Your Partner in Paper 2006 Contents
Your Partner in Paper Key figures Paper capacities Paper markets Paper grades Positioning - World Positioning – Europe Trade flows Demand General informaation
UPM February 2, 2006 2 UPMUPM –– Key Key figuresfigures KEY FIGURES Executive Team
President & CEO - Jussi Pesonen
Magazine Newsprint Fine & Wood Converting/ Converting/ Papers Speciality Products Labelstock Speciality Papers Coatings Jyrki Hartmut Matti Harald Heikki Matti J Ovaska Wurster Lievonen Finne Pikkarainen Lindahl Jyrki Salo President President President President President President EVP and CFO
Heikki Malinen EVP Strat. Development Markku Tynkkynen, EVP Resources Pirkko Harrela EVP Communications Hans Sohlström EVP Marketing Pauli Hänninen EVP Business Development Riitta Savonlahti EVP Human Resources
UPM February 2, 2006 4 KEY FIGURES UPM – Key figures 2005-2002
2005 2004 2003
Sales total EUR million 9,348 9,820 9,790 Profit before tax EUR million 260 560 430
Paper production 1,000 tons 10,220 10,890 10,230 Sawn timber 1,000 m3 2,150 2,410 2,410 Plywood 1,000 m3 970 970 940 Chemical pulp 1,000 tons 1,840 2,240 2,030 Personnel at 31.12 31,500 33,400 34,500
UPM February 2, 2006 5 KEY FIGURES UPM – Sales by division € 9,350 million in 2005
Wood Products Other 5% 13%
Converting Magazine papers 14% 32%
Fine and Speciality papers Newsprint 23% 13%
Papers 68%
UPM February 2, 2006 6 KEY FIGURES UPM - Sales by market area 2005
Other 4% Asia 9% Germany 16%
North America 14%
UK 13% Other Europe 5%
Finland 10% Other EU 22% France 7%
Total sales € 9,350 million EU 70%, Europe 74%
UPM February 2, 2006 7 KEY FIGURES UPM – Personnel by division 31.12.2005
Other operations 11% Magazine papers 26% Wood Products 20%
Newsprint 11% Converting 11% Fine and speciality papers 21%
Total personnel 31,500
UPM February 2, 2006 8 KEY FIGURES UPM – Personnel by area 31.12.2005
Asia Pacific 5% North America 6% Other Europe 5% Other EU 5%
UK 5%
France 5% Finland 55%
Germany 14%
Total personnel 31,500
UPM February 2, 2006 9 PaperPaper capacitiescapacities
UPM February 2, 2006 10 PAPER CAPACITIES UPM - Paper capacity by market 2006
China 6% USA 3% Canada 4% Austria 4% France 6%
UK 6% Finland 48%
Germany 23%
Paper production capacity 12.6 million tons Europe 84%
UPM February 2, 2006 11 PAPER CAPACITIES UPM – paper capacity by market 2006
'000 tons Finland 6020
Germany 2930
China 800
Great Britain 800 France 780
Austria 490
Canada 450
USA 350
0 1000 2000 3000 4000 5000 6000 7000
Total 12.6 mill. tons of which 52% outside Finland
UPM February 2, 2006 12 PAPER CAPACITIES UPM – Total paper capacity by paper division 2006
'000 tons
SC Magazine Magazine Papers Coated mech. 3,870 1,850
Newsprint Newsprint 2,810
Fine and Speciality Coated WF Uncoated WF Specs Papers 1,680 1,620 790
0 1000 2000 3000 4000 5000 6000
Total 12.6 mill. tons of which 52% outside Finland
UPM February 2, 2006 13 PAPER CAPACITIES UPM – Paper capacities 2006
Nordland Rauma Kymi Jämsänkoski Changshu Schongau Kaipola Kajaani Kaukas Shotton LWC Augsburg Steyrermühl SC Tervasaari Miramichi Newsprint Voikkaa Blandin WFC Chapelle Schwedt WFU Stracel Caledonian Label Wisapaper Docelles Packaging
0 200 400 600 800 1000 1200 1400 '000 tons
UPM February 2, 2006 14 PAPER CAPACITIES UPM – Total paper capacity 2006
’000 tons
Coated Mechanical 3870
SC 1850
Newsprint 2810
WF Coated 1680
WF Uncoated 1620
Speciality Papers 790
Total 12.6 mill. tons
UPM February 2, 2006 15 PAPER CAPACITIES UPM Paper Divisions Paper and pulp capacities 2006
'000 tons Mag News Fine & Pulp Specs. Augsburg 500 Blandin 350 Caledonian 280 Changshu 800 Chapelle 350 Docelles 150 Jämsänkoski 730 140 Kaipola 300 390 Kajaani 160 450 Kaukas 580 740 Kymi 950 520 Miramichi 450 Nordland 1,400 Rauma 1,260 Schongau 230 500 Schwedt 300 Shotton 520 Steyrermühl 190 300 Stracel 280 Tervasaari 460 240 Voikkaa 410 Wisapaper/Wisapulp 190 775 Total capacity 5, 720 2,810 4,090 2,295
