.1:Layout 1 4/2/08 11:31 Page 15

Lead by Example It’s hard to think of Finland without its forestry industry. Today, swathes of great natural forests cover over 70 per cent of its land area, but it wasn’t always this way. Forests were dwindling at an alarming rate when the Finnish Government set up its forest management authority (now Metsähallitus) in 1859, determined to regenerate forests after felling. Now, the forestry sector accounts for 10 per cent of GDP, 30 per cent of industrial output and a third of net export earnings. Still, Finland is a byword for environmental protection and the very best in sustainable development. The origins of Finland’s modern forest industry go all the way back to 1865, when mining engineer Knut Fredrick Idestam built the country’s first ever ground-wood mechanical pulp and paper mill in the City of Tampere. Idestam teamed up with his old friend Leopold Mechelin in 1871 to create a brand-new concern – Nokia, the forestry company – named after its hometown. Tampere, BACKGROUND Nokia’s larger neighbour, is today one of Finland’s most important cities, a premier university town and a vibrant technology centre. 15 Nokia, of course, is no longer in the pulp and paper business – it’s experiencing huge success in the telecommunications sector – leaving UPM-Kymmene, Metsäliitto, Stora Enso (formerly Enso Oyj), Botnia and others to continue the legacy of Finland’s trailblazing forestry industry. Finns generally feel positive about the country’s 18 pulp mills. Most of the host towns owe their modern status, high quality of life and economic wellbeing to the forestry sector. Good shopping, Finland is a trailblazer in the pulp and education and healthcare facilities make life in a pulp mill town a pretty desirable proposition. Back paper and forestry industry sectors. Its in Uruguay, Fray Bentos is already experiencing many of the benefits that Botnia’s five Finnish advanced and environmentally responsible pulp and paper mills produce some of the locations (Kaskinen, Kemi, Rauma, Äänekoski and Joutseno) have enjoyed for years. If Uruguay world’s finest papers. Below: Botnia’s follows the economic development pathway that Finland first opened up more than a century ago, Joutseno Mill in southeast Finland it can look to the future with much optimism. UPM-Kymmene Botnia 1.1:Layout 1 28/1/08 11:04 Page 16 BACKGROUND

16 Botnia 1.1:Layout 1 28/1/08 11:04 Page 17 BACKGROUND 17 Botnia 1.1:Layout 1 28/1/08 11:04 Page 18

lot further. An extensive Commission Nacional de Estudio Agroeconomico de la Terra (CONEAT) soil Growth of Uruguay’s Forest Plantations, survey identified more than three million hectares of low productivity agricultural land as ‘Forestry 1987-2006 (000 hectares) Priority Areas’, native forests were protected and a Forestry Fund was set up specifically to subsidise new plantations. 80 Sanguinetti cherished public-private partnerships. “The state sets the direction, but it does not move the boat,” he once said. “The boat is moved by the private sector.” Here, he proposed a win- 70 win collaboration, in which the private sector would plant tree crops in priority areas, generating vital employment in depressed rural areas, while the state would act as facilitator and coordinator, 60 ensuring that pre-set quality standards were applied. Political parties and society in general liked the idea. But would the new law attract the private sector? The answer was a resounding ‘yes’. 50 Led by private enterprise from Spain, Canada, the United States, Finland, the UK and Chile, foreign investment in Uruguay’s forestry sector has been phenomenal. Government agency Dirección 40 General Forestal announces that 620,000 hectares of eucalyptus and pine were planted between 1987 and 2003. And there’s been a similar leap in quality – the cultivation of more vigorous and 30 homogenous tree stands has helped to double productivity compared to the levels attained prior to 1987 – and in sustainability. A great many forest owners have signed up to the voluntary National 20 Forest Good Practice Code and have obtained international seals of approval, particularly Forest Stewardship Council (FSC) or ISO:14000 certification. The 1987 target was to see 500,000 new acres planted. In 2004, approximately 1.8 million acres 10 of young cultivated forest were eligible for government benefits. Forestry exports surpassed the US$100 million marker that year (and represented almost five per cent of Uruguay’s GDP); the 0 1987 1990 2000 2003 2006 industry is expected to sustain 14,000 jobs by 2010 (Source: Sociedad de Productores Forestales). Now, the annual planting rate is starting to level off. Botnia is just one of many companies benefiting from Uruguay’s open and friendly investment and forestry policies. “There are many advantages for doing business in Uruguay,” Marko Janhunen, Land Use in Uruguay VP Communications and Public Relations, told the Latin Business Chronicle. “Uruguay is a politically, economically and socially very stable country. It has a good level of basic and higher education and therefore it is easy for companies to hire people with excellent skills and … the government … is favourably disposed to foreign investments.” Partly a result of its turbulent economic history, Uruguay is today well known for its liberal internationalist outlook.

BACKGROUND Of Forests, Fuels and FOSA It begins with an idea. Offer incentives and subsidies to the world’s tree planters and forestry 18 companies. Stimulate the planting of eucalyptus and pine on less productive agricultural lands. The pine goes to the sawmills; the bulk of the eucalyptus is earmarked for pulpwood. Nobody predicted that the trailblazing tree planter in the Río Negro and Paysandú departments would want something completely different. Shell arrived in Uruguay looking for biofuel. Royal Dutch Shell PLC, one of the world’s largest energy corporations, formed a new business unit in the late 1970s to examine the potential of hydrogen, solar, wind and biofuel power for the future renewable energy business, a unit that would later become Shell Renewables. I Native Forests 4.6% Purpose-grown wood from tree plantations was an attractive resource, even if the market for the I Commercial Forests 4.3% end product, biofuel, was not yet developed. Initially, Shell would supply traditional end users whilst developing its skill base. Should demand for renewable energy reach the point at which purpose- I Crops 3.7% grown wood biomass became an economically viable investment option, the company would be a I Pasture 87.4% step ahead of the competition. World demand for wood products has traditionally centred on the northern hemisphere. Natural forests in the north supplied most solid woods (sawn woods, veneers and plywood) and reconstituted products (particle board, fibreboard and paper). But the markets demanded more wood every year and before long native forests in the northern and southern hemispheres would not be able to meet demand. The answer? Sustainable tree plantations on hitherto non-forested land, planted in locations where soil and climate conditions nurtured fast tree growth and yields. Many such plantations were already established, in South Africa, Australia, New Zealand, Brazil and Chile. Shell understood these markets, their business cultures and contacts. To maximise its understanding of the forestry sector, the company employed professional foresters and required, even in the early days, that each investment be made in partnership with established local forest product companies. The first investment was made in 1980, in the Cerrado region of Brazil, followed by land purchases in New Zealand and Chile. Subsequently, Shell invested in South Africa, Congo (Brazzaville), Uruguay, Argentina and Paraguay. At its height, the portfolio incorporated 200,000 hectares, with fast-growing trees like eucalyptus planted on 120,000 hectares and 50,000 hectares conserved as natural forests and wetlands. Uruguay’s potential was noted in the mid 1980s, but it was not until the Uruguayan Government completed its land base classification that former grazing areas were purchased. The search for an appropriate joint venture partner in Uruguay led Shell Forestry to Finland, a country famous for its forest management, and the Kymmene Corporation (later UPM-Kymmene). Compañia Forestal Botnia 1.1:Layout 1 28/1/08 11:04 Page 19 BACKGROUND 19 Above: a mature eucalyptus stand ready for Oriental S.A. (FOSA) was born from this union in 1990, firstly to test production and, the following felling. Above right: cut-to-length logs dry year, to manage the planting schedule. Shell took a 60 per cent stake and operator’s responsibility. at the plantations before they are transported to the mill Soon after FOSA started work, Shell teamed up with the World Wide Fund for Nature (WWF) to conduct a ‘Tree Plantation Review’ with a wide-ranging brief: look into the appropriate environmental and sustainability issues and find the most responsible planting and harvesting solutions. Everything from the history of global plantation development and the role of plantations to industrial wood demand, biomass energy, sustainability, biodiversity, social and natural environments, operational impacts, environmental management and monitoring must be examined. Perhaps most important was the Tree Plantation Review’s final chapter, a set of guidelines intended to drive the environmental and social debate. Shell Forestry published Environmental Management for Forestry Products in March 1998. This follow on document was intended for Shell managers to use and addressed policy and operational practices (which UPM-Kymmene supported) for the Uruguayan JV. 2001 saw Shell’s efforts rewarded, as the FSC certified all 159,000 hectares of its Latin American plantations. COO Deric Quaile announced:

It is not only a ‘green label’, but also a recognition of our strong reputation in forest technology, health, safety and environment, and commitment to the process of sustainable development.

Equally important was the need to invest in R&D to obtain species/site matching and growth/yield results. It was intensive R&D that identified and cultivated high-yield Eucalyptus grandis, an optimal fibre for papermaking, and Eucalyptus dunnii, better adapted to colder areas and preferred for its relatively low chemical consumption in the pulping process, at the Uruguay plantations. But Shell’s contribution was coming to an end. During a 2002 review of its renewables strategy the decision was made to focus future investments on wind, solar and hydrogen energy, whilst curtailing efforts in biofuel. The search began for buyers for its forestry companies – including FOSA, which owned 48,000 hectares of land in the west of Uruguay. No need to look far. Minority shareholder UPM-Kymmene had an associate company that was looking to expand into Latin Comprehensive, influential, responsible: America and was particularly keen on Uruguay. It was a smooth transition and, on 14 March 2003, Shell Forestry’s collaboration with the World Wide Fund for Nature resulted in the the associate company’s press release happily announced its purchase of Shell’s stake in FOSA. The ‘Tree Plantation Review’ company, of course, was Botnia. Botnia 1.1:Layout 1 4/2/08 10:54 Page 20

The Botnia File Company: Oy Metsä-Botnia Ab, Europe’s second largest pulp producer, manufactures high quality bleached cellulose pulp grades under the marketing name Botnia

Headquarters: Oy Metsä-Botnia Ab PO Box 30 FI-02020 Metsä Espoo Finland

INVESTMENT T: +358 104 612 F: +358 104 694 402 20 Founded: 1973 in Kaskinen, Finland

Founders: Metsäpohjanmaa (a financing company), Nokia (a diverse industrial group) and G.A. Serlachius (paper makers)

Group: Botnia is part of the Metsäliitto Group, the world’s eighth largest forest industry group. Metsäliitto owns 53 per cent of Botnia; the UPM-Kymmene Corporation owns the remaining 47 per cent

Production Sites: The Fray Bentos facility is Botnia’s sixth mill. The other five are all located in Finland, at Joutseno, Kaskinen, Kemi, Rauma and Äänekoski. These mills have a combined annual production capacity of 2.7 million tons of ECF and TCF bleached pulp. Botnia also owns the Svir Timber sawmill in Podporozhye, Russia

Human Capital: 2,000 employees

Financial Results: Sales in 2006 totalled €1,311 million, compared to €947 million in 2005. The operating profit was €212.5 million; capital expenditure reached €570 million

Certificates: PEFC (Programme for the Endorsement of Forest Certification Schemes) Occupational Health and Safety Management System OHSAS 18001 Quality Management System ISO 9001 Environmental Management System ISO 14001 Chain of Custody of Wood SMS 1003-1 HACCP System Inspection of Renewable Energy Production RECS FSC: Forest Stewardship Council Botnia 1.1:Layout 1 28/1/08 11:04 Page 21

CHAPTER 03 Enter the Botnians

f you’re lucky with traffic you can drive the 725 kilometres from Botnia HQ (Revontulentie 6, Espoo) to the northernmost production unit outside Kemi in under 10 hours. The other four mills Ithat until recently completed its portfolio are closer still. Contrast this proximity with the Fray Bentos mill, which (so Google Earth tells us) is 12,760 kilometres from Espoo as the crow flies. From its well-trodden home in south and central Finland Botnia has taken a long self-reliant stride from the north to the south and, so doing, has reinforced its position as a pulp industry pioneer. Four years have passed since Botnia took that first formal step and Fray Bentos is more than fulfilling its promise. The end result confirms that expansion into Uruguay was the right move at the right time. We can all see it now. Yet this does not undermine the magnitude of Botnia’s early vision. It was an ambitious move on Botnia’s part to venture so far from its comfort zone. We soon notice that Botnians have a particular way of doing business. Like a haze of steam INVESTMENT saturating occupants in a Finnish sauna, trust, cooperation and ethical responsibility permeate this typically Finnish enterprise. Botnia’s soul is straightforward, open and (infused with ‘sisu’, ‘the Finnish 21 spirit’) resolutely tenacious. Separated though they are by more than 12,000 kilometres of Atlantic, the self-reliant Finns have much in common with the fiercely independent spirit of the gaucho.

Expansive Thinking Prepare well before making the big decision. It’s a well-known business mantra that Botnia has taken to heart. In 1999, a year after FOSA began harvesting mature plantations in Río Negro, Soriano and The virgin site. Botnia’s chosen location for Paysandú, company representatives arrived in South America scouting for properties, to build a the pulp mill lies just beyond the international bridge that links Uruguay to eucalyptus portfolio in a single ambitious investment. The Botnia Board made the official decision its great western neighbour, Argentina to expand greenfield sites internationally at the end of 2000. So Timo Piilonen (later Project Leader Botnia 1.1:Layout 1 4/2/08 10:55 Page 22

Isla Del Burro Isla To Paysandú San ARGENTINA Lorenzo Isla Nuevo Berlin Filomena Grande

24 Gualeguaychú

Isla Santa Maria Chica Isla Santa Maria Grande Isla Libertador General Zapatero Isla Ines San Martín Isla Dorrego International Bridge Abrigo

Fray Bentos 24 URUGUAY Las Cañas 2

ÍO URUGUAY 14 R 14 Mercedes DEPARTMENT OF RÍO NEGRO

2 21 To Montevideo Isla Vizcaino DEPARTMENT OF SORIANO RÍO NEGRO Isla Soriano De Lobos To Nueva Palmira © Brandconsult 2008 INVESTMENT

22 for the Fray Bentos Mill project) and his team were on the lookout for promising sites. Several The 2004 Environmental Impact Assessment locations were analysed and rejected. Then came news of Shell’s decision to pull out of its Uruguayan and Socio-economic Study confirmed that Botnia’s Uruguay Project blended clean JV with UPM-Kymmene. Talks began in late 2002 and ended in March the following year, when environmental credentials with long-term Botnia agreed to purchase 60 per cent of FOSA and take control of its 32,000 hectares of FSC-certified economic benefits plantations, 160 employees and established cultivation infrastructure. Project planners like to talk about the ‘logistics chain’ or the ‘critical path’, the complete refining and transport process that starts with raw materials and ends with the finished product at the customer’s premises. Botnia’s glass in Uruguay was still ‘half empty’; it needed a well-organised export operation, equal to its maturing forestry enterprise, and only one company in Uruguay was capable of linking the chain. Grupo Otegui has been in business a long time. As a farmer, banker and trader, its special skill is identifying sound commercial activities and acting fast to enter emerging markets. The ink was barely dry on the 1987 Forestry Promotion Law when Otegui set up Tile S.A. in 1988. That year, Tile became the first company to export significant amounts of eucalyptus round wood to Europe. 15 years passed and, having built up an unrivalled export activity in Montevideo and Nueva Palmira, Tile was ready to evolve. As a first step in what was later to become a far- reaching commercial partnership, Otegui sold half of Tile to the newly arrived Botnians. Seven months after the FOSA deal and Botnia really took the plunge. Its 24 October 2003 press release announced: ‘Oy Metsä-Botnia Ab (Botnia) is to begin studying the process of starting pulp production in Uruguay, and has set up a company called Botnia S.A. for this purpose.’ Immediately, Botnia called in Pöyry, the global consulting and engineering firm, to carry out pre-engineering. The project soon had a working title, Orion, named after the brightest star in the southern sky in honour of Botnia’s entry into the southern hemisphere. (Incidentally, Botnia has since abandoned the name, preferring that its mills be known for their location alone. This, therefore, is simply the Botnia Fray Bentos Mill.) Two variables were already all but pinned down if the mill got the go ahead: it would produce a million tons of pulp per year and be located on a site of flat scrubland facing the Río Uruguay, just outside the port town of Fray Bentos. So far everything was theoretically sound, but there was much to do before a ‘go’ or ‘no go’ decision could be made. First there were pre-engineering considerations to work through. More importantly, the necessary investigations would take time to complete before the Uruguayan Government was able to grant the relevant permits. Botnia S.A. pressed ahead, commissioning a team of experts from Uruguay and Finland to carry out an Environmental Impact Assessment (EIA) and Socio-economic Study. It was imperative to keep Botnia 1.1:Layout 1 28/1/08 11:05 Page 23

local communities, the press and non-governmental organisations (NGOs) up to date, so Botnia arranged conferences and meetings, at Club de Golf, Montevideo, on 30 October 2003 – participants included the Finnish Ambassador, the Governor of the Río Negro, an adviser from the Argentinean Embassy and 65 journalists – and at Hotel Ibis, Montevideo, on 4 November for NGOs. More than 150 people turned up the following day to attend the Río Negro Informative Meeting and, publicised in the region’s press, even more came to the Public Forum at the Club Union Oriental on 5 December. Although the feedback was generally positive, important lessons were learned. One: calm fears about potentially negative socio-economic and environmental issues, the bleaching process and atmospheric pollution. Two: talk in a simpler language.

Gathering Speed With the EIA imminent, Botnia stepped up its information campaign in early 2004. To maximise public understanding, it was important that influential Uruguayans see for themselves exactly what kind of mill was proposed. In other words, they must fly to Finland. Botnia was more than happy to make the arrangements. First came the Secretary to the President of Uruguay and the Uruguayan Ambassador, followed by a Journalists’ Tour of Botnia’s Finland in February, when representatives from several prominent Uruguayan and Argentinean papers (El País, La República, El Rionegrense, Diario Acción and so on) took the Botnia tour – and left impressed. So far so good.

The first draft EIA (March) and Socio-economic Study (April) cemented the sense of optimism. The team’s work would continue and its initial messages were very favourable:

1. ‘the mill’s effluents will be processed in a biological treatment plant which will produce toxicity free effluent which cannot damage the organisms living in or adjacent to the river.’ 2. ‘odorous emissions will be below the detectable level most of the time. In case of disturbances, odorous substance concentration may increase above detectable levels … there is no evidence of effects of the effluents of the modern pulp mills on human health.’ 3. ‘At the regional economic level major diversification will take place. A strong increase in the services sector can be foreseen, for example in the development of tourism. The operation of the mill will generate the need for new services among which are included, for example, maintenance operations.’ 4. ‘the balance of the impacts of the Botnia mill can be considered strongly positive. It is foreseen INVESTMENT that the new mill will create a process chain of economic growth in the zone and will create a base for new investments.’ 23

It’s the Botnia way to maintain open dialogue. Immediately, the company led more than 300 local people (including Uruguayan and Argentinean NGOs) through the intricacies of the EIA at a forum/Q&A in Fray Bentos on 2 March; and 90 people came to the Mercedes (Soriano) event the next day. Meanwhile, there were separate scientific seminars for interested academic parties. Backed by its findings, and by a largely positive local response, Botnia confidently sent its environmental permit application to Uruguayan environment authorities (Dirección Nacional de Medio Ambiente, A series of public hearings was arranged in or DINAMA) on 3 May. Fray Bentos, Mercedes and Montevideo, aimed at including all interested parties in The latter half of 2004 was beguilingly quiet, although Botnia managed to organise an the pulp mill discussion Authorities Delegation to Finland and launch its new quarterly magazine Espacio Botnia in August, Botnia 1.1:Layout 1 28/1/08 11:05 Page 24

Clearing the site of scrub grass, roots and trees proved to be a major undertaking. Opposite page: fencing off the entire site was one of the first important tasks for the construction team INVESTMENT

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the latter given to the people of the Río Negro, Paysandú and Soriano. Out of the limelight, however, the search was on to identify best available techniques (BAT) and settle on a technology design. “Anything I can do to help?” It was July 2004. Jorge Kliche, the Uruguay-born freelance construction management consultant, had built a strong civil engineering portfolio. His credentials were excellent. On the other end of the telephone line was Pekka Salomaa, one of Botnia’s foremost construction managers, the ex-UPM heavyweight who had already helped to realise the Rauma pulp mill and was now looking for regional partners to get the Uruguay Project literally off the ground. Another Pekka soon entered the field – Pekka Hietikko, Botnia’s Senior Construction Manager – and the engineering decision-making ‘triumvirate’ was complete: Kliche as the ‘fixer’, the bridge between Botnia and the Uruguayan contractors; Salomaa as the ‘on the ground’ Construction Manager and Hietikko taking overall responsibility as Senior Construction Manager. INVESTMENT Immediately, the three men came together to resolve the multitude of outstanding engineering questions. How could the civil works be expedited on time and within budget? How would the 100 25 plus contractors be identified and checked out? How could Botnia overcome the pre-cast concrete supply dilemma? In any case, would any of the provisional plans ever become reality?

People Power The public disclosure period lasted 120 days. In the final weeks before the all-important Public Hearing it was ‘all systems go’. An Information Office opened in Fray Bentos in early December 2004 to deal with all types of enquiry and, on 10 December, Botnia S.A. confirmed that its new MD would be the Uruguayan Ronald M. Beare. The Public Hearing was scheduled for 21 December. It seemed as if the pieces were beginning to fall into place. A debonair 40-something with impressive credentials in the forestry sector, Beare came to Botnia fresh from a successful stint as Vice President of Sales and Marketing at the Chilean company Celulosa Arauco. Over the last 15 years, he’s held managerial posts in Brazilian, Chilean and Argentinean forest companies, and served as a member of the boards of the Argentina Pulp and Paper Association and the Brazil Pulp Exporters Association. It’s fair to say Ronald Beare knows what he’s talking about. The invites were published in El País, La República, Diario Oficial and local media sources between 12 and 20 December: come to Club Armonía, Fray Bentos, at 6.30pm on 21 December and make your voice heard. The Public Hearing lasted more than six hours and only ended at one o’clock in the morning. It took this long to discuss the now complete EIA and carry out a Q&A with the 300 plus people who turned up, including representatives from Argentina and local NGOs. Will the mill’s chemicals adversely affect health? Will the discharges into the Río Uruguay destroy aquatic life? How about noise, odour, traffic? Such questions received in-depth focus. A later public poll, conducted in and around Fray Bentos, confirmed the prevailing opinion – ‘we’re happy for you to go ahead and build it’. Less than two months later, on 15 February 2005, DINAMA also said ‘yes’:

BOTNIA S.A. and BOTNIA FRAY BENTOS S.A. are hereby granted the Previous Environmental Permit for their project involving a plant for the production of bleached cellulose pulp, a port terminal, and a tax-free zone to be located in Plot Nº 1569 of the 1st Judicial District of the Province of Río Negro.

The project was on! Botnia 1.1:Layout 1 28/1/08 11:05 Page 26 FORESTRY

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CHAPTER 04 Growing up Fast

eady. Get set. Go! It’s eucalyptus the sprint specialist versus Scandinavian birch the patient distance runner. Rushing from delicate seedling to 20-metre-high maturity in less than 10 Ryears, eucalyptus finishes the growth race in record-breaking time, four to five times quicker than any of its northern hardwood rivals. And this is no ordinary eucalyptus. It’s been hand picked seed by seed, cutting by cutting, during a process of stringent selection. Many don’t make it. Those that do pass the test, however, can expect to be pampered. They will become the well-trained sprinters that form the heart of Botnia’s long-term forestry ambitions. Eminently suitable for pulp processing, their particular fibre properties are optimally suited to the manufacture of fine papers and tissues. Our idea of ‘speed’ is relative, not absolute, and even the fastest growing tree crops mature painfully slowly compared to the sheer pace at which a pulp mill can be constructed. With planning FORESTRY for the mill in its latter stages at the end of 2004 Compañia Forestal Oriental S.A. (FOSA) really needed to play catch up: vastly increasing the scope of its plantations; upping its seedling production 27 capability; forming lasting partnerships with local landowners to assure the long-term supply of particular wood stocks. Botnia would require 3.5 million cubic metres of pulpwood yearly to feed the mill and FOSA was initially expected to supply about half of the wood (this proportion was later to increase considerably). A lot still needed to be done to satisfy such colossal demand in time for the expected 2007 start-up. FOSA needed to grow up fast. Botnia had big plans when it acquired Shell’s 60 per cent share in March 2003. It would nurture Dr. José García de León, Technical FOSA’s key assets, particularly the San Francisco Nursery outside Paysandú and significantly expand Development Manager at Forestal Oriental, all aspects of operations. FOSA, it turned out, was up for the challenge and already feeling excited. speaking at the unveiling ceremony of the After an anxious period of uncertainty and underinvestment, a new life with Botnia was a good expanded tree nursery outside Paysandú, 5 opportunity to regain the operational vigour that had defined the company through the 1990s. October 2005 According to Eric Droomer, MD at the time, the timing was perfect: “Our wood base is growing and aging, it will come together at the right time. Had this happened a few years earlier, we wouldn’t have had the genetic material generated by our breeding program.” Better tree breeding continues to be a key focus. Sustained investments in R&D have helped FOSA to identify optimal tree examples and, as early as 2002, to introduce stands with pre-specified pulp/fibre characteristics. Botnia’s US$2.5 million investment in late 2005 paid for a technology-rich expanded tree nursery next to the greenhouses. This was Ronald Beare’s opinion at the grand unveiling ceremony of 5 October:

We have created a pioneering facility for Uruguay and the rest of the world. Now we have the capacity to produce 15 million eucalyptus plants a year with technologies developed by Uruguayans in Paysandú and drawn from the best international knowledge.

The Botnia effect extends to all extremities of its forestry body. In 2003, the annual seedling capacity was seven million plants. Less than two years later, it’s more than 20 million. Land holdings in early 2004 hovered around the 60,000-hectare marker, with more than half planted. By year-end 2006 this statistic had swelled to 160,000 hectares owned and 85,000 planted. 2006 saw ambitions realised as Botnia bought the remaining 50 per cent of Tile Forestal from Otegui in January (Otegui in turn took a nine per cent stake in Botnia S.A.) and appointed the experienced British forestry specialist Matthew Rivers as FOSA’s new General Manager. This was also the year in which FOSA and Tile merged into a single entity, Forestal Oriental S.A. Botnia 1.1:Layout 1 28/1/08 11:05 Page 28 FORESTRY

There’s still a lot to achieve. Consider the accomplishments of the last four years, though. Surely The San Francisco Nursery. Clockwise from top left: seeds are subjected to rigorous nobody would bet against the company reaching its target plantation area of 120,000 hectares in quality control; mechanised systems insert the next couple of years? ‘Crecemos juntos. Crecemos bien’, Forestal Oriental’s motto, says it all. ‘We seeds into the trays; inside an irrigated grow together. We grow well.’ greenhouse; nurturing the young and Talk to anyone at Forestal Oriental and you will encounter an unmistakable air of confidence. The fragile eucalyptus seedlings available wood stock stood at over a million cubic metres when the mill started operations, providing a helpful buffer for the first months of operation as activity in the forest is further accelerated to match the mill’s consumption. In the meantime, though, the new generation of eucalyptus is almost ready to leave the San Francisco Nursery and we must travel to Paysandú.

Baby Talk The meandering San Francisco that delineates the northern boundary of the Forestal Oriental nursery is described as an ‘arroyo’, a stream. Winding lazily past the facility, it performs a final horseshoe- shaped diversion and is suddenly overwhelmed by contact with the mighty Río Uruguay. Just eight kilometres north of Paysandú, the serene banks of the San Francisco seem a million miles from civilisation. We’re looking for one of the most advanced forestry technology facilities and some of the leading scientists in the country. It’s hard to believe at first that this is the right place. The land rises gently from the river and the pristine tree-lined path leads to rows of vast greenhouses. This, then, is Botnia’s San Francisco Nursery. Skilled technicians have nurtured the most promising eucalyptus seeds here for more than 15 years. It’s a many faceted, scientifically focused operation and the workforce, mainly selected from local communities, carries out everything from cultivation and irrigation to the systematic monitoring Botnia 1.1:Layout 1 4/2/08 11:01 Page 29

Above: an organic fertiliser compound of growth rates and wood fibre properties, soil types, chemical usage, water resources and the helps the cuttings to root successfully. plantations’ impact on flora and fauna. The ultimate aim is to develop the optimal cost-effective Above right: Matthew Rivers, Forestal and environmentally friendly production techniques, to ‘breed’ trees in a way that generates high Oriental’s General Manager. Below: Spanish language leaflets explain the nursery’s yields without adversely affecting the region’s natural environment. work to local communities Everything centres on the careful cultivation of two species: Eucalyptus grandis, one of the commonest and most sturdy plantation trees, widely used around the world as a raw material for paper and tissues, and Eucalyptus dunnii, which is better suited to colder areas. For two reasons the latter was initially a brave choice. Compared to Eucalyptus grandis it is, in one expert’s words, ‘shy and reluctant to flower’ (FOSA overcame this obstacle by joining an eight-year-old scion and a three- year-old graft, producing a strain that nurtures plants full of flowers and sheds large numbers of seeds per tree). A far greater risk lay with the species’ reputation in the pulp and paper business. Even FORESTRY as the first stands were harvested in 2000 the general opinion was that Eucalyptus dunnii was no good as pulpwood. 29 The technicians at UPM’s Pietarsaari plant agreed to give it a go. “I wasn’t sure I wanted to hear the results – it was going to be either heaven or hell,” Droomer recalls. He need not have worried. Tests proved that the properties of Eucalyptus dunnii have some important technical advantages over even Eucalyptus grandis. It has also proved to be an excellent raw material for fibreboard.

First Principles It starts with mountains of seeds, collected from so-called ‘elite’ trees. Inside the laboratory technicians analyse small quantities at a time through microscopes and take out anything that does not appear to be absolutely perfect. The remainder is passed over for propagation. An automated process injects sets of seeds in a nurturing gel into compost trays so that the whole set germinates at the same time. The trays go into mammoth irrigated greenhouses and are carefully monitored for moisture and temperature until the seedlings are 25 centimetres tall, with six or eight leaves, ready for planting. But not every plant that leaves the nursery is a seedling. Many are cuttings, or ‘clones’. Using terms such as ‘cloning’ and ‘genetic engineering’ might be scientifically correct, but both undoubtedly have negative connotations for those outside the industry. They suggest the artificial creation of life, of unnaturally manipulating DNA to create ‘genetically modified organisms’ (GMOs) like Dolly the Sheep. Is this the same thing, we ask? Some NGOs certainly think so. Two questions Botnia 1.1:Layout 1 4/2/08 11:02 Page 30 FORESTRY

30 need to be answered: (1) in the Forestal Oriental sense what exactly is a ‘clone’; and (2) why use Above left: after intensive care at the clones instead of seeds? Luckily, Dr. José García de León, Forestal Oriental’s Technical Development nursery, thriving eucalyptus specimens are Manager, is on hand to answer our queries: planted and monitored until they are ready for felling and transportation to the Fray Bentos mill site. Above: Botnia is committed A clone is literally a propagated cutting. What we do is identify our best young seedlings to the preservation of native forests at such and snip off a small section, a stem with typically two leaves. This cutting is planted in sites as the Mafalda Reservation compost and irrigated for around 30 days until its root system has developed, after which it grows like a normal seed. I must stress that this is not genetic manipulation. The point is to protect the precious genetic material the seedling provides and replicate its individual biological features. There’s nothing sinister in the process. In fact just about any amateur gardener ‘clones’ plants.

But why exactly are clones used? “What we want is a well-built, robust plant,” José García explains, patiently. “Cloning allows us to customise the fibre resource, to develop fibre producing trees with good wood density, greater tolerance to disease and greater uniformity. Trees in a given stand are more or less identical, which ensures consistent quality of the wood. So you see there are many advantages.” Nets are hung over the crop once the seedlings and cuttings have germinated, to protect them from marauding birds. The whole stock rotation system takes 16 weeks, from seed sowing or cutting insertion to hardening outside to lessen stress prior to the spring and autumn planting systems. All in all it’s an extremely impressive and efficient operation.

Planting Value Forestal Oriental’s plantations spread out in an arc across Western Uruguay. Most are located within 200 kilometres of the mill, in the three departments that include and surround Fray Bentos: Río Negro, Paysandú and Soriano. At least a third of the land is reserved for grazing, for native forests and protected areas. It is not uncommon to see herds of cows feeding on open pastures immediately next to a eucalyptus stand; this not only preserves traditional means of agriculture, but, since cattle limit grass growth between stands, also lowers the risk from fire. Forestal Oriental’s commitment to multi-faceted land use safeguards biodiversity and delicate areas. Three such areas are worth mentioning: the 1,700-hectare ‘Mafalda’ reservation in Tres Bocas, Botnia 1.1:Layout 1 28/1/08 11:05 Page 31 FORESTRY 31 Distribution of Land Holdings Río Negro, which contains important specimens of natural forest and rare biodiversity, the 140- hectare ‘Santa Carolina’ site, which has fossil findings, and ‘El Orubú’, a 227-hectare area with high scenic value and many protected palms. These locations and many more will be preserved for future generations to enjoy. 3,445 hectares have already been voluntarily declared as protected areas. Meanwhile, as a result of its responsible forestry practices, the plantations are Forest Stewardship Council (FSC) certified, a system that such prominent NGOs as Greenpeace and WWF endorse. Modern mechanical planters and an army of locally based labourers introduce the eucalyptus seedlings to their new homes: pre-specified land of low agricultural value. Maintenance is regular and thorough over the 8.5 to 10 years they take to reach maturity, shooting up by 30 cubic metres per hectare/year in the warm but moist Uruguayan climate. After a decade of growth, Eucalyptus grandis can be 30 metres tall and over 0.2 solid cubic metres per stem, ready for harvesting. Reducing the number of chainsaws and introducing new, safer technologies is part of Forestal Oriental’s commitment to safe working habits. Today, around 40 machines fell over two million cubic metres of wood annually. It’s fascinating to watch one of these machines fell, debark, delimb, cut to length and pile a trunk, all in less than a minute. The pulpwood is then left to dry at the stump; a fleet of forwarders then hauls the logs to the roadside for two months’ drying time, after which I Protected 3% they are loaded onto 30-ton highway trucks and transported to the Fray Bentos pulp mill. A little I Native Forests 2% land management and composting later and the whole process can begin all over again. I Infrastructure 7% I Grazing 28% In Union I Plantable 60% Forestal Oriental likes partnerships. One of its most significant initiatives of the last few years is FOMENTO, a cooperation program with local landowners that aims to build forestry expertise throughout the region and provide between 20 and 30 per cent of the mill’s raw material needs. Participating landowners sign a medium or long-term agreement to provide wood for the mill. Attracted by the prospect of a lucrative diversification opportunity, preset prices and an assured market, several landowners have already signed up. Forestal Oriental then supplies the seedlings and provides access to an experienced knowledge bank (planting, harvesting, certification), to ‘fast track’ silvicultural know-how. Good relations with the local community are essential. In FOMENTO, Forestal Oriental is building long-lasting partnerships and insisting that those who help Botnia meet its raw material demand are amply rewarded. Botnia 1.1:Layout 1 28/1/08 11:05 Page 32 FORESTRY

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Studies Forestal Oriental has a long history of carrying out systematic and rigorous studies of its operations since conducting its first Environmental Impact Assessment (EIA) in 1992. At the time, EIAs were very rare in Uruguay. The third such study has just been completed and Forestal Oriental is in the process of reviewing and analysing its findings, so that its practices can be adapted to optimise impacts. The pioneers, Shell Forestry and UPM-Kymmene, established a strong company emphasis on scientific rigour, systematic studies, evaluation and the adoption of Best Operating Practices (BOP). This philosophy continues to characterise Forestal Oriental, particularly in its approach to commercial processes and the study of environmental and social impacts.

Commercial Processes FORESTRY Forestal Oriental strives to maximise the efficiency and productivity of commercial eucalyptus forestry in its environment. This encompasses: (1) silviculture (tree spacing, fertiliser, weeding and their results 33 on tree growth); (2) monitoring of pests and diseases; and (3) work studies (alternative machines and techniques, their productivity and impacts).

Environmental and Social Impacts While Forestal Oriental often uses local experts, the international dimension of the business has also encouraged the use of world experts, all contributing to the development of forestry in Uruguay. Longer-term studies focus on biodiversity, hydrology, geology, soils and the multiple use of resources – opportunities to sustain complementary and synergistic activities on Forestal Oriental land, such as beekeeping/honey production, mushroom collecting and cattle grazing. On 4 January 2001, its work was rewarded, as Forestal Oriental received the first FSC Forest Management and Chain of Custody certificate ever to be awarded in Uruguay. Over the years, a substantial effort has been made to engage with and educate local communities about the new land use. Accompanied visits to the nursery and plantations explain the production cycle, forestry activities and end uses for the raw materials. Forestal Oriental is determined to act as a responsible and supportive partner amongst the communities in which it operates.

Why Eucalyptus? Indigenous to Australia, eucalyptus has since spread to all continents. At first, those who planted eucalyptus were attracted primarily by its fast growing properties and suitability for timber construction. Initial impressions that this was a low commercial value fibre source were soon proved wrong and, by the 1960s, some species were being intensively used to produce market pulp. Consistent and available in large production volumes, its unique fibre morphology compares well to northern hardwoods and, in some respects, outperforms birch. Excellent opacity, softness and good absorption levels are particularly valuable qualities for manufacturers of tissues and speciality papers. Eucalyptus also has the shortest hardwood fibres available to the market (an average length of 0.65mm). They resist collapse during pulping and offer a low coarseness. A gram of eucalyptus pulp can hold as many as 20 million fibres. The equivalent using US pine is unlikely to have many more than a million. Small wonder, then, that the use of eucalyptus pulp is forecast to grow fastest amongst short-fibre pulps – and that Botnia has chosen to add euca pulp to its product palette. Botnia 1.1:Layout 1 28/1/08 11:05 Page 34

IT Branch

avcor Forest, established in Finland in 1981, has grown into a respected global player in the field of high-tech information systems, thanks largely to its very professional relationship with Sits most valuable asset, the client. 2006 saw Savcor decide to become a key player in the rapidly growing Latin American forestry sector and develop a highly professional team in the region. The Latin American operation is today a fully integrated part of a worldwide team that works in Europe, North America, Asia and Australasia. Savcor Forest has contributed to the management of large- scale forest plantations at many of the world’s most efficient and productive sites. The Fray Bentos mill in Uruguay will demand close to 3.5 million cubic metres of round wood annually. To meet demand, Botnia’s forest management team is prepared to overview an area of more than 150,000 forested hectares, including third party owned forests. Such operational scale

SAVCOR FOREST SAVCOR demands modern and well-designed forest management systems to monitor and control costs and operations properly and to guarantee efficiency, quality and the timely meeting of its industrial 34 needs. Savcor Forest Management solutions are ideally suited to the requirements set by Botnia. These solutions have been designed to maintain diversity and have already been field-tested by some of the world’s largest forest companies. Savcor has set a high standard in forest consulting and IT systems. Savcor Forest Management experts, internally and in close partnership with renowned academic and research institutions, have developed a comprehensive and flexible set of solutions. The systems are modular and focused on providing efficient integration with corporative databases (including SAP and large-scale Oracle and MS SQL installations). Savcor Forest works on consulting, development and the implementation of IT solutions covering the entire forest supply chain and related industries. Its system analysts, foresters and programmers, trained on the most modern management and programming techniques, are among the best in the market, combining exclusive experience in forest sector solutions and the capacity to deliver comprehensive solutions to the industry.

The company has more than 20 years’ expertise in leading systems, development and implementation of advanced forest industry solutions, with particular expertise in:

• Architectural design of forest databases • Application of forest inventory techniques and equipment • Forest planning and management • Harvest scheduling • Transportation scheduling and planning • Performance assessment and management • Processing of data produced by research, soil and climate assessments • Mill receiving and stock handling • ERP solutions for the mechanical wood sector • Consulting and solutions for information management in companies that have natural resources as the basis of their business • Development of planning and forest data management systems, modernisation of IT, modelling the logic structure of forest management systems’ data banks and qualifying human resources to use these systems • Organising training programs involving relational techniques and information organisation Botnia 1.1:Layout 1 28/1/08 11:05 Page 35

Savcor Forest’s high-tech information technology systems enable Botnia and its many other forestry clients to monitor plantations and to control costs and operations efficiently SAVCOR FOREST SAVCOR 35

Savcor Forest maintains several comprehensive system packages, including:

1. Forest MIS (management information system), which stores and monitors information in an integrated and efficient manner 2. Forest DSS (decision support system), which supports the decision-making process, based on modern mathematical optimisation techniques that look for maximum economic performance for the forestry enterprise 3. Forest KMS (knowledge management system), a process management tool based on key performance indicators (KPIs). With this package information management systems become knowledge management systems and forest managers feel more in control than ever 4. Savcor Timber (a mill receiving solution), which covers all aspects of raw material procurement and handling for the mechanical wood, pulp and bio-energy sectors 5. Savcor ERP, for the mechanical wood industry and wood purchasing operations, which covers: Customer Relationship Management, Supply Chain Management and Supply Chain Planning and Management

Savcor Forest systems turn scattered data into consistent, contexualised information that is both useful and readily available. In Latin America, close to two million hectares of eucalyptus and pine plantations are managed with the help of Savcor systems. Similarly, Savcor provides solutions to many major players in Scandinavia, Central Europe, the UK and Ireland, and uses its accumulated knowledge of these regions to provide the best possible solutions for clients on a global scale.

Visit the Savcor website for further information and the relevant contact details: www.savcor.com Botnia 1.1:Layout 1 28/1/08 11:05 Page 36

Life at the Cutting-edge

ree felling used to be a long, tiring and often dangerous occupation. Today, operators using the right machines can fell, delimb, debark and buck a mature eucalyptus tree in less than a Tminute, without leaving the comfort and safety of their technology-laden cabins. The search for the right machines invariably leads people to John Deere Forestry, whose harvesters, forwarders, swing machines, feller bunchers, skidders and knuckleboom loaders represent the fastest, safest and least environmentally intrusive forest machinery on the market. The mix of high productivity and low operating costs is a signature feature of the John Deere brand. John Deere Forestry (previously Timberjack) has built a strong presence in Uruguay over the last 25 years, in partnership with its Uruguayan dealer Roman S.A. It was a lot different at first, more than 10 years before the inflow of international forestry companies established tree farming operations

JOHN DEERE FORESTRY here. But then John Deere is well used to the role of trailblazer. Demand has since surged for mechanised harvesting equipment. John Deere and Roman are prepared to meet this demand – and 36 to surpass expectations. The founders of Roman S.A. have a long forestry background. This family-owned business has been planting trees, logging, saw milling and managing forests for four generations, an activity that continues today as a small-scale family concern. The 50,000 hectares of eucalyptus and pine that forestry companies were planting every year gave shareholders confidence that the fast growth of mechanised logging activity could sustain a successful parallel business. 1997 saw Roman establish a close relationship with Forestal Oriental,which was then trialling mechanised logging, using three Timberjack harvesters and three Timberjack forwarders. FOSA transferred its maintenance activities to Roman in March 1998, starting the first contractual relationship between machine supplier and customer operator. The relationship covered just six machines and one front; it has since evolved to cover a four front, 40 plus machine operation that works seven days a week, 360 days a year. Botnia 1.1:Layout 1 28/1/08 11:05 Page 37 JOHN DEERE FORESTRY 37 Above: a John Deere Forestry harvester Roman devotes 40 employees to maintain the fleet of harvesters, harvester heads and makes short work of a mature eucalyptus forwarders. Other clients have since signed up to the Roman service and rely on John Deere machines stand at one of Forestal Oriental’s to get the job done. Roman’s footprint now encompasses close to 100 units, in all models, sizes and plantations. Opposite page: a forwarder collects logs ready for transport to the mill; configurations; the workforce has risen to more than 60 people, including engineers, administrators, CRECER simulator technology develops technicians, mechanics and clerks, supported by a 20 vehicle specialised service fleet. A substantial operator skills prior to field training static workshop area and large spare parts depot are also in service, while four mobile workshops enable Roman to carry out repair and maintenance activities close to the actual logging location.

A second evolution took place in 2005, as Roman set up CRECER Capacitacion Forestal, a training centre for future forestry operators, maintenance technicians and supervisors. John Deere and such clients as Forestal Oriental believed in the project and helped make the venture possible. Three full- time and two part-time instructors run a variety of training programs, including:

• Advanced hydraulics: processor heads • Environmental sciences: the impact of harvesting on the environment • Safety: mechanised harvesting • Advanced troubleshooting for maintenance technicians • Software applications: harvesters, forwarders, skidders and feller bunchers

Simulator technology allows instructors to monitor the evolution of student performance closely. It’s also a useful tool for students and enables them to become familiar with controls and movements before they take field training, improves safety and cuts the necessary period of onboard training. John Deere Forestry and Roman are undisputed market leaders in the provision of purpose-built forestry machines in Uruguay. The latter believes that mechanised logging is only just beginning in the country and that further expansion is inevitable. Many brands will compete and share in this expansion; only those that consistently supply the best products and the best customer service will survive in the long run. The John Deere Forestry/Roman S.A. partnership intends to be one of them.

Those in search of John Deere Forestry products in Uruguay should contact Roman S.A. in Montevideo on +598 2 307 73 45. The (Spanish language) website is www.roman.com.uy and the international John Deere website is www.deere.com Botnia 1.1:Layout 1 28/1/08 11:05 Page 38

A Logger’s Best Friend

hey say friends are for life. In the case of Ponsse, ‘a logger’s best friend’, it’s probably true. Forestry companies that buy a piece of equipment from this world leader in cut-to-length Tmechanised logging technology can rely not only on its productivity and accuracy, but also on its durability and extremely long service life. The Finnish forest machine entrepreneur Einari Vidgrén established Ponsse Oyj in 1970 and the company has been a pioneer of cut-to-length timber harvesting solutions ever since. Ponsse Latin America, the division that supplies machinery to Forestal Oriental and other forest businesses in such countries as Uruguay, Brazil and Chile, is headquartered in Mogi das Cruzes, São Paulo, Brazil. Latin American operations range from sales and service to production, R&D and training. The Mogi das Cruzes plant focuses on the assembly of harvester heads developed specifically for Euca products.