UPM February 2, 2006 16 UPMUPM paperpaper marketsmarkets PAPER MARKETS UPM - Paper and pulp mills in the world
Pietarsaari (also pulp) Kajaani Jämsäkoski Voikkaa Kaipola Kymi Tervasaari (also pulp) (also pulp) Rauma Kaukas (also pulp)
Caledonian Nordland Shotton Schwedt Miramichi Augsburg Chapelle Schongau Blandin Docelles Stracel Steyremühl Changshu
UPM February 2, 2006 18 PAPER MARKETS UPM – Paper Mill Heads
Augsburg Sebastian Loewenberg Miramichi Timo Suutarla Blandin Joe Maher Nordland Hannu Jokisalo Caledonian Gordon Mitchell Rauma Pertti Asunmaa Changshu Hannu Jokisalo Schongau Artur Stöckler Chapelle Timo Heinonen Schwedt Juha Kääriäinen Docelles Michel Chakaï Shotton David Ingham Jämsänkoski Erkki Puru Steyrermühl Walter Pillwein Kaipola Leo Lindroos Stracel Philippe Gaudron Kajaani Kari Pasanen Tervasaari Eero Kuokkanen Kaukas Harry Sundqvist =>1.3.2006 Voikkaa Raimo Särkelä Kymi Yngve Lindström Wisapaper Jari A Vainio
UPM February 2, 2006 19 PAPER MARKETS Paper sales by product category 2005
Speciality Papers 7% Uncoated Woodfree 11% Coated Papers 31% Coated Woodfree 11%
SC Magazine Newsprint 15% 25%
Total 10.1 million tons
UPM February 2, 2006 20 PAPER MARKETS UPM – Paper sales by market area 2005
Other markets Asia 4% 12%
USA and Canada 13% EU 66% Other Europe Finland 5% 3%
Total 10.1 million tons Europe 72%
UPM February 2, 2006 21 UPM – Top market areas 2005
’000 tons 1. Germany 1936 2. Great Britain 1443 3. USA 1228 4. France 738 5. Italy 477 6. China 395 7. Spain 368 8. Finland 345 9. Japan 226 10. Netherlands 215 11. Austria 205 12. Poland 199 13. Belgium 178 14. Switzerland 133 15. Australia 117 16. Russia 115 17. Denmark 103 18. Turkey 100 19. India 88 20. Korea 79 Total paper sales 10.1 million tons
UPM February 2, 2006 22 PAPER MARKETS UPM - Paper mills and sales network
Paper mills Sales company Agent 22 paper mills Logistics Sales representation in 55 countries
UPM February 2, 2006 23 PAPER MARKETS Paper supply chain from mills to customers
22 paper mills in Sales representation in 55 countries Austria 1 customers in 120 countries Canada 1 China 1 Finland 9 France 3 Germany 4 Great Britain 2 USA 1 12.6 million tons, 51 PMs
UPM February 2, 2006 24 Paper grades
UPM February 2, 2006 25 PAPER GRADES Relative quality and price of paper grades
Relative price
CHANGSHU, KYMI, UPM Finesse WFC NORDLAND
UPM Fine CHANGSHU, KYMI, WFU NORDLAND
UPM Star MWC KAUKAS, RAUMA
UPM Ultra, UPM Cote AUGSBURG, BLANDIN, CALEDONIA, KAIPOLA, KAUKAS, LWC MIRAMICHI, RAUMA, STRACEL, VOIKKAA
UPM Satin, UPM Matt MFC JÄMSÄNKOSKI, STRACEL, VOIKKAA
UPM Smart, UPM Cat, JÄMSÄNKOSKI, KAJAANI, RAUMA, SCHONGAU, UPM Lux, UPM Max, UPM Eco SC STEYRERMÜHL UPM Brite, UPM Opalite, UPM Color MFS CHAPELLE, KAIPOLA, KAJAANI, SCHONGAU
UPM News News CHAPELLE, KAIPOLA, KAJAANI, SCHONGAU, SCHWEDT, SHOTTON, STEYRERMÜHL
Relative quality
UPM February 2, 2006 26 PAPER GRADES Paper grades by product category
Capacity UPM Capacity UPM WF ´000 tons Fine '000 tons Finesse
Kymi 380 570
Nordland Papier 490 910
Changshu 600 200
Docelles 150
Total capacity 1.620 1.680
HSWO RG Sheet Fed
UPM February 2, 2006 27 PAPER GRADES Paper grades by product category
MWC, LWC, Capacity UPM UPM UPM UPM UPM MFC '000 tons Star Ultra Cote Satin Matt Augsburg 380 Blandin 350 Caledonian Paper 280 Jämsänkoski 120 Kaipola 300 Kaukas 580 Miramichi 450 Rauma 720 Stracel 280 Voikkaa 410 Total capacity 3,870
HSWO CSWO RG
UPM February 2, 2006 28 PAPER GRADES Paper grades by product category
Capacity UPM UPM UPM UPM UPM SC '000 tons Smart Cat Lux Max Eco Augsburg 120
Jämsänkoski 610
Kajaani 160
Rauma 540