PONSSE Ponsse’s sales and support capabilities in Uruguay operate from Paysandú. “The demand for cut-to-length method forest machines is growing,” says Arto Tiitinen, Ponsse’s 38 President and CEO. “We will continue the development of our sales and maintenance service network in Latin America, one of the key growth areas of our business. We want to operate close to our customers and are committed to offering them comprehensive solutions. In this way, the customer gets the forest machines that fit their needs, as well as lifetime support for their equipment.” Botnia 1.1:Layout 1 28/1/08 11:05 Page 39

Above: the Ponsse Elephant 18-ton The Product Range forwarder, which offers customers an To achieve the best wood productivity, Ponsse believes, forestry enterprises need versatile and attractive mix of size, speed and transport efficiency, is particularly capable on rough efficient machinery. That’s why the company has built a full range of cut-to-length forest machines terrain. Above right: an efficient Ponsse and expertise in all aspects of wood harvesting. Its harvesters, for example, are suitable for every type harvester hard at work of operation, from initial thinning through to heavy regeneration felling. The Ponsse Bear harvester offers heavy class timber harvesting with superior force and performance, a result of the unmatched new Ponsse H8 harvester head and the most powerful Ponsse crane yet to be manufactured, the Ponsse C55 parallel crane. Thanks to its usability and reliability, the new Ponsse Bear exceeds all demands on a first-class harvester. Ponsse Ergo, an established forerunner, is now an even more efficient and productive harvester. The new C4 crane, H7 harvester head and general improvements to the machine, together with the PONSSE new Opti4G 4.602 version and the new generation control modules, make this the most advanced harvester in its size class. The smallest model, Beaver, is a real power pack. It can handle many 39 different harvesting jobs, from the densest improvement thinning to the heaviest final felling. Ponsse’s unique patented active suspension system effectively eliminates vibration and the effects of uneven terrain, keeping the cabin in a vertical position and enabling faster forest driving and only minimal results from low-frequency swings. This, the very latest in forest machine technology, represents a professional working environment for those who appreciate unbeatable convenience, safety and ergonomic design. All Ponsse forwarder models have ample power for varying conditions and the most challenging terrain. The very favourable net weight to load bearing capacity ratio, the smallest turning radius in its size class and dimensions that spread the weight evenly over the wheels, are hard to beat. The new Ponsse Elephant 18-ton forwarder offers hitherto unobtainable size, speed and transport efficiency. The tractive force and torque of this powerhouse have been designed for extreme demands and conditions. Its superior performance can be best seen on steep slopes, deep snow and soft terrain. Its moveable 6.25 square metre (67.3 square foot) bunk, efficient drive transmission and powerful crane ensure loads will be transported to the roadside quickly and efficiently, regardless of site conditions. The hydraulic system operates the Ponsse Elephant’s fast and flexible crane. Able to carry nearly its own weight in wood, the 18-ton BuffaloKing offers its operator a luxurious cab, the powerful Ponsse K100 loader, ample load space, a powerful Mercedes-Benz engine and a sturdy structure ready for the most demanding wood harvesting conditions. Other forwarding models are Buffalo (14 ton), Elk (13 ton), Wisent (12 ton) and Gazelle (10 ton). Ponsse Dual is an ideal choice for those who want to have both harvester and forwarder in the same package. Dual machines are eminently suitable for logging sites with a small surface area or small logging volume, where two machine teams would be unnecessarily bulky and their transport costs too expensive. The Dual is ideal for many other uses and sites. Imagination is the only limit. Finally, the Ponsse harvester head collection covers all harvesting needs, from fuel wood harvesting through to heavy-duty regeneration cutting. Productivity and measurement accuracy are particularly impressive; durability and long service life are typical of all Ponsse models.

Discover the machinery, capabilities and services that Ponsse Latin America offers its customers by calling the São Paulo, Brazil, office on +55 11 4728 5431, or by visiting the Group’s comprehensive international website: www.ponsse.com Botnia 1.1:Layout 1 28/1/08 11:05 Page 40 DEVELOPMENT

40 Botnia 1.1:Layout 1 28/1/08 11:05 Page 41

CHAPTER 05 It’s a Go!

f you were in Uruguay in early March 2005 you must have heard the big news. A day after Botnia confirmed its investment at press events in Montevideo, Fray Bentos and Helsinki (Finland), it Imade the nation’s headlines: ‘Botnia aprobó inversión de US$1.100 milliones para Uruguay’, El País declared. La República went with ‘ US$1.100 milliones invertirá Botnia en la construcción de su planta de celulosa’. Pre-engineering was complete, DINAMA had approved the environmental permit, Ronald Beare was MD and the people of Fray Bentos were enthusiastically supportive. The pieces were falling nicely into place. Back in Helsinki, Erkki Varis had two important things to say. Botnia’s President and CEO spoke of raw materials: “This pulp mill investment is strategically important for our owners’ raw material supply. UPM and M-real already use large quantities of eucalyptus pulp, and their current investments will increase the need for this pulp. For Botnia this is an important step as we are DEVELOPMENT extending our operations to the use of a new raw material – eucalyptus.” Then there was the Uruguayan–Finnish partnership: 41

The plant at Fray Bentos will be a Uruguayan mill, operated by a skilled team of Uruguayans, but in the course of the project, many of our Finnish experts will have the opportunity to apply and develop their skills in a new international environment, too.

Now came the question of finance. Botnia’s management predicted that it would take approximately The early stages of construction at the mill. US$1.1 billion to complete the mill and associated infrastructure. Reaching this daunting total meant Once the fencing and land clearance mixing a large amount of capital investment from Botnia S.A. shareholders with a variety of external activities are complete, the massive site is levelled before the building foundations loans. As subsequent events were to prove, accessing sections of this latter investment source would can be excavated prove to be far from straightforward. Botnia 1.1:Layout 1 28/1/08 11:05 Page 42

In the meantime, though, Botnia had cherry-picked its virgin site next to the fast-flowing Río Meet the CM Team. From left to right: Timo Uruguay. Officially, it’s ‘Plot Nº 1569 of the 1st Judicial District of the Province of Río Negro’. Until Piilonen (Project Leader); Ronald Beare (MD of Botnia S.A.); Jorge Kliche (Engineering early 2005 this was an undistinguished 500-hectare patch of scrub pastureland fronting the river, Manager) with Pekka Salomaa (Civil Works 1.5 kilometres south of the San Martín International Bridge. Critically, it offered a relatively secluded and Site Management); Sami Saarela (Mill location, out of sight from most of the coastal recreation areas in the vicinity. Fencing the site, one Manager). Below: Jukka Sainiemi (Project of the very first tasks, handed Plot Nº 1569 sudden celebrity status and when the convoy of heavy Director, Andritz) trucks and bulldozers belonging to Botnia’s land clearance and excavation contractors noisily entered the site in April its fame was sealed.

DEVELOPMENT People, Process, Partnership The Construction Management (CM) team came together in early May. Notable appointments 42 included Timo Piilonen (Project Leader), Pekka Salomaa (overseeing Civil Works and Site Management), Sami Saarela (former manager of the Kemi Mill, appointed as Mill Manager) and Jorge Kliche (Engineering Manager). Together, the 30 strong team was handed a tough challenge with a tight deadline: assemble detailed engineering and construction plans as soon as you can and make contact with all of the required suppliers. Some task! Construction projects are so often defined by the core principles a CM team sets out before works begin, and Botnia’s was no different. Still, the team worked fast and decided: (1) to source proven ECF (Elemental Chlorine-free) technologies to ensure minimal environmental emissions, cost-effective production and, last but not least, high quality market pulp; (2) to bring in Lemcon Ltd to oversee the construction process; and (3) to break the work up into more than 100 contract packages, making it easier for local contractors to participate in the bidding process. Less than three weeks later, Botnia made a key technological partnership. Austria’s Andritz Group, a market-leading manufacturer of pulp and paper process equipment, would provide the fibre line, from wood handling to pulp drying, as well as a chemicals recovery system. A long- standing partner of Botnia – its production systems went into Botnia’s very first greenfield mill (Kaskinen) and are now at work in all five Finnish facilities – Andritz was at home in Latin America. Veracel, Aracruz and VCP in Brazil and CMPC and Arauco in Chile all use Andritz technology. So it was a natural partnership. But the mill’s South American location was a cause for concern for those planning the operation. Uruguay, after all, had almost no experience of producing paper pulp and neither Botnia nor Andritz had a previous Uruguayan project in their respective portfolios. It’s never easy to predict the risk factors when a company moves outside its normal operational geography and it’s almost impossible to come up with a contingency figure that will mitigate against unknown risks. So Botnia and Andritz chose to go for an ‘open book’ approach. They pooled their available resources to finance those parts of the project that fell outside their ‘core project business’. Neither carried sole responsibility for general contingencies. “There are clear benefits to this approach,” says Jukka Sainiemi, Andritz Project Director who coordinated the company’s on-site activities. “The ‘open book’ method gives us greater flexibility, an increase in purchasing economies of scale, mill-wide optimisation (design, layout, standardisation) a common site organisation and mutual incentives for a win-win business relationship.” In all, about 45 per cent of Andritz’s purchases were made directly with manufacturers and suppliers, and 55 per cent through open book contracts. Botnia 1.1:Layout 1 28/1/08 11:05 Page 43

Others were soon on board. Honeywell would provide the automation system, it was announced in July; Kemira and Alstom joined the project in October, as the suppliers of chemicals and air pollution control systems respectively. Now the race was on to identify the exact technologies and equipment that would be used at the mill, to detail the process environment in its entirety, so protective structures could be designed and erected by the time the first machines arrived in 2006. In Sami Saarela’s words, there were other specific objectives:

We don’t aim to stockpile parts. As far as possible they will be installed as they arrive. To make the project more straightforward the planners are trying to raise prefabrication to a much higher level than normal. As local labour with the requisite skills is in short supply, mill parts will be manufactured as completely as possible before they are shipped. DEVELOPMENT

A recruitment office opened before works began to receive and sort through job applications – a 43 steady line of job seekers gathered patiently outside the office each morning and more than 5,200 applications were soon filed – while Botnia S.A. began sending out weekly press releases to the local media every Friday. The company was careful to maintain close contact with the media throughout the construction project and, today, remains keen to disseminate information to interested parties and news organisations. There was a lot to say. Botnians and their associates are evidently fast workers and, by the third quarter of 2005, work was well underway at the port terminal and at the main mill site, where excavations had already delineated a set of super-sized foundations that would eventually underpin the mammoth fibre line and recovery island.

Sudden Impact It was vital to secure formal arrangements with a selection of international banks, to finance the ongoing construction process. At the top of the list was the International Finance Corporation (IFC), the much respected private sector division of the World Bank that nurtures private sector investments in developing nations. Botnia handed over its EIA and Socio-economic Study to IFC – plus further bank assessments that Pöyry and specialists from the Multilateral Investment Guarantee Agency (MIGA) conducted in early 2005 – sat back and awaited a positive decision. That decision, it turned out, would take more than a year to arrive. From the outset, IFC declared its interest in underwriting Botnia’s new Uruguayan pulp mill venture. As a brand-new major commercial initiative set to be located in an impoverished region of South America, it was just the kind of project the corporation tends to support. On its website the organisation says:

This project represents the largest foreign investment in Uruguay’s history and will establish the country as one of the world’s major pulp exporters. Moreover, this project fits in with the World Bank’s long-term strategy for the development of Uruguay, which recommends investments in forestry and in the diversification of the country’s export base to increase its competitiveness globally.

But it had a single, serious concern. A storm of protest had gathered on the Argentinean side of the Río Uruguay and, on 30 April, between 10,000 and 20,000 Argentineans had blockaded the San Botnia 1.1:Layout 1 28/1/08 11:05 Page 44

Martín International Bridge in protest against the mill. Above all, IFC needed to be absolutely sure about the project before it green lighted a proposed multimillion dollar loan. It needed a new independent analysis. It wasn’t exactly the news that Botnia wanted to hear – delays in the availability of project financing never are – but the company was more than willing to accept IFC’s decision, as Ronald Beare recounts: “IFC’s Cumulative Impact Study (CIS) went even further in its scope than any of the previous studies. We knew in our hearts that the technologies would work, that there wouldn’t be any harmful environmental emissions, so we weren’t worried about the scientific outcome. We just hoped that the CIS would clear up any doubts about the project. In a way, then, IFC’s decision was a big step forward.”

DEVELOPMENT The new study set out to address more than 30 issues surrounding two proposed Kraft pulp mills – Botnia’s Fray Bentos facility plus the ‘Celulosas de M'Bopicua’ (CMB) project, which the Spanish 44 pulp business ENCE was then planning to construct six kilometres upriver. Social and economic issues, air quality, water quality and biodiversity concerns took priority, with detailed computer modelling used to predict air quality and water emissions and interviews held with local residents to measure opinion and identify concerns.

One Step Forward… Offered up to the public on 19 December, the first draft was well in line with Botnia’s earlier EIA. It recognised the proposed technologies as Best Available Techniques (BAT), as defined by the European Union’s Directive on Integrated Pollution Prevention and Control. Occasional odours aside, it maintained, air and water quality should suffer no adverse affects, while the eucalyptus plantations would grow harmoniously alongside natural habitats and pastures. Finally, thanks to its relatively secluded location upriver from the Río Uruguay’s established tourist resorts, visitor numbers to the region should not dwindle over the long term. In all, three significant cumulative impacts were identified in the report: ‘1) the influx of construction labour (localised and negative); 2) an increase in road traffic (localised and negative); and, 3) direct and indirect economic benefits (local/regional/national and positive).’ It was more of a starting point than an end result, of course. 19 December inaugurated a 60-day consultation period in which local residents and regional stakeholders were encouraged to ask questions and offer feedback. Montevideo, Fray Bentos, Buenos Aires hosted a public meeting and review session in January or February 2006. Each was designed to be, in the words of one IFC representative, ‘an open space to listen to opinions, concerns, consultations and doubts’. But some attending NGOs, it seemed, had little interest in discussion. They just wanted to wipe the proposed pulp mills off the map. Let’s take the Montevideo meeting as an example. The setting: a packed Torre de los Profesionales, 14 February 2006. The attendees: representatives from banks (IFC, MIGA), local government (Fray Bentos, Río Negro), the companies (Botnia, ENCE), independent specialists, NGOs (Movement for Life, Work and Sustainable Development of Fray Bentos (MOVIDES), the Uruguayan Network of Environmental NGOs), and several local people. It started well enough. Facilitator Carlos Ibañez led the group through the bleaching process, odour, air and water quality, the inflow of Late afternoon on site as the sun sets on workers, tourism and the impact of eucalyptus plantations. Comments and worries, faithfully the construction of Botnia’s 120-metre-high recorded during the Q&A, would be taken into account in the final CIS. So far so good. chimneystack Botnia 1.1:Layout 1 28/1/08 11:05 Page 45 DEVELOPMENT 45 Botnia 1.1:Layout 1 28/1/08 11:05 Page 46 DEVELOPMENT

46 Then Luis Castrillón, representing MOVIDES, took the mike. Reading from a prepared statement, One of the biggest challenges for Botnia he announced: “We express today our full rejection of the draft cumulative impact report submitted was sourcing sufficient volumes of pre-cast concrete from the Fray Bentos region. To by the World Bank, because it’s only a recycling and makeover of the companies’ environmental ensure supply, a concrete production facility impact studies.” Arguing that the meetings were leading nowhere, he railed against all of the was set up at the site “accomplices in the realisation of these death factories” and soon after left the room. Río Negro’s Governor Omar Lafluf said what everyone must have been thinking: it was a real disappointment. But why was MOVIDES so angry? Perhaps, as independent environmental quality and assessment specialist Luis Anastasía perceptively noted, it was mostly an issue of clarity. The report was ‘written by technicians and for technicians’:

So what happens? There is this type of lack of understanding, this type of fear in people, when you hear talking about mercaptans or methyl sulphide or hydrogen sulphide or dioxins and, as it is written in the report, I think I kind of understand the fear of people who are not aware of the issue.

The final CIS, in other words, would need to try even harder to get the message across to NGOs and communities over the border in Argentina. The IFC’s next step – calling in independent Canadian specialists Hatfield Consultants Ltd to review results – would make sure that all issues were covered objectively. Still, the first draft gave Botnia heart and work pressed ahead. Managers and engineers were recruited at the end of 2005; excavation was completed in March 2006. A million cubic metres of soil had been removed and soon a vast steel structure materialised, the recovery boiler in skeletal form, next to the 120-metre-high chimneystack. Next came pipe bridges and mechanical and electrical installation for the cooking and bleaching plant and recovery boiler. Botnia had taken giant steps in the 12 months following the ‘it’s a go!’ decision. The site was excavated and civil works were on track; leading manufacturers of ECF processing equipment had been contracted to supply key machinery; a firm commitment to BAT underlined every aspect of its operations; and the company had fostered a strong spirit of partnership with Fray Bentos, Río Negro and the whole of Uruguay. Even the best designed projects – and this was one of them – never run completely smoothly. With the best will in the world things will inevitably confound project managers. As Botnia was about to find out, the storm clouds of environmental protest had suddenly gathered overhead. Botnia 1.1:Layout 1 28/1/08 11:05 Page 47

CHAPTER 06 La Batalla del Papel

ontevideo’s El País gives the people of Uruguay a running commentary on what it calls ‘La Batalla del Papel’, the ‘Battle of Paper’. We’re stopping over at the Lafayette Hotel MMontevideo before heading out to the mill site. Reception has the 19 May 2007 edition, so we turn to the national section and the unfolding story. ‘URUGUAY ANALIZA INSTALAR “BARRERA VERDE” EN BOTNIA.’ Tabaré Vázquez’s Government, we discover, might plant a ‘green barrier’, a forest wall, to screen the mill and stem the charge of visual pollution. It’s the latest development in a long line of sensational twists. The stakes are high. But how did this project, publicly committed to environmental responsibility, become the focus of such negative attention? Opposition to the proposed pulp mills has centred on the eastern Argentinean town of Gualeguaychú (population 80,000), situated in the Entre Ríos region, 27 kilometres west of Fray Bentos. Like its Uruguayan neighbour, food processing has long dominated the economy here. Still, CONSTRUCTION you’re far more likely to come across flocks of tourists than herds of cattle in Gualeguaychú today, unwinding at the river resorts of the Río Uruguay and Río Gualeguaychú or joining revellers at the 47 nationally famous Carnaval del País. Locals worry that the mill will belch smoke into the skies, pollute the waters, kill fish and marine life, and spook tourists away. “This community is fuelled by tourism from [the] Carnival and people coming to the beaches,” one resident says. “They won’t keep coming if there is a papelera [pulp mill] next door. If the papelera is built, in 10 years Gualeguaychú will be a ghost town.” It’s a natural concern. This Argentinean tourist town relies on it carnival to bring in tourists. So it was not likely that the people of Gualeguaychú would welcome a large industrial development on their horizon. More to the point, Argentina’s pulp and paper industry, whose outdated production methods tainted Botnia’s project from the start, set a chilling precedent. Almost a dozen mills operate on the Río Paraná, which joins the Río Uruguay south of Fray Bentos to form the Río de la Plata estuary. The Paraná is now seriously polluted. Scientific analysis has revealed the presence of many toxic persistent pollutants linked to the use of elemental chlorine in the old-fashioned pulp production process. With the ENCE mill at the advanced planning stage and Botnia not far behind, local residents set up the Citizens’ Environmental Assembly of Gualeguaychú (CEAG) in 2002 to prevent such a tragedy from happening much closer to home. Five years later and Botnia has not been able to convince CEAG that pulp processing technologies have moved on, that the Fray Bentos mill is environmentally benign. Independent scientists and analysts have failed to shift entrenched opinion. ‘No a las papeleras, si a la vida’, CEAG maintains: ‘no to pulp mills, yes to life’. Who do you believe? It’s the key issue that has long dominated the Botnia debate in Latin America. Professional studies give Botnia’s mill a clean bill of health; independent experts recognise its technologies as BAT; the body of evidence is undeniable. But this is a confounding dispute – often, it seems, contrary to logic. Despite the evidence, many Argentineans regard Botnia as a treacherous foreign aggressor. Entre Ríos Governor Jorge Busti once said: “These companies that nobody wants in Europe just want to come to the Third World and use us as their guinea pig. People here recognise this, and are very strongly mobilised against it.” Is this really, as CEAG and its supportive NGOs have claimed, a struggle between third world peoples and imperialistic multinationals? Or could it be that CEAG, some NGOs and a few Argentine officials have relied on the emotive power of colonialism and the environment to mask a simpler fear – that ‘visual pollution’ from across the river would spoil previously unblemished views and slow

Río Negro Tourism/Ricardo Giusti Río Negro Tourism/Ricardo Gualeguaychú’s tourism lifeblood? Botnia 1.1:Layout 1 28/1/08 11:06 Page 48

Warring Neighbours It began in earnest on 30 April 2005, with the blockade of Route 136 and the San Martín International Bridge, and quickly escalated. Late 2005 saw Argentinean customs officials hold up a steel parts delivery intended for the mill and 500 people demonstrate outside the Finnish Embassy in Buenos Aires. Tourists from Argentina represent around 80 per cent of foreign visitors to Uruguay during the summer season, and most Argentinean visitors arrive by land, crossing the bridge on Route 136. The December roadblock, coinciding with the start of the high season, brought the normally bustling road to an abrupt standstill. Angry and frustrated, Uruguay’s Government accused Argentina of violating the Mercosur Regional Trade Agreement (RTA) on the free circulation of goods. Argentina hit back. It argued that Uruguay had violated the 1975 bilateral Río Uruguay Treaty when it approved the mill without Argentinean consent. On 25 January 2006 Argentina took the issue to the UN’s International Court of Justice in The Hague, while, five days later, the joint Argentinean–Uruguayan commission Grupo Técnico de Alto Nivel (GTAN) studying the impact of pulp mills broke up in acrimony. Things were getting ugly. It was business as usual at the mill site. The foundations were completed by March and 1,500 people were on site helping to erect the steel building frames. Outside, though, controversy raged. A long-term blockade (3 February to 22 March) gave Uruguay a huge financial headache. Now, 42 per cent of Uruguayans wanted their Government to be more assertive with Argentina, according to a MORI Uruguay poll. Four in five people fully supported the mill. Informal talks between Uruguay’s Tabaré Vázquez and Néstor Kirchner of Argentina were getting nowhere. With no end in sight, Botnia attempted to facilitate negotiations by suspending works on site between 7 and 18 April. It was all for nothing. The 30 April 2006 bridge protest eclipsed its predecessor in sheer numbers, Argentina formally presented its case at The Hague on 3 May and

when Kirchner and his entire cabinet joined anti-mill protesters the battle lines were drawn. Other sides of the story. Uruguayans gather In the meantime, though, IFC-appointed Hatfield Consultants had worked through the in Fray Bentos to protest against Argentine provisional Cumulative Impact Study and recommended further studies to identify every possible road blockages; Botnia’s workers’ housing, effect of the mill’s operation. IFC and Botnia agreed. Here’s Erkki Varis: set up in and around Fray Bentos to accommodate the huge construction team throughout the lengthy build period. These Botnia has always been a leader in environmental matters. We take a positive view of the houses will be donated to the community proposals made by the experts employed by IFC regarding additional studies of the after the mill construction period

CONSTRUCTION environmental impacts of the pulp mills. We are ready to provide all necessary information to assure all interested parties that Botnia will employ the best available technique in its mill 48 in Uruguay.

Botnia moved fast in the six months it took to complete the additional studies, buoyed by the International Court of Justice’s refusal to halt construction at the mill site. In the third quarter of 2006 the company trained 1,000 local welders and built 200 houses and 140 temporary dwellings in partnership with local authorities and builders. On site, work began on the water treatment plant, effluent treatment plant and power distribution network. Construction gained momentum. Still Botnia proactively tackled the wider social and environmental debate. Its open letter to the Center for Human Rights and Environment (CEDHA) and other NGOs, dated 17 June, invited all interested parties to visit its Joutseno mill in Finland to see first hand how clean the Fray Bentos facility would be. It had been very difficult to get the truth out to communities in nearby areas, Botnia admitted, and ‘CEDHA and other non-governmental organisations are in a key position, first to understand that the accusations are false and second, to correct the misinformation that has been circulated.’ CEDHA declined the offer.

Botnia has since strengthened its communications team in Uruguay to disseminate its message Río Negro Tourism to a wider Latin American audience, but the response from CEAG, CEDHA and Gualeguaychú has become increasingly combative. Despite offers of international mediation by King Juan Carlos of Spain, picketers have upped the ante, setting up blockades without warning and proposing more direct protests in the future. Botnia, meanwhile, continues to hope that the dispute can be resolved amicably. The company has done everything it can think of to reduce environmental impact – not only at the mill, but also in the wider region. The company has offered to treat municipal sewage from Fray Bentos in its effluent treatment plant and burn black liquor from the PAMER pulp mill in nearby Mercedes in its recovery boiler. Taken together, these measures will actually improve the river’s water quality from its present state. Yet, as this book goes to print, the ill will continues.

CIS and Tell On 12 October 2006 IFC and MIGA released the eagerly anticipated final Cumulative Impact Study, carried out by EcoMetrix Incorporated. It presented a complete environmental, social and commercial appraisal (excluding annexes, it ran to 221 pages). It’s a comprehensive redo of the original CIS, but those who made it through the study should have felt reassured that the planned mill would not Botnia 1.1:Layout 1 28/1/08 11:06 Page 49

Looking over Fray Bentos towards the Quote Unquote Botnia pulp mill, with the Libertador “Botnia’s way of doing business is typical of Finnish business: it is straightforward, open and General San Martín International Bridge in the distance transparent. This is a perfect fit for the Uruguayan business climate.” Ronald Beare, Managing Director, Botnia S.A.

“IFC’s decision in November 2006 to approve the proposed US$170 million loan was undoubtedly an important milestone in the project’s financing. We hope that the Cumulative Impact Study and independent experts’ statements will help to clarify the misinformation and related concerns about the investment. We are confident that once the mill starts operations, it will clearly underline our commitment to sustainable operations in practice.” Ville Jaakonsalo, Finance Director, Botnia CONSTRUCTION

“Building a plant is not just pure technology, but really much something else. We have been faced 49 with many different challenges and I am terribly proud of the team spirit and cooperation that has characterised the entire project. We delivered what we promised.” Timo Piilonen, Project Manager, Botnia S.A.

“I know that if I go across the river to Gualeguaychú, I would sense bad feelings toward me because I'm Uruguayan. But we really need the jobs here. If these factories don't open, Fray Bentos will disappear.” Fray Bentos Resident

“If the Botnia Foundation succeeds in promoting opportunities for employment within its sphere of influence, we can avoid migration and improve the living conditions and welfare of the people in their home districts.” Roberto Symonds, Independent Board Member, Botnia Foundation

“The Uruguayans are worried about their tourist season, but they do not understand that the factories will ruin all seasons for us.” Daniel Irigoyen, Mayor of Gualeguaychú

“If these mills [Botnia and ENCE] go ahead, it’ll be the end for us. Who wants to sit on a beach and have two gigantic mills to look at?” Gualeguaychú Resident

“Botnia and the IFC failed to follow their own rules, and were completely insensitive to local opinion – they are to blame for this conflict.” Jorge Daniel Taillant, Center for Human Rights and Environment (CEDHA)

“Argentina is completely wrong in their assertion of ‘irreparable environmental damage’. The mill will be the most technically advanced in the world with inconsequential impacts.” Dr. Wayne Dwernychuk, Hatfield Consultants Botnia 1.1:Layout 1 28/1/08 11:06 Page 50 CONSTRUCTION

compromise the environment and that its varied socio-economic and employment impacts would be Snapshots of construction. A broad significantly positive. Here are a few key snippets: spectrum of skills and training was needed to achieve the project. One Andritz manager described the ‘melting pot’ of The BEKP [bleached eucalyptus kraft pulp] mills proposed by Botnia-Orion and ENCE-CMB are nationalities working together on site as “a considered by the CIS project team to be IPPC-BAT (2001) or better. … Odour will not be miniature United Nations” detected during normal mill operations … The cumulative assessment of water quality in the Río Uruguay indicates that no water quality standards or guidelines will be exceeded as a result of the discharge of effluents from the two mills. … The cumulative impacts of the two projects on the national and regional economy and on employment are likely to be significant in terms of economic performance, employment, balance of trade and tax revenue.

In the words of Ville Jaakonsalo, Botnia’s Finance Director, this was the world’s “most scrutinised investment”. It was also fully vindicated. All involved with the Fray Bentos mill project awaited the news that IFC and MIGA would approve the investment and provide the accompanying guarantees. It came through on 21 November 2006. The two organisations, ‘after completing a thorough review Botnia 1.1:Layout 1 28/1/08 11:06 Page 51 CONSTRUCTION 51 Botnia 1.1:Layout 1 4/2/08 11:29 Page 52 CONSTRUCTION

52 Botnia 1.1:Layout 1 4/2/08 11:29 Page 53 CONSTRUCTION 53 Botnia 1.1:Layout 1 28/1/08 11:06 Page 54

Huge strides were made during 2007. Left: construction work comes to an end at the recovery boiler in May 2007. Below: inside the facility; engineers carefully monitor the mill’s start up. Opposite: looking down over the now fully functional Botnia mill CONSTRUCTION

54 Botnia 1.1:Layout 1 28/1/08 11:06 Page 55

of the facts, are convinced that the mill will generate significant economic benefits for Uruguay and cause no environmental harm’, approved a US$170 million investment and a US$350 million guarantee. Botnia was in business.

Back to Business Construction stepped up a gear in the latter months of 2006. Civil works were ready by November when the first shipments of material for the fibre line arrived. It was high summer, the ideal season for outside construction activity, and the site became a hive of activity. A total of 4,240 workers were on site in December (in May, the peak of construction, the figure rose to 5,300). Individual installation and construction contracts often overlapped, so careful planning, cooperation and a shared CONSTRUCTION understanding were vital if the project was to remain on time and within budget. Work began on the fibre line installation in November and was all but complete by March 2007. 55 Erection teams worked full 10-hour days from Monday to Friday and another eight hours on Saturdays. It was tough, demanding work, especially for the foreign specialists, as temperatures rose to highs of 36°C and flash thunderstorms were so heavy that work often had to be stopped. By March, the team had more than eight million work hours under its belt. Representatives of Botnia and Andritz attended weekly site meetings with the 100 odd contractor teams to make sure that quality, time and safety criteria were consistently met. From the outset it was agreed that the vast majority of construction workers and, later, mill operatives should be Uruguayan. As early as October 2006, prospective mill technicians were flown to Finland for training in pulp production. Most of the on-site contracting teams were locally sourced. Every contractor providing cast in-situ concrete was Uruguayan (Saceem, Teyma, Stiler, Tecsa Uruguay and many more). Local companies participated in general assembly work in all technical areas for which Andritz was responsible – the woodyard, fibre line, pulp drying, evaporation, recovery boiler and white liquor plant. It was, as one Andritz Site Manager put it, like “a miniature United Nations”, as people from 25 countries worked together in the heat of summer to build the massive mill. Nevertheless, 80 per cent of the entire build team came from Uruguay and, at the peak of construction, Fraybentinos represented 1,500 of the 4,500 total workforce. By the end of August 2007 the dust had started to settle on site. Civil works were estimated to be 96 per cent complete and installation 92 per cent. Many milestones were passed. The power network was in and commissioning was underway at the water and effluent treatment plants, fibre line and recovery island. All boilers were in operation and producing steam, woodhandling line 1 was in operation and producing chips and test runs were about to start at the drying plant using purchased pulp. The final touches took place during September and on 1 October, having kept to its initial schedule for a third quarter 2007 start-up, Botnia announced that its plant was ‘technically nearly completed’. Once the Uruguayan authorities passed over its final environmental permit, the mill’s engines could at last be started on 9 November. Faced with immense pressure and beset by significant setbacks in what must have seemed like a very long two and half years, Botnia S.A. can look back with great pride on its achievement. The final result is a testament to the vision and professionalism of the construction team, to the installation capabilities of its technology and civil works partners and to the skills and sheer hard work of the contractors. Here are some of their stories. Botnia 1.1:Layout 1 28/1/08 11:06 Page 56

Engineering Success

öyry was closely involved in the details of engineering work for Botnia’s new pulp mill, from pre-engineering through implementation to on-site assistance. One of the keys to success was Pthe effective cooperation between all of the project parties, combined with a strict organisation and comprehensive scheduling. Pre-engineering work started on the project as early as the autumn of 2003. In the initial phase, the main design data were defined, investment costs were calculated, the mill site layout was developed and enquires were prepared for the purchase of primary process machinery. Extended pre- engineering followed, including continued negotiations with potential main machine suppliers and further planning of the implementation method and mill layout. After comparing alternative implementation methods, Botnia opted for an ‘open book’ concept, where the main machine

PÖYRY PÖYRY supplier took sole responsibility for its own proprietary equipment and assumed joint responsibility with Botnia S.A. for the purchasing of all standard components and services: pumps, piping, erection 56 work and so on.

Smoothly Coordinated Engineering After the necessary authority approvals had been obtained, Pöyry’s engineering work started with full force. Its contracts consisted of engineering for the so-called ‘open book’ items and for ‘Balance of Plant’ (BOP) tasks, to assemble the departments into a complete, functioning Kraft pulp mill. The open book part consisted of piping, electrical and automation engineering for Andritz, including supplementary engineering work related to electrification and HVAC systems. The engineering work was divided between several Pöyry regional offices, including Vantaa (drying machine), Tampere (wood handling), Varkaus (recovery boiler, evaporation) and Kouvola (fibre line, causticising plant). Botnia 1.1:Layout 1 28/1/08 11:06 Page 57 PÖYRY 57 Pöyry created this diagram of how the pulp The entirety of the engineering work was coordinated from Pöyry’s Vantaa office, where mill would look for the 2004 Environmental discipline coordinators checked the consistency of documentation and made sure that designers got Impact Assessment. Although some changes the necessary input information. were subsequently made, many elements of the completed mill can easily be identified

Close Cooperation “Very important for the success of the open book engineering work was our close cooperation with Andritz’s units at Varkaus, Karhula and Graz,” comments Pöyry’s Project Manager, Jyrki Rautkorpi. “In this type of engineering contract, involving three parties, responsibilities must be well defined. Through good cooperation between all parties, the engineering work proceeded very smoothly.” The BOP engineering contract comprised inter-departmental connections, steam distribution systems, compressed air systems and parts of the water treatment system. Pöyry’s Vantaa office carried out the BOP engineering work, which included all of the company’s discipline areas: process, mechanical, piping, electrical, automation and HVAC. Furthermore, Pöyry assisted Botnia with a variety of additional issues, particularly procurement and time scheduling. Responsibility remained clearly and exclusively with Botnia.

Modern Tools For the 3D modelling for the mill Pöyry used the PDMS engineering tool. Botnia will continue to use the mill model in the future, to assist with maintenance planning in the operational mill. Pöyry used its own engineering tool for electrical and automation engineering. ProElina is an engineering and material management system for building and updating the project database, and for producing documents for use during the implementation phase and in the operating mill. “Basically, the open book implementation method is a sensible option when the client needs a partner for spreading the risks. It requires that the work is strictly organised and scheduled, and that the division of responsibilities is clearly defined in contracts,” says Rautkorpi. “In this kind of approach, it is very important for the ultimate client to have main responsibility and authority in relation to the suppliers.” After completion of the detail engineering phase, Pöyry assigned a group of engineers to the site for support during the erection period. Considering the complexity of this major investment project, Botnia 1.1:Layout 1 28/1/08 11:06 Page 58 PÖYRY PÖYRY

Pöyry’s Services at the Fray Bentos Mill • Feasibility study and pre-engineering services • Engineering services for procurement and time scheduling • Detail engineering for Balance of Plant and the main machine supplier (Andritz)

Pöyry at your Service Pöyry is a global consulting and engineering company that focuses on the energy, forestry industry and infrastructure and environment sectors. It’s a global market leader in the forest industry, where it provides engineering and project implementation services for investment projects worldwide, maintenance engineering and local services to the mills and consulting on forest industry strategies and operations. The Forest Industry business group services are divided into four main business areas: management consulting, new investment projects, rebuild projects and local services, and the chemicals industry. Botnia 1.1:Layout 1 28/1/08 11:06 Page 59 PÖYRY 59

the work proceeded well from pre-engineering to implementation and then site assistance. Local construction companies were responsible for the vast majority of construction work, and for electrical and automation installation. Overseas contractors handled most of the mechanical and piping installation tasks.

Engineering Kemira’s Chemical Plants Pöyry also provided engineering, project management, construction management, site services and commissioning services for Kemira’s chemical plants at the mill site. These plants produce sodium chlorate, hydrogen peroxide, chlorine dioxide and oxygen for the pulp mill. Raw materials are procured locally, while the electricity needed to produce the chemicals is bought direct from Botnia.

As the Pöyry website www.poyry.com underlines, this consulting and engineering firm has a truly global footprint. Initial contact can be made through the company’s head office: +358 10 3311 or [email protected] Botnia 1.1:Layout 1 28/1/08 11:35 Page 60

Construction Managers

o keep control over the construction and building works and assure a rapid start of activities, Botnia decided to establish a construction management (CM) team, which would coordinate Tdesign and procurement and manage the necessary construction and building works on site. The vast majority of ‘CM Team’ members came from Lemcon Ltd, from Finland, and its Uruguayan partner CSI. Lemcon, a subsidiary of the Finland-based Lemminkäinen Group, is a specialised company in the field of project/construction management and management contracting. The company has a long and successful involvement in large-scale investment programs in numerous countries and has a 25-year plus track record of projects for the forestry industry. Lemcon has over 1,000 employees.

LEMCON Lemcon and Botnia Botnia’s management approached Lemcon in the spring of 2004 with a request to develop a proposal 60 for construction management services at the Fray Bentos mill project. Since the project requirements were familiar to Lemcon, it was able to supply Botnia with a workable concept by August 2004. Further details and requirements were developed in collaboration and the discussions lead to an agreement in December 2004. According to the main principles of the contract, Lemcon would supply the necessary staff to manage the design coordination, procurement, cost control, time scheduling, site management and site safety for the civil and building works. Overall responsibility for project management remained with Botnia. Since the final scope of the works was not yet defined at the time of closure and the implementation strategy was still to be decided, Botnia asked Lemcon to assess the total involvement, based on its knowledge of similar projects.

Construction Management Off-site Activities Construction Manager Senior Construction Organisation Manager

Lemcon Staff CM Site Manager Design CSI Lemcon Local Partner Coordination

Site Office Site Activities

CIVIL CONTRACTS AND COST CONTROL SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 Wood Handling, Fibre Drying Machine, Power Plant, Turbine, Mill Site Roads, UG Effluent Treatment, Procurement Procurement Line, Water Treatment, Chemical Plant Evaporation, White Pipelines, Gatehouse, Harbour Office Manager Engineer Workshop Liquor Plant Site Services

Contract & Cost Cost Control Section Manager Section Manager Section Manager Section Manager CSI Section Manager Control Manager Engineer

Quantity Surveying Supervisor CSI Supervisor CSI Supervisor CSI Supervisor CSI Supervisor CSI

SCHEDULING AND REPORTING

Project Engineer Project Engineer Scheduling Supervisor Supervisor CSI Supervisor CSI Supervisor UG Pipelines

DESIGN COORDINATION

Design Plotting, Archiving, Coordination Project Support Supervisor CSI Floor Treatment, Steel Doors

HEALTH, SAFETY AND ENVIRONMENT

Safety Manager Safety Engineers Supervisor CSI Cladding, Roofing, Steel Botnia 1.1:Layout 1 28/1/08 11:06 Page 61

Lemcon took full responsibility for many Organisation key areas of project management at the Lemcon engaged CSI Ingenieros Ltda. from Montevideo as a sub consultant, to be able to integrate Fray Bentos site, from project organisation to implementation, cost control, time the necessary local knowledge and experience into the CM Team. While it was agreed that the scheduling and site safety official project language was going to be English, it was clear from the start that efficient and effective communication on a working level required a sufficient knowledge of Spanish. Lemcon assembled its staff in Helsinki in January 2005 and the first expatriates moved to the site in April, to mobilise and start the site preparation works. Because of the strict time schedules, great emphasis was placed on procurement activities to ensure that works started in a timely fashion. The green light to begin construction came in the summer of 2005. At its peak between January 2006 and May 2007, the CM organisation had a staff of 35 people, from four different countries (see the chart on the opposite page). Lemcon and CSI’s overall involvement ended up at around 850 staff LEMCON months between January 2005 and December 2007. 61

Implementation During the initial phase, the majority of the design and design coordination was carried out in Finland. All procurement documents and project plans were developed at Lemcon’s Finnish sites. To secure enough resources for the upcoming construction works, several (potential) suppliers were approached from such countries as Uruguay, Brazil, Chile and Argentina, as well as from Finland and other European countries. Works started in earnest in April 2005 with general earth moving and site levelling in preparation for construction. The first concrete for the ESP building foundations was poured in August 2005, at the start of the actual construction phase. Unfortunately, the side effects of the dispute between Uruguay and Argentina had a direct impact on the implementation process. Supplies from and coming through Argentina were halted, so alternatives had to be found. Although serious setbacks Civil and Building Works in Figures were noted in the progress after some initial contracts with Argentinean suppliers were terminated, the civil and building works were managed in such a way that the handing over deadlines to the Buildings (volumes) 885,000 m3 equipment supply companies were all met. Buildings and constructions (footprint) 114,800 m2 The main site works were completed in the autumn of 2007, after which the site organisation Buildings and constructions (floor area) 146,500 m2 concentrated on closing all of the sub contracts and completing the handing over documents.

Soil and earth movements 2,500,000 m3 Reinforced concrete 188,000 m3 Working in a Different Culture Reinforcement 16,500,000 kg Although the technical requirements concerning works were comparable to similar projects in other Precast elements (produced on site) 7,750 m3 parts of the world, several additional challenges had to be overcome at the Fray Bentos site as a Precast elements (produced off site) 7,950 m3 result of local circumstances. The fact was that the local market was not familiar with the specific requirements for a project of this size, so some of the supplies and services had to be procured from Underground piping 25,000 m a greater distance. For example, the steel supplies came from Brazil and Finland, site (mobile) cranes Pipe bridges 2,500 m were sourced from Brazil and Finnish manufacturers provided the steel doors and effluent pipes. This resulted in a mixture of around 30 different nationalities on the site. Total subcontractors and suppliers 39 Total sub contracts and supply contracts 135 Find out more about Lemcon by calling its Helsinki office on +358 2071 5001. The Lemcon website Peak level of workers on site (civil works) 2,840 www.lemcon.fi showcases the company’s three primary service areas, Project Management, Civil Engineering and Telecom Networks, and includes extensive references and contact details. Botnia 1.1:Layout 1 28/1/08 11:06 Page 62

Engineering Power

n May 2005, the Montevideo-based electrical engineering and instrument installation specialist Ingener S.A. joined the select group of national and international companies working to create IBotnia’s Kraft pulp mill project in the Fray Bentos region of Western Uruguay. The company brought in its highly skilled workforce and utilised its extensive experience of large-scale engineering at industrial, commercial, service sector and private locations to complete the contract successfully, on schedule and to the required quality standards. Ingener is naturally very pleased that Botnia’s project management team believed in its competence and in its ability to deal with critical systems at the project site. Ingener simultaneously executed large-scale electrical and instrumentation installations for the main project, including supply, erection, pre-commissioning and commissioning works. Due to the

INGENER customer’s stringent requirements regarding a variety of issues, such as management, delivery terms and control standards, it proved to be a very important challenge for Ingener – a challenge 62 successfully overcome.

The multi-faceted contract that Ingener undertook related to four key areas at the project site, as described below:

Pulp Drying Machine Working in a subcontracting capacity on behalf of the primary equipment supplier, Andritz, and Botnia S.A., Ingener worked 180,000 man-hours at the pulp drying machine over a nine month period. At the busiest time, 169 members of the team worked at the site, including Fernando Correa (Project Manager), Guillermo Segovia, Pedro Cousillas and Pablo Carbajal (Project Assistants), Miguel Cardozo (Instrumentation Foreman) and José Luis Galzerano (Electrical Foreman). In figures, the company installed:

• 15,000 metres of cable trays • 270,000 metres of cables • 1,200 motors • 10,000 connections • 1,800 instrumentation loops • 3,000 metres of stainless steel instrumentation piping

Balance of Plant (BOP) Ingener worked at various BOP installations for 10 months as a Botnia contractor. Some 85 members of personnel accumulated a total of 85,000 man-hours. The team, wholly different from that working at the time on the pulp drying machine, included Gastón Braga (Project Manager), Carolina Rius (Project Assistant) and Gustavo Rodriguez (Electrical Foreman). When all of the parts used for BOP purposes were added up, they totalled:

• 22,500 metres of cable trays • 123,000 metres of cable • 100 metre Bus bar • More than 3,000 connections • UPS boards assembly Botnia 1.1:Layout 1 28/1/08 11:06 Page 63

Above: the completed 150kV electrical Electrical Energy Distribution, HV and MV substation at the Fray Bentos site. Opposite Ingener acted as subcontractor for the Finnish automation and electrification solutions specialist page and bottom: Ingener staff at work at the BOP installations Vaasa Engineering Oy. One of the most significant tasks was to assemble the 150kV electricity substation that linked the site to the wider Fray Bentos grid. Other vital tasks that Ingener accomplished included:

• Assembling Transformers: 1 x 63MVA, 150/33kV; 2 x 85 MVA, 33/11, 5 kV • Installing 58 cubicles of gas-insulated MV switchgear (SF6, 33kV) • DC and AC auxiliary panels

A smaller task in terms of hours worked (17,000) and maximum personnel employed (25), Ingener INGENER nevertheless devoted seven months to the electrical energy distribution contract, ensuring that everything went smoothly and that the installation was completed to the highest possible quality 63 and safety standards. Diego Invernizzi (Project Manager), Guillermo Segovia (Project Assistant) and Miguel González (Electrical Foreman) were amongst the key personnel for this element of the company’s activities at the Fray Bentos site.

Temporary Electrical Grid, Perimeter and Road Lighting The company undertook this Engineering, Procurement, Construction and Management (EPCM) project as Botnia’s contractor and installed substations totalling 10MVA to supply energy 24 hours a day until the permanent grid was fully complete. The project called for:

• Three substations at 2,000 KVA • Three substations at 1,000 KVA • One substation at 630 KVA • One substation at 200 KVA • 40,000 metres of cable • 60 provisional boards • 900 road lights

It took 73,000 man-hours and a maximum staff complement of 32 skilled Ingener employees to deliver the project. The delivery term of 28 months reflected the ever-changing requirements on site, while the 98 per cent reliability levels showcase Ingener’s professional and customer focused service ethic. Fernando Correa carried overall responsibility as Project Manager, ably assisted by Daniel Fernandez (Project Assistant) and Daniel Moreira (Electrical Foreman). Alicia Silvera was on hand, on this and the other three areas at which Ingener operated, to ensure that safety issues were effectively managed and that potential risks were minimised. As a result of its professional and highly capable business approach, Ingener can look back with satisfaction on the series of large-scale electrical engineering and instrumentation installation tasks successfully completed at Botnia’s newest and most ambitious pulp mill facility, an important reference in its ever-growing project portfolio.

The Ingener S.A. Central Office at Av. Millán 3221, PC 11700, Montevideo can be contacted direct on +598 2 208 4647 or [email protected]. The website is www.ingener.com Botnia 1.1:Layout 1 28/1/08 11:06 Page 64

Men of Steel

ased in Ostrava, Hutní montáže is firmly established as one of the largest construction, installation, repair and maintenance companies of industrial facilities and power generation Bunits and infrastructure in the Czech Republic. Its key assets include a highly experienced management staff, qualified construction personnel and the latest construction equipment and supply capabilities, from welding machines and non-destructive weld testing equipment to mobile cranes and associated engineering. The company has undertaken major contracts on several continents and employs more than 700 regular staff members. High quality installation and construction works, Hutní montáže strengths, are carried out in accordance with EN ISO 9001:2000 certification. The company owns a number of Czech and international certificates and licenses for its specialised activities. A new QA/QC environmental system

HUTNÍ MONTÁŽE is currently being implemented according to ISO 14001:2005 standards. Occupational safety and the protection of employees’ health are key priorities. Hutní montáže is strong, competitive and stable. 64 Its basic objective is proactively to continue the development and strengthening of the company, in Europe and in emerging markets, and to ensure its long-term prosperity.

Botnia’s Recovery Boiler Hutní montáže played a major subcontracting role in the construction of the structural steel and equipment installation for the recovery boiler at Botnia’s Fray Bentos facility. Two major factors explain how the company won the contract. First, Hutní montáže has a long-standing history of cooperation with Andritz. It also has a long reference list of successful projects completed for the power industry. At Fray Bentos, as at all of its project sites, Hutní montáže’s managers, civil engineers, fitters and welders relied extensively on their previous experience of heavy lifting at high elevations. The company constructed the structural steel that supports the main boiler, as well as its auxiliary service platforms. Most of the structural steel connections were bolted; site welds were only carried out at the connecting points of the main supporting columns. In places, the material width reached 50 millimetres. The 70-ton main supporting grid for the boiler was the heaviest single piece, and was installed 85 metres above ground level.

In terms of equipment installation, Hutní montáže installed the so-called ‘Core Pressure Parts’ with Andritz and the non-pressure parts – otherwise known as ‘Open Book Equipment’ – with Botnia S.A. The scope of works included:

• Unloading the components delivered • Transporting components to the boiler, with the horizontal and vertical transport of components to be installed using the purchaser’s equipment • Installing components in their designated position • Welding, annealing of welds and NDT tests, all carried out in accordance with ASME-Code standards • Pressure performance testing

Equipment installation began on 31 July 2006 and a Demag CC 2800 crawler crane with super lift was brought in to lift and install the pressure parts in October. One of the largest challenges was lifting the steam drum – 16.4 metres long, three metres in diameter and weighing 127 tons – which had to Botnia 1.1:Layout 1 28/1/08 11:06 Page 65 HUTNÍ MONTÁŽE 65

be lifted together with the boiler roof lintel girder, so that the total weight of lifted parts fastened to the hook of one crane exceeded 130 tons. This method enabled a unique lift, with two major components brought to their designated position at the same time, using the capacity of a single crane in an optimal way. All crucial lifts of the pressure parts’ important components took place either with the Demag CC 2800 with super lift, or with a Liebherr 550 EC 40 tower crane, moving its 100-metre-high hook across the boiler roof and suspending the lifted units into their designated position upon hangers placed in the boiler roof trusses. The total weight of the boiler components delivered into the boiler house for further installation was 4,400 tons of pressure parts and 1,300 tons of non-pressure parts. 8,000 welds of special steel were needed to install the boiler pressure parts (Compound, Sanicro 38, SA 106 B, SA 335 P11, SA 335 P22 and so on). Less than one per cent was defective. The scope of works also called for the installation of steam piping between the boiler and a turbine, using the Hutní montáže played a vital role in the special material X10CrMoVNb9-1. construction and installation of the mammoth steel structures that support the The Hutní montáže website www.hutni-montaze.cz has a wealth of useful information about the Botnia Fray Bentos mill and also completed the steel structures, piping and equipment company and its areas of expertise. To get in touch with Hutní montáže at its Czech Republic installation at the boiler headquarters, call +420 595 95 1111 or email [email protected] Botnia 1.1:Layout 1 28/1/08 11:06 Page 66

Building Storeys

innish-born but globally active, Betamet has built up an impressive reputation since its formation in 1993 as a creatively minded specialist with particular expertise in large-scale Finstallation and maintenance contracts. Its portfolio of successfully realised projects incorporates a wide variety of sites in Europe, South America, Asia and even Australia. Location, clearly, is no object for Betamet. The company’s involvement in the Fray Bentos project started in the beginning of 2006, when Andritz sent out invitations for tenders. Sales negotiations and tender revisions followed, with Andritz working as Botnia’s representative and equipment supplier. The contract, signed at the end of April 2006, was made directly with Botnia S.A., in line with the project’s so-called ‘open book’ scheme. The first tool container set off for Uruguay in June 2006, with a second in August. The first

BETAMET members of staff arrived at the end of July, the rest following in August. Betamet’s strength was some 20 to 23 people, including two supervisors, a surveyor and a team of fitters and welders. 66 According to the contract, Betamet was to undertake the mechanical fitting of the fibre line and a part of the equipment installation at the evaporation plant and digester house. Thousands of hours of additional work, falling outside the original scope, were performed within these locations. Almost 250 devices were installed, including nine DD Washers, dozens of pumps, tanks, heat exchangers, maintenance bridges and a chip bin. More than 25,000 work hours were accumulated, or almost 15 man-years.

Skills and Expertise Needless to say, all the Betamet employees on site were professionals in their respective fields. Experienced and skilled fitters and supervisors filled the key positions. One fitter had a Portuguese Botnia 1.1:Layout 1 28/1/08 11:06 Page 67 BETAMET 67 Betamet’s installation contract covered the background, which contributed to the project’s success. In a Spanish speaking country, this is a real entire fibre line at the pulp mill as well as advantage. Staff took holidays in Finland approximately every two months, although many spent parts of the evaporation plant and digester longer periods in Uruguay and some even stayed for Christmas. house. The company’s expertise and close The company successfully performed all of the positioning works needed to complete the cooperation with Botnia and Andritz managers ensured a successful outcome installation of equipment. Other services were outsourced as demand required, such as the welding of pressure vessels and X-ray testing. Obtaining certain fitting materials and accessories in Uruguay proved to be a major problem. Welding rods, for example, were simply not available on the Uruguayan market, while security equipment and special fitting tools needed to be chartered from Finland by courier. Although the contract was made with Botnia S.A., the site supervisor came from Andritz. Representatives of Botnia, Andritz and Betamet attended the weekly site meetings, which covered (amongst other important issues) work progress, security issues, possible problems, schedules, resource allocation and delivery of equipment to the site. This was the first project for Betamet that involved installing the entire fibre line and all related equipment. The project went well, despite the distant location from its home base, and proved to be a good example of a turnkey delivery, where one supplier is assigned to take care of all installation work for a certain area. Work tends to advance smoothly when one company is responsible for the resolution of all possible problems and when there are few contact surfaces between companies.

Everyday Life at the Site A Betamet member of staff recounts his experiences of working at a large site with a foreign culture. While the surroundings, working methods and working conditions were different from those usually experienced, good skills and a motivation to work enabled the Betamet team to cope and attain the set goals.

Material Deliveries The size of the site was huge. All sorts of problems can occur at a site like this. However, all such problems were overcome. We started to get the actual installation material in November 2006. At the time, ships carrying materials for our installation work arrived at the Botnia harbour. We Botnia 1.1:Layout 1 28/1/08 11:06 Page 68

arranged a round-the-clock duty at the harbour. Most of our material was unloaded from the ships during the night, when the port was quiet; two or three ‘duty officers’ redirected the shipping containers to the right location by morning. When the first two ships had been unloaded the real work could begin. The weather was favourable from November to March, although the temperature rose to 36°C on the hottest days, which is too much for Finns. One had to drink several litres of water every day. Thankfully we have experience of such conditions and, despite the heat, managed slowly but surely to recover the delay on our schedule.

Long Working Days We worked 10-hour days at the site on weekdays and another eight hours on Saturdays. As we unloaded the containers we checked what was missing. Then we had to find out where the missing items were. There were other frustrations. At several locations we had to wait for the constructor to finish its work before we could take over. Locations at which the installation site was at a height of 70 metres brought something extra to the installation! There were a dozen of these locations and the climb was an exploit in itself. We had to make sure we brought everything we needed with us. Security comes first at such heights. The installation was at the mercy of the weather and we couldn’t do any lifting when there was a strong wind. Unfortunately, we had to postpone installations on several occasions.

Successful Cooperation Working methods were similar to those encountered at any large installation site. Changes to plans occurred, of course, to which the Andritz design engineers had to agree. Cooperation worked excellently. Every problem was solved and the installation work was completed. Waiting for materials added colour to the project. When the Andritz staff needed to order supplementary or conversion parts from Finland, for example, it often took a month or longer to arrive. Usually, we managed to handle issues at an early stage so they didn’t turn into problems, only delays. There was a normal South American flavour to the work. When we asked someone else when they expected to finish their work they often replied ‘mañana’, tomorrow. This was repeated for two weeks at the most. Fortunately, we had so many installation locations, so we could always continue working somewhere. BETAMET

68 Botnia 1.1:Layout 1 28/1/08 11:06 Page 69

Installation works proceeded apace Rearranging work was an everyday reality at the site. We waited for materials and back orders throughout the latter months of 2006 and almost never arrived at the agreed time. Waiting for lifting and moving equipment often changed early 2007. Below: the Betamet-constructed the installation sequence completely. Rain would also cause significant changes to plans. We had to sauna established a little piece of Finland at the site have a Plan B for the days when rain spoiled our primary plans. When it was raining very heavily, the site’s roads could be cut for days. When a thunderstorm came after a hot day, it rained so much we couldn’t work. Finns had their ‘siesta’ during these storms – we repaired electric cables and tools. The rain usually lasted only a couple of hours. After a little wait we could continue our installation work. Parts of the installation were carried out under a roof, so the rain didn’t always matter. Often there were power failures at the site. Fortunately, even the longest ones lasted only half a day so they didn’t compromise the schedule. BETAMET Surprises Every morning was different. When the local workers had gone on strike, even us Finns were not 69 allowed to work. We returned to our apartments to wait for an announcement that the strike had ended. We usually spent these strike days visiting the country. We had time to travel hundreds of kilometres to see local life before returning to our apartments in Fray Bentos and Las Cañas in the evening. One morning, a snake was seen slithering at the site. It was difficult to spot in the soft dawn light. Local workers recognised the snake and told us it was venomous. We chased it for an hour before we had the courage to resume working.

Spare Time Leftover metal at the evaporating site gave us a perfect opportunity to build a sauna stove in November (which remained on site until the actual sauna was completed). We put aside timber by dismantling large boxes once they had been unpacked. When enough wood had been gathered we asked for permission to take the material off site. We finally found the right person to ask and got the authorisation we needed. It was over 30°C that day. At the gate, we told the gatekeeper why we were taking the timber. He laughed, obviously thinking that we were crazy! But we got the material to the right place. Now all we needed was voluntary work spirit. The sauna was built in the backyard of one of our rented houses. It didn’t take many weeks before we were taking our first sauna baths. We had thought about building a sauna before. Besides Finnish coffee, we had received sauna bench covers, a sauna ladle and a wooden pail by courier from Finland. They are a bit hard to come by in the local stores! Almost every time we heated the sauna we grilled tenderloin steaks. When in Rome, as they say! We spent our spare time taking sauna baths, grilling food and touring Uruguay. In the summer, swimming was a great way to spend spare hours and allowed us to cool off for a while. We became well acquainted with the staff of stores and certain restaurants in Fray Bentos. Everyone was very friendly with us Finns. Almost all of us were in South America for the first time. The flora and fauna were really exotic in our eyes. So we took lots of photographs to remember our time here.

For more on Betamet Oy, its wide-ranging service and products portfolio, credentials and contacts list, visit the website: www.betamet.fi. You can also contact the company direct at its Oulu (Finland) base by calling +358 8 532 8800 or by emailing your message to [email protected] Botnia 1.1:Layout 1 28/1/08 11:06 Page 70

Top of the Class

he family-owned company Kymppi-Eristys is a globally active provider of industrial insulation to such process industries as pulp and paper, metal, energy production, chemicals and Tpetrochemicals. Since the start of the new millennium, the company has grown into a one-stop insulation provider with more than 200 insulation professionals. Kymppi-Eristys is headquartered in Oulu, Northern Finland, and has three Finnish branch offices. Its automated state-of-the-art sheet metal component workshop in Oulu creates high-quality prefabricated products to the customer’s specifications at competitive prices. An extensive network of professionals is on hand to deliver comprehensive insulation projects that match customers’ needs, regardless of size or location. The company has achieved ISO 9001 and ISO 14001 standard certification, audited by DNV, to secure systematic operations. Top-level industrial health and safety policies are just as important and

KYMPPI-ERISTYS OHSAS 18001 standard certification will be acquired during the spring of 2008. 70 Botnia and Uruguay Kymppi-Eristys had the honour to participate in Uruguay’s largest ever industrial project. The company first performed diligent preliminary work on the project and the local operating environment and, finding the circumstances to be favourable, prepared in earnest to compete for the contract. The town of Fray Bentos developed very much during the two years, with services improving all the time. Uruguayans were excited about the project and the good it brought to their area. Thus the project went along smoothly, in mutual understanding with the locals. Our first employees travelled to the site at the end of November 2006 to help establish the site and deal with all related issues. The first materials (scaffolding) and installation equipment arrived on site from Finland at about the same time. Installation work started at the turn of January/February 2007. The delivery included insulation of the fibre line and drying machine, insulation of the turbine and tanks, and insulation of pipelines between these plants, totalling 24 kilometres in length. The insulation coatings were primarily manufactured in Finland. We had our own mobile prefabrication automation line at the site, enabling us to react quickly to changing issues. It took five to eight weeks for freight to reach Uruguay, so sending the materials from Finland required good advance planning in order to have the required materials at the site at the right time. Materials were acquired primarily in Finland, the Netherlands, Germany and Poland.

The Organisation Both experienced and hard working, our project organisation was able to solve even the most difficult issues. Such a capability is vital, especially when working far from home. The project organisation mainly worked at the project site, but a part of the support organisation operated from Finland. It took approximately 30 hours to travel from Oulu to Fray Bentos. The trip started with a flight from Oulu to Helsinki, from there to Madrid and from Madrid over the Atlantic Ocean to Montevideo. From the capital of Uruguay one still had to travel some 340 kilometres by car to reach the final destination. The route operated jointly by the Finnish airline Finnair and the Spanish carrier Iberia was the smoothest, so this route was used for all journeys made by our personnel. Our project involved people from Finland, Uruguay, Poland, Estonia, Russia, Lithuania, Latvia and the United States. At the most there were more than 150 Kymppi-Eristys technicians at the site. The housing, transportation and on-site canteens arranged by Botnia worked smoothly, as they Botnia 1.1:Layout 1 28/1/08 11:06 Page 71 KYMPPI-ERISTYS

Achieving the highest possible quality insulation solutions at the Fray Bentos 71 facility was a particular focus for Finland’s Kymppi-Eristys

needed to do if the technicians were to focus on the actual work. It was great to notice the good atmosphere in the entire project organisation at the site, which consisted of tough professionals with many years of experience in international projects. This atmosphere transmitted to the suppliers, and their experience and competence proved indispensable. The official language in the project was English, but one could hear a lot of Finnish being spoken along the corridors. In fact, Finnish was an unofficial main language on the project between the buyers and the suppliers. The locals’ language skills also improved as the project went along, which made errands outside the site easier. The town was able to provide nearly all the services one could long for, and the nearby larger cities the rest, so running personal errands was quite easy. Keeping in touch with Europe caused no problems either, thanks to modern communications connections. Contact was maintained via email, chat, VoIP, text messages and, of course, by traditional telephone.

Kymppi-Eristys is based in Oulu, Finland, but is active worldwide. The first stop for more on the company is www.kymppi-eristys.fi. The contact details are telephone: +358 20 188 1100 and email: [email protected] Botnia 1.1:Layout 1 28/1/08 11:06 Page 72

CHAPTER 07 Coming Clean

or clients, end product is everything. They want their market pulp to be strong, clean, consistent and, often, brilliantly white. But for local communities at the ‘front line’, the Frequirements could not be any more different. As the first to benefit from new job opportunities and increased regional wealth – and, conversely, the first to be affected by any (potential) negative environmental impact – theirs is an intimate and long-term involvement, quite literally built upon common ground. Last of all comes the producer, who’s always searching for ways to minimise production costs whilst pushing quality levels and environmental protection standards to their absolute limits. How well producers manage these different needs is, above all, a question of process and technology. Botnia took time to consider all three viewpoints (quality, environment, economics) and then

PROCESS opted to purchase a modern, but tried-and-tested Elemental Chlorine-free (ECF) bleaching fibre line from Austria’s Andritz Group. “We’re using the latest technology that has already been proven in 72 operations elsewhere,” notes Mill Manager Sami Saarela. He’s the first to admit the practical realities behind the decision: “Because the plant is sited far away from the service centres of equipment suppliers, no prototypes will be installed.”

ECF ticked the other boxes, too. It produces fine white paper pulp more efficiently, evenly and Andritz/Thomas Wedderwille at a lower cost than alternative technologies. Stringent safeguard systems make sure that there are no harmful emissions into the surrounding environment. It was critical to Botnia that today’s ECF technology satisfies the requirements set out in 2004’s Stockholm Convention on Persistent Organic Pollutants (POPs) and fulfils the European Union’s Integrated Pollution Prevention and Control (IPPC) Directive definition of Best Available Techniques (BAT):

The most effective and advanced stage in the development of activities and their methods of operation, which indicate the practical suitability of particular techniques for providing in principle the basis for emission limit values designed to prevent and, where that is not practicable, generally to reduce emissions and the impact on the environment as a whole.

What’s in a Name? It’s the old debate, one that pulp and paper veterans have heard many, many times before. Scientific analysis and in-the-field operational experience has resolved the ‘ECF or TCF?’ question, only for the debate to reignite whenever a pulp manufacturer announces plans to increase production at an existing facility or, like Botnia, to construct a brand-new greenfield mill. The popular myth is that Totally Chlorine-free (TCF) bleaching is the most effective and cleanest technique for producing market pulp and that producers choose ECF solely for its price advantages – which inevitably makes villains out of Botnia and the overwhelming majority of the world’s pulp manufacturers. The facts, we discover, tell a very different story. ECF and TCF are modern-day variants of the Kraft or sulphate process, which ‘cooks’ wood chips in a sodium hydroxide/ sodium sulphide solution (‘white liquor’) inside a large pressure vessel called a digester to extract the lignin (the chemical compound that forms cell walls) and free the wood fibres. Developed in 1879 and first commercially used (in Sweden) in 1890, Kraft mills originally used sodium hypochlorite (NaOCi) to bleach the so-called ‘brown stock’ pulp solution and give the end product its required whiteness. Elemental chlorine (Cl) took over in the 1930s and retained its status as the bleaching chemical of choice until the 1980s, when serious side effects came to light. Botnia 1.1:Layout 1 28/1/08 11:06 Page 73

Bleaching with elemental chlorine inevitably deposits a significant quantity of bio-accumulative toxic substances into the mill’s wastewater. The worst environmental culprits are the dioxins, which the Stockholm Convention includes on its list of 12 persistent organic pollutants. Concerns about chlorine prompted the development of two entirely new bleaching processes – ECF and TCF. These technologies fought for supremacy for more than a decade, before ECF emerged as the clear environmental and economic winner. Because ECF bleaching uses a compound that has the word ‘chlorine’ in it (chlorine dioxide, or

ClO2), some NGOs believe that it is really only a small improvement on elemental chlorine in terms of its environmental impact. Totally Chlorine-free sounds like a much better bet, doesn’t it? (TCF, by

the way, substitutes hydrogen peroxide (H2O2) or ozone (O3) for chlorine.) In fact, ECF bleaching virtually eliminates – not just reduces – the creation of dioxins, furans and other persistent

organochlorine compounds. When ClO2 reacts with lignin, the chlorine by-product is not a POP, but a harmless salt. In this sense, chlorine and chlorine dioxide could hardly be any more different. After more than 10 years of trials at ECF pulp mills, dioxin levels have never come close to the minimum detection levels as set by the US Environmental Protection Agency. Their environmental records are about equal, since neither technology emits dioxins at environmentally significant levels, yet TCF requires many more trees to be harvested for every ton of pulp produced, which gives ECF a significant pulp yield advantage. It’s the same story with the quality and versatility of the finished market pulp. ECF-manufactured pulp offers greater fibre strength, higher final brightness levels, greater stability and better yields than its weaker, less recyclable competitor. Botnia’s Fray Bentos mill, like three quarters of the world’s Kraft mills, utilises the superior performance and strong environmental credentials that ECF offers, albeit with a few modern tweaks. An oxygen delignification stage has been introduced prior to pulp bleaching, for example, to lessen the quantity of required bleaching agents. This transforms ECF into what has become widely known as ‘ECF Light’ – a harmonious mix of Elemental Chlorine-free and Totally Chlorine-free process technologies and one of the most environmentally responsible ways to produce superior quality market pulp. “TCF is hardly used around the world because the technique has not continued to advance,” Project Leader Timo Piilonen explains. “The fibres it produces cannot be used to manufacture quality paper. Efforts to improve the ECF technique have been continuing for more than a decade, and it is the most advanced ECF method that has been used in Uruguay.” PROCESS 73 Primary Installations at the Botnia Mill

10 8

6 9

7 3

5 4

1 1 Woodyard (Storage, Chipping, Screening) 2 Fibre Line (Cooking, Delignification, Bleaching) 3 Pulp Drying/Dewatering Plant 4 Evaporation 5 Recovery Boiler/Power Plant 6 Chemical Recovery Island 7 Water Purification Plant 8 Water and Effluent Treatment Plant 9 Chemical Island (Kemira) 10 Port Terminal Botnia 1.1:Layout 1 28/1/08 11:07 Page 74 PROCESS

ECF: the Botnia Way Even though its systems and processes have been tried, tested and proven to be efficient elsewhere, Botnia’s bleached eucalyptus kraft (BEK) pulp mill sets standards to which many Latin American mills can only aspire. It’s a ‘single line’ facility, which means that there is usually one of each of the main processing units and these are generally arranged, from a material flow standpoint, in a line. Here’s a quick guide to the Fray Bentos process (an in-depth analysis is provided on pages 78-85). It starts with wood handling. Debarked eucalyptus logs are fed into the two-line chipping plant and shredded into uniform size chips. Once the oversized wood chunks and impurities have been screened out, the remainder is transported to the continuous digester and immersed in a white liquor solution. ‘Cooking’ takes several hours, at temperatures of 130°C to160°C, by which time most of the lignin has separated into the chemical solution. Drum displacers wash the ‘brown stock’ pulp clean and the residue, known as ‘black liquor’, is taken to the recovery boiler for processing. Oxygen is pumped through the pulp to extract further lignin, after which the brown stock is screened and washed to remove organic leftovers. Andritz’s patented ‘A-Stage’ removes the hexenuronic acid from the pulp, significantly reducing the amount of chlorine dioxide needed for final delignification and brightening. Botnia uses a four-stage bleaching sequence to whiten the pulp. “Three bleaching stages can give eucalyptus pulp adequate brightness but there’s the possibility of yellowing later,” Sami Saarela tells us. “The fourth peroxide stage will ensure high quality and allow any errors or disruptions that occurred before bleaching to be fixed.” Screening removes the last traces of impurities and the pulp slurry goes into the two-line dewatering and drying plant, emerging as a strong web that can pass through the pulp drying machine without losing its shape. The end product is then cut to shape, pressed, wrapped, tied and stacked into units, ready for transport to the warehouse and, eventually, for export. Botnia 1.1:Layout 1 28/1/08 11:07 Page 75

Opposite page: details of the mill start-up. Clockwise from top left: energy production in the recovery boiler; inside the boiler; mill technicians from Uruguay and Finland follow the process in the monitoring room; detail of the woodyard. This page: finished pulp (below) and the exterior of the continuous digester (right) PROCESS 75

The primary chemicals needed for bleaching (caustic soda, chlorine dioxide, oxygen and peroxide) are produced at the ‘chemical island’, an outsourced plant located adjacent to the fibre line; 99 per cent of the white liquor is recovered and sent back to the digester for reuse; finally, the waste water is securely transported to a water and effluent treatment system, which carefully extracts trace chemicals, and the purified liquid is responsibly released into the fast-flowing Río Uruguay.

Energy Efficient Botnia’s electricity supply is as environmentally friendly as its pulp manufacturing process. By burning black liquor biomass residues derived from the pulp cooking process, the mill generates more than enough power to meet its needs – the yearly surplus of 270 GWh, incidentally, could power as many as 150,000 homes. Greenhouse gases generated in the process are bonded in the growing eucalyptus forests, so environmental impact is cleverly minimised and the end result adheres to the Clean Development Mechanism (CDM), as set out in the Kyoto Protocol to the United Nations Framework Convention on Climate Change. Botnia is determined to contribute to the welfare of regional communities and environments. So, once all of the measures the company could think of to eradicate potential emissions had been implemented at the project site, the emphasis shifted to the wider socio-environmental perspective. Botnia would clean up after others and improve water quality in the Río Uruguay, the company announced. It has offered to treat the domestic sewage from Fray Bentos in the mill’s effluent treatment plant and burn the waste biomass generated at Papelera Mercedes S.A. (PAMER), a small pulp and paper mill to the south that does not have a recovery system for black liquor. Successful long-term relationships are built on just this kind of proactive endeavour. Botnia 1.1:Layout 1 28/1/08 11:07 Page 76 PROCESS

76 Andritz/Thomas Wedderwille Botnia 1.1:Layout 1 28/1/08 11:07 Page 77 PROCESS 77 Botnia 1.1:Layout 1 28/1/08 11:07 Page 78

Proven Partners

hen Andritz delivered key production systems to Botnia’s mill at Kaskinen in 1977, it initiated a close working relationship between the two companies. Andritz and Botnia Ware used to working together in an atmosphere of mutual respect and trust, with Andritz providing technology for all five Botnia mills in Finland – Kaskinen, Äänekoski (1985), Kemi (1991), Rauma (1996) and Joutseno (1999). These mills have a combined production capacity of 2.7 million tons a year. So, it was logical for Botnia to consult Andritz about the possibility of a next grand collaboration – a 1,000,000-ton/year greenfield project in South America. Andritz has the experience of delivering large-scale lines for greenfield projects. This was its first opportunity, however, to put everything together at one location.

ANDRITZ Andritz is a globally operating supplier of systems and services. Based in Graz (Austria), the company garnishes about 45 per cent of its €3.2 billion annual revenue from the pulp and paper 78 industry. Through a series of complementary acquisitions, Andritz has grown from a manufacturer of specialised machinery into a full-line supplier of pulp and papermaking technologies. Botnia’s Fray Bentos mill is its first large investment outside Finland. The August 2005 award to Andritz was both an honour and a challenge for the company’s engineering and project teams. Still, every process and every system in the mill is proven somewhere in the world. For example, there are mills in Brazil (Aracruz, Veracel, VCP), Chile (CMPC, Arauco) and Finland (UPM Wisaforest) for which Andritz has delivered large systems whose start-up and production curves have set world records.

Teaming up for Technology Andritz has proven its ability in large projects and has the resources to quickly assemble a global team to manage the workflow. At the highest level, the company is organised into Capital and Service groups. In simple terms, Capital delivers the technology; Service is responsible for lifetime product support. The Fray Bentos mill is based in all aspects on the best available technologies – for forestry, wood harvesting and transport, pulp production, pollution control and environmental management. Needless to say, the Best Available Techniques (BAT) from Andritz are impressive in their scale and efficiency.

Woodyard It is said that pulp quality begins in the woodyard. Eucalyptus requires specialised knowledge and equipment to process. Fortunately, Andritz has extensive experience handling eucalyptus from installations in Brazil, Portugal, Spain, China and Chile. At Fray Bentos, the logs are debarked in the field, then chipped and screened at the mill prior to the cooking process. Andritz supplied the two- line-chipping plant, chip storage system and chip screening system. Two chipping lines produce high, uniform quality chips. Each has a capacity of 330 cubic metres per hour under bark. At the beginning of each line is a PowerFeed™ infeed conveyor and a small debarking drum, which removes sand and impurities, and equalises log flow to the chippers. A three- stage log washing system removes residual stones, sand and rope-like eucalyptus bark. The heart of each chipping line is the horizontally fed HHQ-Chipper™, which produces extremely homogenous high-quality chips. Chip storage utilises the latest blending bed technology with a rotating stacker- reclaimer; the chip storage operates a first-in-first-out principle and provides even and equalised

chip flow to the screening and digester feeding. Screened chips are then fed to the digester. Andritz/Thomas Wedderwille Botnia 1.1:Layout 1 4/2/08 11:08 Page 79 Andritz/Thomas Wedderwille ANDRITZ 79 Andritz/Thomas Wedderwille

Pulp Production Botnia’s Fray Bentos mill prepares high-quality pulp using the tried-and-tested Kraft (sulphate) process. The world’s paper, board and tissue manufacturers prefer Kraft pulp for its strength, ease of application and advanced chemical recovery and environmental management methods. In this system, wood chips are ‘cooked’ in a tall vessel – in which heat and chemicals called ‘white liquor’ are added to the chips – to dissolve the lignin in the wood and separate the good cellulose fibres, which become pulp. It’s a continuous process, with chips entering the top of the vessel and pulp flowing from the bottom. Andritz supplied the two-vessel continuous digester, which is designed to produce 3,200 air-dried metric tons of pulp per day (admt/d). The digester uses a patented Andritz technology called Downflow Lo-Solids® cooking, which increases the capacity of the digester and produces cleaner pulp. The patented TurboFeed® system, meanwhile, uses special pumps to move chips to the top of Left: Timo Piilonen and Jukka Sainiemi, the the digester, eliminating some costly equipment, improving efficiency and cutting the investment Botnia–Andritz partnership in action. cost. Three large Drum Displacer® (DD) washers clean the pulp. Oxygen is then used to extract more Above: cut-to-length logs stacked at the lignin (oxygen delignification) so the pulp is easier to bleach. Screening removes knots and rejected site are fed into the chipping lines. Above right: the Andritz recovery boiler materials in the pulp, which after another wash is ready for bleaching. Botnia 1.1:Layout 1 28/1/08 11:07 Page 80 ANDRITZ Andritz/Thomas Wedderwille Andritz/Thomas Wedderwille 80 Bleaching Bleaching, which removes residual lignin, prepares the pulp to the proper brightness to use in paper, board and tissue products. Safe and efficient bleaching is the focus of considerable R&D, due to the potential impact of bleaching chemicals on the environment and its critical effect on pulp quality. The Fray Bentos bleach plant features the patented A-Stage™ for the first stage of the Elemental Chlorine-free (ECF) bleaching process. This patented technology – a collaborative development between the Finnish pulp industry, Finnish R&D institutes and Andritz – significantly reduces the quantity of bleaching chemicals required. The four efficient DD Washers also help to save bleaching chemicals. The unique design of the washers allows recycling of bleaching filtrates without building high levels of Chemical Oxygen Demand (COD) in each stage – further reducing the volume of bleach plant effluent that might have an impact on the environment.

Drying and Baling The Andritz two-line pulp dewatering and drying plant is designed to handle a 3,600 admt/d (one million tons per year) production. For added flexibility, Botnia selected two identical 1,800 admt/d dewatering and drying lines, instead of one large line. Pulp is screened and dewatered before entering the pulp drying machine. Andritz delivered a five-stage screening system that converts pulp slurry into a web, with the strength and integrity to pass through the drying machine unsupported. Dewatering is performed using Andritz’s Twin Wire Former pulp machines, with trim widths of 5.3 metres. Twin Wire dewatering is the most efficient and gentle method, and delivers the highest throughput. The pulp web rides on a cushion of air through the machine’s 27 drying decks and two cooling decks. A Cutter/Layboy cuts dried pulp into sheets, which are formed into stacks (bales) in the baling lines. There are four such lines at Fray Bentos, each controlled by an Andritz BaleMatic™ automation system. Lines are continuous conveying systems, with stations that weigh the bales, press them to the proper height, wrap, tie and stencil them and stack bales into units. These are staged so they can be transported to the warehouse by clamp trucks.

Chemical Recovery/Energy Production In a modern pulp production facility, over 99 per cent of chemicals used in the cooking process are recovered and reused. Chemical pulping is not only self-supporting in terms of energy and chemicals, Botnia 1.1:Layout 1 28/1/08 11:07 Page 81

but it is also designed to produce an excess in bioenergy. The chemicals are recovered and converted to their original state in a ‘chemical recovery island’. The process involves concentrating (evaporating) so-called ‘black liquor’ – lignin and other compounds remaining after the pulping process – and burning the mixture in a recovery boiler. The burning produces energy and the chemicals are recycled for reuse. Andritz supplied the entire chemical recovery island at the Fray Bentos mill site. The evaporation plant is very energy efficient with seven-plus effects and can remove 1,100 tons per hour (t/hr) of water from black liquor. A Liquor Heat Treatment process modifies the viscosity of the liquor so it can be optimally fired in the recovery boiler at 80 per cent dry solids. This enhances efficiency and environmental performance. Andritz’s evaporation technology has a sophisticated internal system for stripping volatile compounds from the secondary condensate, which allows clean fractions to be easily reused in the pulping process. The recovery boiler is among the world’s largest. It can burn 4,450 tons of dry solids a day (tds/d). A special feature of the boiler, the Vertical Air™ system, optimises the burning of black liquor, so air

emissions are minimised. In fact, sulphur dioxide (SO2) emissions are near zero and nitrous oxide

(NOx) emissions are within the latest strict requirements. Inorganic smelt from the recovery boiler is collected in a dissolver. This creates ‘green liquor’, which is causticised by adding lime, producing white liquor (for use in the digester) and lime mud. The latter goes into the lime kiln to recover lime, which is reused. Andritz supplied a plant capable of recovering and preparing the 10,000 cubic metres of white liquor the fibre line needs each day. This white liquor plant represents the most modern technology available to the market for recausticising and lime reburning. Two X-Filter™ units are utilised for green liquor filtration. These field-proven filters deliver high purity liquor by removing non-process elements that typically build up in the recausticising process. The large Andritz CD-Filter™ that purifies the white liquor has also been selected for the latest Andritz deliveries to UPM (Wisaforest and Kymi). The lime kiln can produce 830 t/d of lime, which is used to produce white liquor. It’s a large rotating cylinder, 135 metres long and 4.75 metres in diameter. The primary fuel is heavy oil, although hydrogen and methanol collected during the pulping process are also used. By producing white liquor this efficiently, there is very little solid residue left to discard to landfill. In fact, less than one per cent of the initial raw material is discarded. A modern pulp mill is more than self-sufficient in its electrical generation and normally will provide a net flow of energy to the local electrical grid. Electricity is generated in an environmentally ANDRITZ friendly way at the Fray Bentos mill. The black liquor generated in the pulping process – which is burned in the recovery boiler – is a renewable biomass material derived wholly from eucalyptus. 81 Any greenhouse gases that result from the burning process are bonded in Forestal Oriental’s fast- growing eucalyptus forests. Botnia’s electricity generation adheres to the Clean Development Mechanism (CDM), as set out in the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

Dynamic Simulation IDEAS Simulation and Control, an Andritz company, delivered a dynamic process simulator for the Fray Bentos mill. This simulator ‘models’ the key processes well before a mill starts up and has proven

Palleted pulp bales emerge from one of the its capabilities at several recent greenfield projects, helping mills start-up quicker and with fewer four automated wrapping lines disturbances. It was used at Fray Bentos to provide feedback to the mill’s distributed control system Andritz/Thomas Wedderwille Botnia 1.1:Layout 1 4/2/08 11:09 Page 82

Left: Gervasio Gonzalez, the mill’s Environmental Manager, checks the clarity of the effluent after it has been biologically treated. Below (top): Andritz maintenance staff recondition a small part at their machining centre on-site at the mill. Below (bottom): an Andritz maintenance supervisor checks the operation of the new recovery boiler ANDRITZ Andritz/Thomas Wedderwille 82 Andritz/Thomas Wedderwille Andritz/Thomas Wedderwille

so that the control logic and process interactions could be fully tested before start-up, resulting in fewer errors during start-up and operation. The simulator was also used to train operators. Simulator training has proven to be an effective way to train, enabling prospective operators to practice start- ups, shutdowns and handling process disturbances without risking the equipment, production or the environment.

Environmental Care Botnia’s experience base provides a high level of certainty that the analyses performed to forecast pulp quality, social impact and environment impact are very reliable. The industry regards Botnia as a frontrunner in environmental safety. Considering that most harmful emissions are generated during disruptions, the proven Andritz technologies contribute to the goal of having as few halts and disturbances as possible. Compared to the amount of pulp produced, emissions will be among the least intrusive in the world. In absolute numbers, the discharge amounts are comparable to those of Botnia’s smaller mills. Botnia 1.1:Layout 1 28/1/08 11:07 Page 83 Andritz/Thomas Wedderwille ANDRITZ 83 Air Quality Air emissions originate mostly in the burning process – in the recovery boiler, lime kiln and auxiliary boilers. Improved management of the combustion process and cleaning of fuel gases ensures that most of what comes out of the smoke stacks is water vapour. By concentrating the black liquor in the evaporation plant – and by adopting the Vertical Air™ system to optimise the burning of black liquor – emissions from the recovery boiler are kept below the most stringent values expected from a modern pulp mill. Combustion gases originating in the recovery boiler and lime kiln have electrostatic precipitators (ESPs) to remove most of the particles dispersed in the flue gas. Dust from the ESPs is returned to the furnace and mixed with concentrated black liquor. Flue gases from the lime kiln’s ESPs are channelled

into a 120-metre-high common stack equipped with instruments to monitor SO2 TRS, NOx and dust to make sure they are within permitted values. By-products containing sulphur compounds are the primary cause of odour at Kraft pulp mills. Since the local community’s initial concerns about the Fray Bentos mill centred on the collection and treatment of odorous gases, alternative ways to burn these gases have been designed in. A special burner inside the recovery boiler handles low-volume, high-concentration odorous gases (LVHC). One auxiliary boiler can burn these gases if the recovery boiler is not in use. The high-volume, low- concentration (HVLC) gases are also burned in the recovery boiler. Air is mixed with the gases to ensure complete burning. As a backup, the auxiliary boiler can burn HVLC gases.

Effluent Quality While bleaching is the main effluent source in volume, other processes contribute to overall effluent volume and quality. The modified Lo-Solids® cooking in the digester lowers the pollutant load of COD and Absorbable Organic Halogens (AOX) in wastewater from the bleach plant. Efficient pulp washing in the DD Washers further reduces the COD load and increases black liquor recovery efficiency in the chemical recovery island. Oxygen delignification and A-Stage bleaching decrease the amount of chemicals required for final bleaching and therefore decrease the pollution load. Totally eliminating the use of elemental chlorine has lowered the concentration of AOX in treated effluents to such a low level that it is not environmentally significant. In the bleach plant, acid and alkaline stages alternate in the bleaching sequence. The A-Stage™ significantly reduces the amount of bleaching chemicals and therefore the amount of chemicals in the plant’s waste Botnia 1.1:Layout 1 28/1/08 11:07 Page 84 ANDRITZ

84 Andritz/Thomas Wedderwille

stream. The unique design of the DD Washers, meanwhile, allows bleaching filtrates to be recycled – reducing the COD load and volume of bleach plant effluent that might have an impact on the environment. Within the evaporation plant there’s an extensive system for stripping malodorous gases from the condensate and further treating the condensates so they can be reused. This reduces the overall COD load and lowers the volume of wastewater flows at the effluent treatment plant. Clean condensates from the evaporation plant are returned to the condensate or water cooling system. The DD Washers in the fibre line and causticising process use up the secondary condensate. The mill also has an effective spill management system that incorporates both containment and recovery. If there is a process disturbance and liquors containing organic substances are released from the system, they end up in a spill collection tank, from which the liquors are reincorporated into the process. Rain water is separated from the process sewer system, so spills have no access to the Botnia has taken advantage of Andritz’s rain water collectors. Overall Production Efficiency (OPE®) service at Fray Bentos. Uruguayans recruited and Suspended solids of green liquor sediments are the largest non-recyclable source of solid residue trained by Andritz are part of the in pulp mills. Since these dregs originate in wood, it is planned to return them controllably to the maintenance team that will service the mill plantations, together with the lime mud used in the separation process. under a multi-year contract Botnia 1.1:Layout 1 28/1/08 11:07 Page 85 Andritz/Thomas Wedderwille

Long-term Local Presence Andritz’s OPE® (Overall Production Efficiency) service takes advantage of the company’s expertise in process, equipment and maintenance to identify bottlenecks and recommend actions to increase process availability. Andritz has been involved in the development of maintenance production services for Botnia’s Finnish mills since 2002. The initial OPE® contract covered only the white liquor plant at Joutseno and, due to the excellent results, was expanded to the fibre line and, most recently, the chemical recovery area. Similar cooperation has since started in other Botnia mills, including its newest facility at Fray Bentos. As the Andritz project team prepared technology quotations, the Andritz service team put together a 10-year maintenance plan and maintenance cost. All regular maintenance tasks and rebuild intervals were identified and put into the plan. A quotation was then submitted for all ANDRITZ maintenance services. Botnia negotiated with several international maintenance service providers and, in September 2005, signed up with Andritz. The scope includes: maintenance planning, pre- 85 engineering, training, implementation and all preventative and corrective maintenance (mechanical, instrumentation, automation systems, electrification and building maintenance), warehousing, parts procurement and subcontracting for special services. It takes a considerable amount of work to plan the maintenance of a new pulp mill. Pre- engineering was mainly carried out in Finland before the core maintenance team came on site in October 2006 to recruit staff and implement maintenance activities. This approach ensured that maintenance was adequately considered through all stages of the project. Pre-engineering planning included criticality analyses of the mill’s main production systems – determining how important the equipment is to the process and the time and cost required for repairs. The next stage was to prepare a preventative and predictive maintenance plan and enter the information into Botnia’s computerised maintenance system (SAP PM). One of the maintenance goals at Fray Bentos is to achieve better productivity (maintenance cost per ton of pulp) than that achieved in Finland. In the training phase, Andritz brought several Uruguayan engineers to Finland for three months in 2006 for intense training in pulp processes and maintenance methods. They also gained work experience at several Andritz locations in Finland. Training continued in Uruguay during site implementation, construction, commissioning and start-up. The maintenance team now has a network of local companies with experience at the mill to support its various tasks. The work during the construction of the mill gave these companies a good understanding of the installed equipment. This will be beneficial during annual shutdowns – a period when hundreds of people may be on-site at one time to perform inspections, special maintenance activities, upgrades and repairs. Andritz is determined that its maintenance staff should be mainly Uruguayan. Since Uruguay does not have a tradition of pulp production, the company has recruited maintenance professionals locally from other industries and trained extensively. Today, 95 per cent of employees and subcontractors are locals. The target is to make Andritz Uruguay S.A. a completely local company as quickly as possible. With the ongoing maintenance program, Andritz and Botnia will continue to have a close working relationship – one built on trust and partnership.

Contact Andritz at its Graz (Austria) headquarters by calling +43 316 6902 0 or by sending an email to [email protected]. The company’s online resource can be found at www.andritz.com Botnia 1.1:Layout 1 28/1/08 11:07 Page 86

Powerful Solutions

wiss based power and automation technologies multinational ABB is one of the world’s leading engineering concerns. The company offers a comprehensive range of products, systems and Sservices to clients around the world and helps its customers to use electrical power effectively and to increase industrial productivity in a sustainable way. Well used to occupying the position of technology leader, the ABB Group today operates in around 100 countries (including Uruguay, in Montevideo) and employs more than 100,000 people. Earnings in 2006 totalled a very impressive US$24.4 billion. The ABB brand is a mix of illustrious history, market-leading products and extensive technical expertise. This company, one of the largest names in the business, can trace its roots back more than 120 years. Today the focus is on the development of even better technologies and services in line with

ABB its motto: ’power and productivity for a better world’. ABB has nine research centres, a staff of 6,000 scientists and 70 university collaborations around the world. All work to develop its five main 86 businesses: Power Products, Power Systems, Automation Products, Process Automation and Robotics.

ABB Pulp and Paper ABB’s Pulp and Paper Business Unit delivers solutions and services for the pulp and paper industry around the world. The main solutions include drive systems, automation systems, quality control and web imaging systems, electrification, instrumentations, chemical delivery systems, collaborative production management solutions and composite plant solutions (big integrated packages), as well as services to the industry. More than 2,000 dedicated specialists in around 40 countries solely serve the pulp and paper industry. To cater for the global business of pulp and paper, ABB has eight Centres of Excellence (CoE). Four of these technologically advanced facilities are situated in Finland, including the Electrification CoE in Vaasa and the Paper Machine Drives CoE in Helsinki. Botnia 1.1:Layout 1 4/2/08 11:04 Page 87

Below left: ABB’s drives product range is a ABB and the Botnia Mill reference for drives users around the world Botnia recognised the need to establish a dependable and safe electrification supply at its new Fray and signifies reliability, simplicity and Bentos pulp mill. ABB was the natural choice. The ABB delivery covers equipment, engineering, flexibility. Above: Medium Voltage Gas- Insulated Switchgears project management, installation supervision, start-up and training. ABB’s Vaasa and Helsinki factories in Finland planned, produced and delivered all the systems. ABB electrified the entire pulp production process, from wood handling to pulp drying and baling. The electrification system contained a considerable amount of hardware, such as 10 kV switchgear and low voltage switchgears, motor instrumentation, low voltage instrumentation, frequency converters and factory motors. About 2,000 motors were installed, delivering some 120 MW of power – the equivalent of 10,000 private houses with electric heating. The voltage distributed in the process is 690V. The electrification system is cost-effective and safe to the user. A drive system ABB was also delivered to two pulp drying machines. The system entity contains software, motors and frequency converters. 87

Economically and Technically Tailored Profitability, functionality, quality, reliability and environmental compatibility are the five major customer needs to which ABB offers best electrification solutions. Pulp and paper mills consume, but also produce lots of energy. Good quality electricity is a key requirement, ensuring that the mill process always runs smoothly. In this respect, fully functional design and dimensioning of the various voltage levels of an electrical system is vital, including cablings, earthing and installations. Unnecessary overdimensioning will lead to expensive investments and extra losses. ABB implements an average of two paper machine (PM) drive systems per week, on time and to the highest quality. Its PM Drives Network – and years of experience and expertise in paper machine drive solutions – makes this possible. Solutions are standardised, which benefits both the customer and the supplier. Global application standards constitute the bulk of the network and the know- how contained in these standards is applied effectively. The project service must be timely and reliable; good communication and coordination skills are invaluable qualities in any project team. ABB established a dedicated project team for the Botnia mill, led by Project Manager Timo Huhtamäki from Vaasa. This experienced team carried out the Electrification Project from engineering to installation supervision in Finland and Uruguay. 10kV switchgear (six cubicles) was installed, including a starter transformer and an earthing resistor and rectifier and battery rack. The 400V and 690V Motorised Control Centres (MCCs) and busducts called for: 75 MCCs and four VSD field cabinets; 3,500 motor starters and power feeders; frequency converters (234 pieces); stand-alone (74 pieces) and busducts (51 pieces). Other deliveries included two 10kV motors, LV motors, LV motors (1,173 pieces) and 52 sectional drives. “The project was completed on time and to the required quality standards,” ABB’s Timo Huhtamäki explains. “The bespoke electrification systems and equipment installed, which utilise advanced and tried-and-tested technologies, have been designed and engineered to minimise potential disruptions and to deliver appropriate, efficient power on a consistent, predictable basis.”

Discover more about ABB and its many areas of expertise online, at www.abb.com. The company’s pulp and paper solutions can be found at www.abb.com/pulpandpaper. The website’s ‘Where to find us’ section includes relevant contact details for ABB offices around the world. Botnia 1.1:Layout 1 28/1/08 11:07 Page 88

Integrated Automation

rocess and business optimisation solutions for the entire pulp mill, supplied by the world leader in automation – Honeywell. For Botnia’s new pulp mill in Fray Bentos, Honeywell was Pchosen to supply the entire automation system for the one million tons per annum bleached eucalyptus pulping operation. Honeywell will help Botnia to ensure environmental compliance and maximise profitability with a mill-wide automation solution, including the Experion® Process Knowledge System (PKS), asset management tools, pulp machine quality control and business optimisation solutions. “Botnia wanted to equip the mill with the very latest technology to ensure minimal environmental emissions, outstanding production efficiency and optimal pulp quality,” says Botnia Project Manager Jouko Kotilainen. “We chose Honeywell to supply the automation system because

HONEYWELL of the company’s extensive portfolio of products and services, and its in-depth expertise in modern pulp processes.” 88 Botnia had worked with Honeywell on several projects in Europe, so it was confident that Honeywell could deliver a project of this magnitude, as well as continually optimise performance of the automation system after installation, utilising the strong service organisation at the Buenos Aires Center of Excellence in South America. Honeywell Process Solutions, part of Honeywell’s Automation and Control Solutions division, helps customers improve business performance with solutions that drive safety, reliability and efficiency. Honeywell helps customers manage their entire operation, from construction through long-term support and optimisation with unmatched domain expertise and global support in 90 countries. Key markets that Honeywell serves include oil and gas, hydrocarbon processing, power generation, pulp, paper, printing, continuous web solutions, chemicals and petrochemicals, life sciences and metals, minerals and mining. Botnia 1.1:Layout 1 28/1/08 11:07 Page 89 HONEYWELL

Botnia technicians utilising Honeywell’s Honeywell provides the knowledge to integrate project management, operations, automation, 89 advanced technology solutions to monitor information management and maintenance in a safe and secure environment. With enabling the mill’s start-up phase. Below left, innovative technology and services, the company’s strategy goes beyond reducing project risks and Honeywell C-300 cabinets in the rack room compressing schedules; it extends into optimising the entire operation, business performance and automation lifecycle. Honeywell’s Greenfield strategy as a main automation contractor integrates safety, process and advanced solutions for a smoother start-up and faster results. By helping Botnia reduce overall project risk, accelerate production schedules and improve operational efficiency, Honeywell delivered the best total lifecycle value for their pulping automation investment. Honeywell solutions are helping Botnia achieve benefits not only during the project start-up, but also during ongoing operations. Benefits extend into optimising the process and business performance over time.

In Detail The turnkey pulp mill automation system that Honeywell designed for Botnia includes Experion, which transforms process control beyond traditional Distributed Control System (DCS) functionality by unifying people with process variables, business requirements and asset management. It collects and integrates process and business data across the entire facility, making information and knowledge available where and when needed, so operators can make the right decisions quickly. Honeywell is also providing an Experion system for Kemira, which manufactures pulp chemicals on site for Botnia. For the two pulp drying lines, the control system includes the latest Honeywell Quality Control System (QCS) with the new ProFlow Cross Direction (CD) actuators and control package for basis weight and moisture control. Using fast-action, real-time cameras, Honeywell’s ProWeb monitors the moving web to detect defects and increase uptime. For mill-wide integrated process and business information management, the process and quality data is linked to Honeywell’s business optimisation package OptiVision™ with Quality OptiMiser and the process historian Uniformance® PHD. Honeywell offers all of its customers a full range of global support services, including remote services, to ensure immediate system diagnostics and preventative maintenance. This not only assures that the installation is executed with precision, but it also enables ongoing performance optimisation over time. Botnia 1.1:Layout 1 28/1/08 11:07 Page 90

Views of the continuous digester and immense fibre line at Fray Bentos. Right: the first pulp emerges from the drying machine; mill technicians look on (far right) HONEYWELL

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The Honeywell business and process optimisation solutions also include other integrated components to enhance:

Safety and Security • Failsafe Controller (FSC) for the critical safety controls and emergency shutdown purposes • Notifier fire detection system • Comprehensive training capabilities with UniSim® simulation technology • Distributed Server Architecture enables secure mill-wide communication yet allows the system to be unlimited in size • Sophisticated alarms and events monitoring, which helps to detect and prevent incidents HONEYWELL Reliability • Asset Manager in combination with Honeywell’s PKS Advantage Program, which integrates DCS 91 measurement, events and alarms to the actual plant assets to ensure high asset availability • Field Device Manager integrates the HART field instrument maintenance to the engineering environment • Honeywell’s Lifecycle Management (LCM) program gives Botnia a fixed cost, but a flexible program to meet long-term needs • System foundation is patented Fault Tolerant Ethernet (FTE) and redundancy is designed into the communications, servers and controllers • The eServer allows performance to be monitored remotely, to optimise benefits over time

Efficiency • Dynamic Loop Descriptions assist operators to quickly solve process or machinery disturbances • WorkCenter desktop for process, laboratory and third-party data integration • Aftermarket software upgrade, on-site support and remote services to maximise the value of the investment over time

Quality • Honeywell QCS, including CD controls, web monitoring and advanced pulp drying applications assure final product quality as well as improve production • Honeywell’s pulp mill Quality Tracking application for accurate ‘wood to pulp’ production line quality management • OptiVision with Quality OptiMiser and Uniformance PHD link process and business information together for better decision making

This totally integrated system from Honeywell will maximise process and system reliability, increase quality and efficiency and ensure safe operations. The advanced control, quality control and interface to business systems will drive product quality and customer satisfaction, making Botnia Fray Bentos a world-class supplier of eucalyptus pulp.

To get in touch with Honeywell Process Solutions, call +1-602-313-6665 or +1-877-466-3993. Comprehensive information about Honeywell, its many business areas and technologies, is available online, at www.honeywell.com/ps Botnia 1.1:Layout 1 28/1/08 11:07 Page 92

Call in the Air Force

hen it came to choosing the right supplier to design, manufacture and install bespoke HVAC and ventilation systems for the Uruguay Project, Botnia made the natural choice Wand opted for the global market leader, Brunnschweiler. Brunnschweiler has been developing and manufacturing the most advanced drying and ventilation techniques for the paper, tissue, board and pulp manufacturing industries for more than 50 years. Today, everyone who works in the pulp and paper sector appreciates the impressive extensive aerothermic experience and unique process know-how that come as standard with the Brunnschweiler name. Botnia is just one of the many pulp and paper heavyweights around the world that take advantage of Brunnschweiler technologies at their processing facilities. In March 2006, the company

BRUNNSCHWEILER approached Brunnschweiler to supply the HVAC systems and ventilation systems for the ‘Orion’ project at the Fray Bentos plant. The HVAC systems contract covered the electrical and special rooms, 92 as well as the ventilation systems for the turbine halls. The order soon increased in scope, to include the supply of the HVAC systems for the chemical plants at Botnia’s ‘Eagle’ and ‘Hawk’ projects, both at Fray Bentos, and the supply of piping for all three projects’ HVAC systems. The first move was to get in touch with Pöyry. Brunnschweiler often develops projects in partnership with the highly regarded Finnish engineering company – previous collaborations include the vast Soporcel Project in Portugal. Pöyry’s expertise would help Brunnschweiler deliver just the right technological solutions for Botnia. The Brunnschweiler Group headquarters in Munguía (Spain) developed the technical and operational management issues, which involved a large proportion of the technical, logistics and manufacturing staff. The lion share of important equipment, including the air handling units, chillers, chemical filters and pipes, came directly from Brunnschweiler’s European facilities, carrying the CE quality symbol. Brazilian group member Brunnschweiler Latina, located in Marilia (São Paulo), also supplied a wide Technical illustration of the HVAC System variety of vital components, such as ducts and supports. In total, 100 containers arrived from Europe for the Electrical Rooms of the Raw Water and 30 came from Brazil. Pumping facility This method of supply guaranteed the temperature conditions and air quality inside the many different rooms of the Fray Bentos plant building (special rooms, electrical and cabling rooms). Although the HVAC systems do not impact on pulp production directly, they are necessary to avoid potential fires and inadequate operation at the electrical and control halls, which would naturally harm production. The chemical filters play an extremely important role, capturing the various chemical agents that linger in the regeneration air and threaten to damage the electrical equipment. The make-up units provide a reliable supply of fresh air to the halls, while the air-handling units ensure optimal temperatures throughout. An air exhaust system has also been installed in case of fire. A fire-fighting system connected to the plant’s DCS detects fires and automatically triggers the air exhaust fans, which disperse fumes quickly and efficiently. The entire system is now fully checked and ready for operation. Brunnschweiler is proud of its positive contribution at Botnia’s Fray Bentos pulp mill facility. Thanks to a dynamic expansion policy, the Brunnschweiler Group now has production facilities on five continents. The Botnia Project confirms the company’s capacity to complete projects of this scope all over the world. Botnia 1.1:Layout 1 4/2/08 11:05 Page 93 BRUNNSCHWEILER 93

Clockwise from top left: Turbine Hall Group Techniques Ventilation System; Turbine Hall Exhaust Combining an impressive pedigree and a proven ability to create market-leading drying and System; typical Ventilation Room; typical ventilation techniques, Brunnschweiler is one of the world’s leading specialists in the aerothermic MCC Room HVAC System; inside a typical Chillers Room field of the pulp and paper industry. Today, the Brunnschweiler Group has some 400 employees and a truly worldwide footprint. In addition to its headquarters in Munguía (Spain), the group has state-of-the-art factories in Burgos (Spain) and Marilia (Brazil), and has recently founded two new companies, in Shanghai (China) and Memphis (USA). The need to innovate and develop even more efficient technologies explains why Brunnschweiler focuses so strongly on R&D activities. New solutions, developed to keep ahead of the market, are checked in a pilot machine at more than 1000 m/min, to improve the performance of every product: Closed Hoods; High Velocity Hoods; Stabiliser Blow Boxes; Deflectors and Circular Dryers; Dust Removal Systems for Tissue and Converting Mills; Hall Ventilation Systems; and Steam and Condensate Systems. Technological skills and material science knowledge combine with a customer-orientated design approach at Brunnschweiler. Innovative, high-efficiency solutions for the pulp and paper industry are particular specialities and the ultimate goal is to provide the very best installations and service, and to fulfil each and every customer requirement.

The Brunnschweiler website www.brunnschweiler.com contains a wealth of useful information about the company, its expertise and product range. To contact the company at its Munguía headquarters in Spain, call +34 94 674 1962 or send an email to [email protected] Botnia 1.1:Layout 1 28/1/08 11:07 Page 94

The Right Chemistry

emira’s chemical island in Fray Bentos is a comprehensive product and service solution, providing Botnia’s adjacent pulp mill with all the chemicals it needs: chlorine dioxide, oxygen Kand hydrogen peroxide. The sodium chlorate unit produces the chlorine dioxide plant’s raw material. Kemira will supply all of the chemicals used in the pulping process at the Botnia mill and has invested more than €80 million in the construction of a separate ‘chemical island’, about eight hectares in size, on the Botnia size. The company employs around 45 people at the facility. Best available technologies are used in the construction of every Kemira chemical plant. The plants fulfil all European environmental norms and quality standards. Each facility is designed according to Kemira’s own process know-how, for the most part, with mostly Finnish engineering and design having been implemented. KEMIRA

94 One Source Kemira Pulp & Paper’s chemical project is a completely new concept and powerful proof that customers appreciate the possibility of buying all bleached chemicals necessary for pulp production from a single supplier. All of the chemicals that Botnia needs at its Fray Bentos pulp mill passes through Kemira, which also produces most of the necessary chemicals on site. In this way, the entire chemical process is in Kemira’s hands, while the customer can be sure that exactly the right chemicals will be supplied, at the right time, and piped directly into the customer’s own production process. Botnia 1.1:Layout 1 28/1/08 11:07 Page 95

Kemira’s facility, located within the pulp Environmental risks in delivering the chemicals can be effectively avoided, since the system is mill site, provides the chemicals that Botnia closed and integrated with pulp production and the pipes carrying chemicals are directly connected needs in order to produce high-quality to the mill. Kemira’s solution of piping all necessary chemicals directly into the production process market pulp. The focus is on efficiency, safety and environmental responsibility is a world first. The goal is to enable Botnia to see how it can further improve its pulp production by using chemicals tailored specifically to the process. By outsourcing chemical supplies to Kemira, Botnia can concentrate on its core expertise, without suffering the delays and logistic problems normally caused by chemical deliveries. Kemira not only sells products; it also offers solutions suited to the overall operation and products that always provide maximum cost-effectiveness.

Chemical Island KEMIRA Sodium chlorate plant 60,000 t/a Chlorine dioxide 10,000 t/a 95 Hydrogen peroxide 16,000 t/a Oxygen 65,000 t/a

The sodium chlorate technology is the result of Kemira’s development efforts and brings together the best technical features of the different Kemira plants around the world. The electrochemical process, which uses salt, water and electricity, has a high energy demand. Botnia, fortunately, is not only self-sufficient in its electrical energy, but actually has a surplus, which Kemira will use. Botnia’s biomass-based energy generation facility will normally be able to cover demand. Sodium chlorate will be used as raw material in the chlorine dioxide production and the surplus will be exported. The chlorate plant will also generate hydrogen gas, a by-product, which Botnia will use as a fuel and as a raw material in Kemira’s hydrogen peroxide plant. The chlorine dioxide technology, R11, has been acquired from Erco Worldwide-Canada, one of the world’s biggest suppliers of chlorine dioxide. Raw materials are on-site produced sodium chlorate and hydrogen peroxide and imported sulphuric acid. Botnia will use a solution of chlorine dioxide in the ECF bleaching of chemical pulp. The hydrogen peroxide technology is Kemira’s own and brings together the best technical features of Kemira’s existing HP plants. The process is known as an auto- oxidation of anthraquinone process and uses oxygen, hydrogen and a so-called ‘working solution’ as raw materials. Hydrogen and oxygen are produced on site. Botnia uses the end product, hydrogen peroxide, in the bleaching process; Kemira uses it as a raw material for chlorine dioxide. Praxair (White Martins), which delivered the oxygen plant at the Fray Bentos site, is one of the leading suppliers of oxygen. The generation of oxygen is based on the cryogenic process and the raw material is air. The plant is a turnkey delivery with a long-term contract for the oxygen supply. Praxair will operate the plant and monitor its future activities from the company’s headquarters in Rio de Janeiro, Brazil. Some 15 other chemicals are imported to complete the palette needed for chemical production and ECF bleached pulp production. Two of the most prominent raw materials of these chemicals are sodium hydroxide and sulphuric acid. The chemical island has two 4,000 cubic metre storage containers for sodium hydroxide and two 2,000 cubic metre storage vessels for the sulphuric acid.

To get in touch with Kemira Uruguay S.A., call +598 2 916 98 19. Discover more about Kemira online, at www.kemira.com Botnia 1.1:Layout 1 4/2/08 11:06 Page 96

Clearly Purified

egrémont is a world leader in the water treatment sector, an experienced frontrunner in such high technology businesses as the production of drinking water, desalination by reverse Dosmosis, wastewater treatment and sludge treatment. The company specialises in the design, build and, if necessary, operation of turnkey plants that are specially suited to customers’ individual system requirements. Rich in knowledge, experience and technical know-how, Degrémont aims to achieve a continual improvement in the performance, reliability and competitiveness of its plants and technologies. To help clients obtain the best project at the best prices, Degrémont has set up a global approach to its resources: sales, marketing and execution are carried out as close as possible to the clients’ sites; expertise and networked design are available on a truly worldwide scale.

DEGRÉMONT Making water drinkable, whatever the initial quality of the resource, is a Degrémont speciality. Its credentials in the field of wastewater treatment (safety, flexibility, pollution control) are second 96 to none and, as a result, always much in demand. To date, Degrémont has built 2,500 purification plants for urban wastewater around the world, with sufficient capacity to serve populations of between 10,000 and 1.2 million people. Pollution control requires the ability to ensure complete safety 24 hours a day, in compliance with the strictest of standards, and great operational flexibility, to face up to variations in volume linked to seasonal demand or extreme weather conditions. Degrémont supplied three separate plants to the Botnia Fray Bentos mill site in three different contracts: the water treatment plant (WTP); demineralised water treatment plant (DWTP) and effluent treatment plant (ETP).

Water Treatment Plant The WTP that Degrémont installed for Botnia S.A. has a total hydraulic maximum capacity of 1,720 l/s. The raw water coming from the water intake receives chlorine dioxide as pre-oxidant on the suction side of the raw water pumps. Water is initially conducted to the cascade to oxidise iron, manganese and organic matter. Caustic soda is then added to the liquid when it enters the WTP – pre-alkalinisation and pH adjustment ensures proper iron and manganese oxidation and optimum flocculation. Chlorine dioxide is dosed at this point (into the first step of the cascade) to enhance the removal of iron and manganese at the right pH. The hydraulic jump promotes the quick mixing of an introduced coagulant (aluminium sulphate). In the last cascade step, the pH value is adjusted as necessary, using

a NaOH or H2SO4 dosification, the chemicals coming from the mill network. Water is conducted directly from the partition chamber to three clarifiers (pulsators). Normally, all units will be in operation. In the clarifier, the sludge settles to the bottom of the tank, which allows clarified water to be collected from the surface. Settling is enhanced using ‘lammelas’ and clarification is enhanced using a suspended sludge blanket, made by water level change using a vacuum. The partition chamber also includes an efficient turbidity instrument and a temperature measurement device, both of which monitor the quality of the raw water.

Settling The flocculation-settling system installed is based on the ‘Pulsatube’ clarifier with three units (each has a surface area of 271 square metres). This high performance equipment carries out both Botnia 1.1:Layout 1 4/2/08 11:07 Page 97 DEGRÉMONT 97 Looking down over the Fray Bentos pulp flocculation and settling in a single equipment. The flocculated sludge blanket is maintained under mill, with Degrémont’s effluent treatment permanent and homogenous expansion in the lower part of the unit (flocculation area) with quick plant in the foreground. Opposite page: A discharge phases. A centrifugal fan sets the vacuum at the vacuum chamber. view of the inlet water (cascade) and the Pulsator units at the water treatment plant Contact with this active sludge area and its reagents will cause the raw water flocculation process. The water and activated sludge are in contact for a long period. As a result, the process efficiently eliminates smells, tastes and colour. As flocculation is completed, the reagent consumptions are limited to only minimum quantities. The great uniformity in raw water distribution at the bottom of the equipment – added to the collection of clarified water on top – guarantees the equal and optimum performance of flocculation and settling on the entire surface. The high density of the sludge obtained allows for the adoption of high surface velocities and the high speeds at the bottom of the clarifier during the short water discharge phases cause the whole sludge bed to expand, preventing the formation of sediments at the bottom. Excess sludge is removed from the bottom, from sludge concentrators. Each unit has two sludge removal pipes and extraction valves.

Filtration Five filters of the Aquazur ‘V’ type (with surface areas of 93 square metres each) carry out the settling water filtration, after which caustic soda is injected (post-alkalinisation) for the effluent final pH adjustment. These filters, with a media of homogenous sand, are washed with a backflow of air and a water injection. A false bottom fabricated out of concrete tiles supports the filter, equipped with nozzles that enable the passage of the filters water and of the washing effluents, but prevent the escape of sand. The settling water is distributed to the filters by a frontal channel – submerged holes and weirs ensure a strict distribution – and enters each filter through a V-trough that ensures that the surface is scraped during the washing process. Settling water crosses the homogenous sand bed from the top of the filter to the bottom, to be gathering by a great number of nozzles (ensuring flow uniformity) inserted on a false bottom. Water entering into the filters battery, distributed equally, creates a level rise at the filter, proportional to its clogging. Gauges detect differences in level and send corresponding signals to start the washing sequence. Botnia 1.1:Layout 1 4/2/08 11:07 Page 98 DEGRÉMONT

98 Recycled cooling water from the 10 cooling towers and three microscreens enters in a channel The water treatment plant, with a view of in front of the firewater pumps pit. Chemically treated water coming from the filters and cooling the three vacuum chambers, three Pulsators and five sand filters water coming from the Micro Screen (three units) compound mix in this channel. The mill water will be directed to the fire pumps pit and the mill water tank Degrémont supplied the whole engineering project at Fray Bentos (both basic and detailed) regarding the mechanical equipment and pipes materials. Mechanical erection works were also included in the scope, as was operator training and supervision of works, the latter consisting of coordination, installation, manufacturing of equipment, commissioning, quality control, inspection, tests and start up.

Demineralised Water Treatment Plant The object of the DWTP that Degrémont supplied for Botnia is to produce demineralised water to feed distinct units of the mill. The water feed to the DWTP comes from the mill’s water treatment plant (above). Degrémont provided complete engineering services (basic and detailed) covering the provision of mechanical equipment and associated equipment, along with the full range of mechanical erection works, supervision and operator training. The demineralisation system consists of primary demineralisation and a polishing stage. The primary chain encloses three parallel trains (composed of Cationic Exchangers and Anion Exchangers; each vessel has a two metre diameter). Each train is designed for 50 per cent capacity of Plant Production (46 l/s). During normal operation, two chains will be working and one will be in stand- by mode. The polishing, composed of two parallel Mixed Bed Ion Exchangers, follows primary demineralisation. Each mixed bed is designed for 75 per cent capacity of Plant Production (69 l/s). When one of the mixed bed exchangers is regenerating, the other operates at full capacity. The maximum designed net flow is 92 l/s.

Effluent Treatment Plant The Effluent Treatment System consists of a highly efficient biological treatment process that utilises Activated Sludge. Its purpose is to eliminate both fine and coarse solids and to remove the organic Botnia 1.1:Layout 1 4/2/08 11:07 Page 99

Above: The resin exchangers at the matter present in both industrial and sanitary wastewater. Degrémont’s installed ETP system consists demineralised water treatment plant. of the following treatment phases: Above right: Effluent treatment plant; view of the Primary clarifier in the foreground and the three Equalisation basins Primary Treatment • Neutralisation of the low solid load wastewater (low concentration of solids) • Removal of high solid load wastewater (Primary clarifier). One unit was delivered, with a diameter of 46 metres • Wastewater equalisation system – three units (volume: 25,000 cubic metres per unit) • Cooling towers (five units) and neutralisation of the equalised wastewater

Secondary Treatment DEGRÉMONT • Aeration tanks used as biological reactors – two units (volume: 75,000 cubic metres each) • Secondary decantation – two units (diameter: 65 metres) 99 • Processes of recirculation and excess sludge extraction • Nutrient dosage

Sludge Treatment • Sludge mixing – primary sludge, part of the biological sludge and floating material from the secondary decanter • Sludge dewatering using a dewatering press – primary sludge • Sludge thickening using a filtering table and centrifugal dewatering – biological sludge

The wastewater generated by the plant is separated into three distinct groups, namely: (1) low load wastewater, with a low concentration of solids; (2) high load wastewater, which has a high concentration of solids; and (3) sanitary wastewater. Industrial wastewater undergoes specific pre- treatment before being sent to the equalisation process of the plant, namely: neutralisation for low load wastewater and coarse/medium grading and decantation for high load wastewater. Degrémont supplied the entire engineering project for the ETP (basic and detailed) regarding the mechanical equipment and pipes materials. Mechanical erection works and supervision were included in the scope of works (coordination, installation, manufacturing of equipment, commissioning, quality control, inspection, tests and start up). Finally, Degrémont was on site to carry out extensive operator training.

Hydraulic treatment and pumping capacities at the ETP Item Unit Average Max.per day Max.Hydraulic capacity Low solid load wastewater l/s (m3/d) 520 (45,000) 870 (75,000) 920 High solid load wastewater l/s (m3/d) 260 (22,500) 435 (37,500) 470 Equalised wastewater l/s (m3/d) 780 (67,600) 1,155 (100,000) 1,400 Sanitary wastewater l/s (m3/d) 0.9 (75) 1.05 (90) 10

Degrémont is headquartered in Ruel-Mailmaison, France, but active worldwide. The company’s international website is www.degremont.com. To get in touch with Degrémont in France, telephone: +33 1 46 25 60 00. The company has a strong South American presence. The telephone numbers are: Argentina: +54 (11) 5371 2200; Chile: +56 (2) 430 6734 and Brazil: +55 (11) 3897 1800 Botnia 1.1:Layout 1 28/1/08 11:08 Page 100 MARKETS

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CHAPTER 08 The Paper Trail

book tightly shut is but a block of paper, an old Chinese proverb tells us – the relationship Botnia FRB Euca: Properties between the final product and the basic materials it took to create is inescapably close. To Athe uninitiated, paper might look just like paper (and tissue like tissue, board like board Brightness, % ISO ISO 2469/2470 90±1 and so on), but the reality is that there’s a world of difference, that all paper products are unique Impurities, mm2/kg ISO 5350-2 ‹5 and that every grade is specifically formulated so that it perfectly fulfils its particular intended use. pH ISO 6588 5-6.5 It’s this unbreakable bond between the characteristics of the pulp raw material and the exact Fibre length, mm Fibre Lab 0.65-0.8 qualities of the paper, tissue or board end product that inspires manufacturers in China, Europe and around the world to hunt for the highest quality pulp grades, specifically those that offer optimum refining capabilities. Botnia had just such attributes in mind for its new Uruguayan eucalyptus raw material base, ‘FRB Euca’, a product specifically intended to complement its portfolio of specialised Scandinavian fibre MARKETS grades and give the company a complete pulp palette. Instead of targeting specific individual characteristics, which would inevitably limit the market, the goal was to produce a superior quality 101 pulp of even quality and high flexibility. FRB Euca, a blend of mainly Eucalyptus grandis and Eucalyptus dunnii raw materials, is carefully engineered to suit the fast-growing international market for short-fibre pulp, and to be easily processed into high-quality coated and uncoated woodfree papers and tissues. At a very early stage in the project, samples of Forestal Oriental stock from several different plantations were transported to Botnia’s Finnish facilities and blended for laboratory and full mill Opposite page: the first shipment of FRB scale tests. A shipment of test pulp arrived in UPM-Kymmene’s Changshu paper mill, China, in the Euca is loaded onto the ‘Swift Arrow’ for autumn of 2005 for a weeklong test run. The test euca pulp performed well when transformed into transport to Vlissingen in The Netherlands. coated fine paper. Below: pulp bales are loaded onto a push barge at the Fray Bentos port terminal Botnia knows a thing or two about paper, of course, which explains why its first foray into the eucalyptus pulp sector has been such a solid success. Botnia’s R&D teams in Europe and China listened carefully to what existing and potential customers were saying and established a spirit of in-depth cooperation throughout the blending and refining process. The end result is a superior and extremely flexible pulp product that ensures consistent quality, an enhanced visual outlook and excellent printability and paper machine runnability. The benefits for fine tissue usage are just as impressive: improved softness, superior absorption and processability, and a whole lot more. Every bale of pulp that emerges from the Fray Bentos fibre line has all these qualities firmly ingrained in its DNA.

Ship Shape Although Uruguay has plenty of advantages to offer international pulp manufacturers, proximity to major markets is not one of them. This is not an insurmountable problem, of course, but Botnia needed to come up with an efficient transport and logistics chain – to establish freight transport solutions that assure predictably fast and cost-effective delivery times – in order to satisfy its customers in Europe and China. The solution that Botnia settled on was a two-phase shipping process: (1) loaded push barges leave a purpose-built port terminal at the Fray Bentos pulp mill site and head approximately 70 kilometres downriver to a much larger logistics facility at the Port of Nueva Palmira for (2) cargo transfer from river barge to ocean-bound vessels and transatlantic shipment to a selection of international ports. Botnia 1.1:Layout 1 28/1/08 11:08 Page 102

Impressions of Terminal Ontur. Clockwise from far left: looking down the Río Uruguay with Ontur in the foreground; President Tabaré Vázquez and Ronald Beare at the official unveiling ceremony; unloading pulp bales from one of the river barges ready for loading onto the ocean- going Swift Arrow MARKETS

102

First, let’s examine the Fray Bentos port terminal. Botnia decided to create a fairly compact facility, with a storage capacity of 3,000 tons of pulp, or one day’s production, and to purchase four 88-metre-long push barges – two from Montevideo’s Tsakos Industrias Navales S.A. (TIN) and two from the Uruguayan Navy, Armada Nacional. TFF-1, TFF-2, TFF-3 and TFF-4 (the TFF, incidentally, stands for Transportes Fluviales Fray Bentos) will each ferry 3,500 tons of wood pulp at a time downriver to Nueva Palmira. First, each enters the covered port terminal for fully sheltered loading in controlled conditions. Botnia faced a much bigger task to build a functional export capability at Nueva Palmira, Uruguay’s second largest port, 270 kilometres west of the capital in the department of Colonia. Ambitious as always, the company envisaged the creation of a bespoke freight handling port facility alongside Nueva Palmira’s existing export business, which primarily handles lumber, citrus fruits, cereals and solid bulk. And Terminal Ontur was born. First, a company had to be set up to operate the prospective export facility. Botnia took the lead and a 40 per cent share in a brand-new venture, Ontur International S.A., alongside Uruguay’s Ontemar and Christophersen S.A. (18 per cent and 14 per cent respectively), and the Sweden-based Botnia 1.1:Layout 1 4/2/08 11:11 Page 103

Sea Routes from Nueva Palmira to China & Northern Europe

Route to Northern Europe Approximately 20 days

Route to China Approximately 45 days MARKETS 103 Above: the two primary shipping routes NYK Lauritzen Cool and Swedfund International (14 per cent each). Construction of a 30,000-square that Botnia cargoes will take on their way metre covered warehouse commenced in 2006 and the harbour was enlarged to facilitate pulp to international markets. Below: loading deliveries. Officially inaugurated by Uruguay’s President, Tabaré Vázquez, on 29 August 2007, the pulp at Nueva Palmira US$23.7 million facility can store up to 100,000 tons of pulp and load large shipments onto large ocean-going vessels as and when required.

Passing the Test Now came the time to test run the logistics chain. The first barge – laden with 1,000 tons of FRB Euca – left Fray Bentos for Terminal Ontur on 15 November 2007 and arrived at its end destination eight hours later. “This is an historic moment for our terminal,” General Manager Raúl Souza noted as the barge was carefully unloaded. “The Botnia plant in Fray Bentos is our country’s most important investment, for which we have built the biggest warehouse in all of Uruguay.” Three weeks later, the 19,000 tons that had been accumulated at Terminal Ontur were reloaded onto an ocean-going vessel specially built for transporting pulp bales, the Bahamas flagged ‘Swift Arrow’. It was the first shipment, so it took longer than expected to load. On 8 December, the vessel set sail for the Dutch harbour of Vlissingen, its valuable cargo destined for paper production in Europe. Botnia FRB Euca is already in hot demand. Now that the Fray Bentos pulp mill is producing more than 2,500 tons of cellulose pulp a day, cargoes will start to leave Uruguay for Europe and China on a regular basis. The pulp will be allocated between a wide selection of mills that major international papermakers operate across the continents, so shipments will need to be undertaken on an ad hoc basis. “In Europe we can’t just pick the port and say that the pulp from Uruguay will come there,” says Eero Mäntylä, President of Botnia Pulps GmbH. “If a customer wants pulp at, say, his mills in Scandinavia and in the Mediterranean, we need an idea of the volumes, so that we can plan the logistics chain.” That chain is now tried-and-tested, flexible and functional. All the links are complete as they were originally envisaged. Botnia can speak with confidence about its control over the complete pulp manufacturing process, starting with seedling production at the San Francisco Nursery and ending at Terminal Ontur, from where the ‘Swift Arrow’ has just left for Europe. Looking back, it’s easy to see this period as the moment of transition from fledgling enterprise to mature international business. For Botnia, the inaugural journey to Europe was a literal rite of passage. Botnia 1.1:Layout 1 4/2/08 11:12 Page 104

CHAPTER 09 Endings, and New Beginnings

he sienna shore of the Río Uruguay, or at least the stretch of it that hosts the port town of Fray Bentos, is a tranquil riverside backwater no longer. It’s a beautiful Uruguayan morning. We Tdrive back up the now familiar coast road, skirting the town to our right, follow the Carretera Puente-Puerto highway and take the turn off on Route 2, close to the Libertador General San Martín International Bridge, that leads to the mammoth mill site. The date is 9 November 2007, a Friday. It’s scheduled to be a historic milestone date in the timeline of Botnia’s Uruguayan pulp mill journey. One phase comes to an end (the build period) and another is augured in (production and delivery of Botnia’s FRB Euca to world markets). The start-up process will begin today. Just how exactly do you start such a vast mechanical process, we ask. You might imagine a particularly responsible technician stepping up nervously before a crowd of important international

SUMMARY dignitaries and gingerly pushing a large green ‘on’ button to start the series of vast machines. Lights flash, engines splutter and growl at installations around the site and the system is instantly up and 104 running. The reality could not be more different. Before the systems could be ‘switched on’ – and well before we arrived back at the site – 100 Botnia employees were separated into 25 teams and tasked with meticulously testing each and every piece of equipment – every pump, tank, pipe, valve, motor, join and cable. The smallest mechanical part, if defective, could disrupt the entire process. So nothing could be left to chance. The next step was to carry out so-called ‘water runs’ (flushing the systems with water heated to the operating temperatures that the actual process will require) and thereby detect any possible leakages. No such defects were identified; the machinery all fulfilled their proper functions. With the Opposite page: finished pulp bales emerge preliminary tests completed, everything was ready for the start-up proper. For nine weeks prior to from the drying and dewatering plant 9 November, all Botnia required to set the mill in motion was the official go-ahead decision from the during the system start-up phase. Below: traditional agriculture side-by-side with Uruguayan Government of Tabaré Vázquez. modern industry in Fray Bentos A sudden and unexpected aftershock in the long-running Argentinean dispute: the Spanish Government of José Luis Rodríguez Zapatero urged Vázquez to delay his signature and offered to act as a mediator to settle the ongoing tensions between Uruguay and Argentina. It might have been just days before the intended start-up, but the prospect of ending the disagreement was naturally too tempting to ignore. As a result, the signature was stalled for almost two months. The delayed permit finally came through on 8 November 2007. Timo Piilonen and the Botnia team reacted fast, kicking off the start-up stage by stage. Machine suppliers and a team of more than 200 Uruguayan and Finnish technicians supervised the process. The first goal was to activate the entire system, from the woodyard at the start of the technology chain to pulp baling at the end. Only when all the equipment was operational could tweaks, adjustments and refinements be made to optimise performance. First, the drying machine was started up – pulp bales bought from other mills and pulped in water substituted for locally produced pulp in the early hours – the recovery boiler was turned on – initially using fuel oil to generate high- pressure steam energy and warm up the different process areas – and the chemical solution was prepared in sufficient quantities for cooking. Gradually, heat built up in the digester. On Saturday morning, 10 November, the gauges finally displayed the right internal temperatures for cooking and the first chips were rushed in. Biomass energy came on stream two days later and the first pulp bales were produced within hours. On 18 November, three days after the mill’s first 1,000 tons of pulp arrived at Nueva Palmira, Botnia reported excellent progress on its website and announced a daily output at Fray Bentos of 2,000 tons of superior quality pulp. “The start-up has gone better than at any of the other mills at which Botnia 1.1:Layout 1 28/1/08 11:08 Page 105 SUMMARY 105 Botnia 1.1:Layout 1 28/1/08 11:08 Page 106

Revisiting the Good Times “The main job of the project team is to make themselves unnecessary,” announces Fray Bentos Mill Manager Sami Saarela in the Spring 2005 issue of ECHO, Botnia’s customer magazine. Most support staff, he says, should be able to go home six months after the start-up phase. After a year of continuous operation, all of the Finns will step aside, moving into advisory and development roles. After two years, the mill will be a stand-alone Uruguayan operation “like any other Botnia production unit, run by a well-trained, proudly professional team”. It’s a goal that fits perfectly with Botnia’s wider socio-economic strategy whose starting point is ‘we are a part of the community in which we operate’. So most of the personnel who will run the mill, the plantations and the San Francisco nursery are locally sourced and intensively trained. Today, their skill

SUMMARY sets match those of their Finnish counterparts. In real terms, though, the employment effects extend much further and those chosen to work for Botnia are not the only beneficiaries of the ‘Botnia effect’. 106 300 people will operate the mill, but the entire direct employment figure, including the forestry and transportation business, is estimated at more than 5,000 positions. And we should add another 3,000 names to the tally – those working for revitalised regional businesses (shops, markets, hotels and other services), who owe their jobs, at least indirectly, to the establishment of Uruguay’s first pulp mill on their doorsteps. In total, the operation will sustain 8,000 new jobs in and around the Río Negro department. As Governor Omar Lafluf puts it: “Improvements in people’s everyday lives can be seen everywhere.” Large-scale investments have the greatest potential to generate large-scale socio-economic rewards, of course, and they don’t come any bigger than Botnia’s US$1.1 billion Fray Bentos pulp mill in Uruguay. This, the biggest industrial investment in the nation’s history, is destined to push up GDP by US$200 million, or 1.6 per cent in its first year. In the Río Negro, GDP is set to rocket. Experts foresee that regional prosperity will increase by a full 50 per cent. If this were Botnia’s only positive contribution to Uruguayan society it would be impressive enough. In fact, the company intends to do much, much more. It wants to go beyond skills training and employment opportunities, aiming to treat employees and contractors fairly, to respect and sustain the environment and, perhaps most important of all, to act like a regional partner rather than just an employer. Symbols of social responsibility are already apparent, in such initiatives as FOMENTO (page 31) and the Botnia Foundation, or Fundacion Botnia in Spanish, which has a powerful and purely social purpose. The idea is to work in coordination with non-profit organisations and local stakeholders and, together, to promote long-term employment opportunities and training, and foster a culture of safe and healthy living. Early programs that have already been conducted include a rural education scheme covering five local departments and computer training in Fray Bentos, New Berlin and Mercedes. Two Botnia managers sit on the Botnia Foundation’s five-person board (Ronald Beare and Matthew Rivers). Agricultural engineer Roberto Symonds, one of the three external directors, has no doubt of the organisation’s worth: “If the foundation succeeds in promoting opportunities for employment within its sphere of influence, we can avoid migration and improve the living conditions and welfare of the people in their home districts,” he explains. Botnia 1.1:Layout 1 28/1/08 11:08 Page 107 SUMMARY 107 Botnia 1.1:Layout 1 28/1/08 11:08 Page 108 SUMMARY

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I have participated in the start-up process,” says Sami Saarela. For Ronald Beare, it was a moment Botnia will monitor every aspect of its of high achievement, a turning point in the histories of Botnia and Uruguay, its newest host: operations in Uruguay. Clockwise from top left: eucalyptus core samples are analysed at the San Francisco Nursery, impacts on This is the moment to thank all the people involved in transforming this project into reality. agriculture; analysis at the mill; cut-to- Especially it is a moment to thank the 7,000 workers who have participated in the length eucalyptus logs ready for chipping construction of the mill, the more than 1,000 professionals and technicians who developed the project and all the companies involved in the project. Without the efforts of all these it would not have been possible that there is today in Uruguay an operation of this magnitude. We are especially grateful to the community of Fray Bentos for their support and confidence at all times.

Interest in the facility amongst Fraybentinos had, of course, been intensive from the time that the designs were unveiled, and its completion was eagerly awaited. The community that had played such an important part in its construction – and, let’s not forget, in its continued operation – has benefited from Botnia’s decision to locate here for almost three years. New jobs, greater prosperity and a sense of freshness and excitement are the most immediate gains, although it is only now that the mill is making pulp that the depth of its socio-economic impact will really be felt. Surrounding communities in such areas as Paysandú, Soriano, Mercedes and Colonia are likewise reliving the good times (see pages 106-107). Indeed, the spirit of partnership fostered between Botnia and these communities has been one of the project’s most enduring accomplishments. Of course Botnia will not be resting on its laurels in the coming months and years. Now comes a period of even greater social and environmental responsibility, of scrupulously monitoring potential environmental impacts and delivering the modern, responsible operation that Botnia Botnia 1.1:Layout 1 28/1/08 11:08 Page 109

promised to create in Uruguay from the start. The mill was always intended to stand out from the crowd, utilising BAT to generate optimal process efficiency and environmental performance levels. So every impact and all performance attributes will be monitored on a solid, scientific basis, from air and water quality to noise, effluent discharges and any potential biological effects of the operation on flora and fauna. Botnia intends to undertake some analysis by itself and to collaborate in an extensive set of independent reviews with DINAMA, the Uruguayan environmental authority, and its environmental monitoring commission (Comisión de Seguimiento Ambiental). Equally significant is the all- encompassing Environmental and Social Action Plan (ESAP) that Botnia has prepared with the International Finance Corporation, in which future work is identified and deadlines for its completion are set. The ESAP guarantees the optimisation of technologies and socio-economic issues over time. Regular updates, which appear on IFC’s website resource (www.ifc.org), ensure that the plan remains comprehensive and relevant. For example, November 2007’s update outlines 16 key measures, including ‘Implement an Emergency Preparedness and Response Plan that applies to mill and supply chain operations’ and ‘Prepare and implement a detailed plan for conservation set asides required by DINAMA’. AMEC Forest Industry Consulting’s Pre-start-up Audit Report into the Fray Bentos mill was just one early outcome of the Botnia/IFC ESAP. It delivered independent confirmation on 6 November that the mill would operate in accordance with the recommendations set out in the final Cumulative Impact Study (CIS). Anyone who has visited the site within the last few months must surely share AMEC’s impression of a ‘well-designed and generally well-executed project, with competent and motivated staff. Modern process technologies are used that promise to perform with low emissions and world-leading environmental performance’. It’s soon perfectly apparent that Botnia has delivered just that. The mill is working well, exactly as envisaged. The original plan outlined on 7 March 2005 now exists in full scale. Such a lot has been achieved since then: a mature plantation business, mostly located within a 200-kilometre radius of Fray Bentos; a modern ECF pulp mill on the scrub shores of the Río Uruguay; a well-trained Uruguayan workforce that understands eucalyptus silviculture and the latest pulp production methods; an efficient transportation business that really delivers; a new pulp grade that has been specially formulated to satisfy existing and potential customers around the world; and the list goes on. Botnia should take great credit for its achievement. SUMMARY 109 Botnia 1.1:Layout 1 4/2/08 11:15 Page 110

Facts & Figures

Location: 4 kilometres east of Fray Bentos, Western Uruguay

Investment: US$1.1 billion

Financing: Ca. 60% as equity from Botnia and other stakeholders; ca. 40% debt financing through the World Bank (IFC) and other credit agencies, NIB and commercial banks

Capacity: 1 million tons of ECF bleached eucalyptus pulp/year (measured as air dried)

Wood Raw Material: 3.5 million cu metres/year of Eucalyptus grandis and Eucalyptus dunnii

Machinery Technology: IPPC-BAT – best available techniques with minimal environmental impact – ECF bleaching with hexenuronic acid removal

Main Suppliers: Andritz, Siemens, Degrémont, Kemira, ABB, Butting, DHL, Alstom, Brunnschweiler, Honeywell

Fibre Line: 3,200 ton/day digester with Lo-Solids® process resulting in high cooking

FACTS & FIGURES FACTS yield Two drying machines for continuous productivity; 3,600 admt/d capacity 110 Four baling lines

Chemical Recovery: Seven-effect evaporation plant 4,450 tds/d recovery boiler 10,000 cu metres/day white liquor plant

Energy Use: 165% self-sufficient

Construction in Figures Total Man-hours: 15 million

Total Cargo Shipped: 58,000 tons

Most People on Site: 5,300

Companies Involved: 64

Socio-economic Impacts Financial Impact: 1.6% increase in Uruguay’s GDP; 50% increase in the GDP of the Río Negro

Employment: 3,000 direct new jobs (mill, forestry, logistics); 5,000 new indirect jobs

Regional Initiatives: Botnia Foundation, which works with local organisations to enhance the wellbeing and employment prospects of regional communities; FOMENTO, a cooperation program with private landowners to develop silvicultural expertise at independent plantations

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