Schongau 230
Steyrermühl 190
Total capacity 1,850
HSWO CSWO RG
UPM February 2, 2006 29 PAPER GRADES Paper grades by product category
Capacity UPM UPM UPM MFS '000 tons Brite Opalite Color
Chapelle Darblay 110
Kaipola 340
Kajaani 220
Schongau X)
Total capacity 670
HSWO CSWO RG x) combined capacity for UPM Brite and UPM News is 500
UPM February 2, 2006 30 PAPER GRADES Paper grades by product category
Capacity UPM News '000 tons News Chapelle Darblay 240 Kaipola 50 Kajaani 230 Schongau 500 x) Schwedt 300 Shotton 520 Steyrermühl 300 Total capacity 2.140
HSWO CSWO RG x) combined capacity for UPM Brite and UPM News is 500
UPM February 2, 2006 31 PAPER GRADES Reel papers for various end uses Materials end-uses Special Special Newsp. Supple- ments Advertising Magazines Books News- papers Inserts Directories Catalogues Other Direct mail Fine UPM Fine UPM Finesse MWC, UPM Star LWC, UPM Ultra MFC UPM Cote UPM Satin UPM Matt SC UPM Smart UPM Cat UPM Lux UPM Max UPM Eco MFS UPM Brite UPM Opalite UPM Color News UPM News
UPM February 2, 2006 32 PAPER GRADES Digital papers end-uses Direct mail Inserts and newspaper suppl. Marketing materials Newspapers Books. Brochures Advertising materials Transactional documents Magazines Catalogues Other UPM UPM DIGI Finesse DIGI UPM DIGI Color Laser Fine UPM DIGI Presentation UPM DIGI Laser+ UPM DIGI Laser UPM DIGI High Definition UPM DIGI Jet UPM UPM DIGI Star DIGI UPM DIGI Cote Magazine UPM DIGI Satin UPM DIGI Lux UPM UPM DIGI Brite DIGI UPM DIGI Color salmon News UPM DIGI News
UPM February 2, 2006 33 PAPER GRADES Office papers
Papers for copying and printing (A4, A3) Special Photo-realistic PrePrint UPM Mail printing Papers UPM Office Future Yes enduses UPM Office Future color Yes Color Yes Yes UPM UPM Letter color inkjet inktech inkjet Professional Professional Prelaser UPM Poste UPM Office Future Yes Color Business Photo paper UPM UPM Prestige card color laser imagetech copy Yes Photo PrePersonal UPM Print Yes paper UPM Office Future Yes UPM UPM Formula presentation smoothtech Heavyweight Premium PrePersonal+ UPM Natura plus Future Yes Gold Business UPM UPM Office inktech presentation card PrePremium presentation Future Yes silver UPM UPM Office multitech multifuction PreInsert multifunction Future Yes Bronze UPM Form UPM Office lasertech copy/print UPM Finesse copy/print Matt
UPM February 2, 2006 34 PAPER GRADES Speciality papers – Label papers
Base Papers Face Papers Glassine SCK CCK C1S WF uncoated WF coated UPM Honey UPM SCK UPM CCK UPM Labelcoat UPM Fine UPM Finesse UPM Golden Office UPM Unique UPM Jetlabel Gloss UPM Blue UPM CCK UPM Unique UPM Fine SC UPM Pacific UPM CCK Pro Lux UPM Vellum UPM Brilliant UPM Brilliant Pro
UPM February 2, 2006 35 PAPER GRADES Speciality papers – Packaging papers
UPM Bag papers UPM Sack Papers UPM Tech Papers UPM Flex papers UPM Kraft UPM WEX LD UPM Forte UPM Jamsacoat UPM Kraft ribbed UPM WEX LDF UPM Kraft UPM Unique UPM Kraff sapporo UPM WEX SP UPM Kraft steel UPM Unique Lux UPM Prime bio UPM WEX UPM Prime UPM SwanFine UPM WEX white UPM Prime wrap UPM SeanFine gloss UPM WEX WS white UPM Prime white UPM SwanWhite UPM WEX DIS white UPM Prime PS white UPM SwanWhite gloss UPM WEX LD white UPM SwanBase UPM SwanWhite UPM WEX LD DIS white UPM SwanBase inno gloss WS UPM WEX SP white UPM SwanFine UPM SwanWhite ribbed UPM Prime white UPM SwanFine gloss UPM SwanWhite X UPM Prime WS white UPM SwanLine UPM White flex UPM SwanXtreme UPM SwanWhite UPM White flex ribbed UPM SwanWhite abra UPM White plus UPM SwanWhite cup UPM White extra strong UPM SwanWhite G UPM Sean White gloss UPM SwanWhite inno UPM SwanWhite X UPM WEX white UPM SwanXtreme UPM White flex UPM X White line UPM White plus
UPM February 2, 2006 36 PAPER GRADES Examples of end uses
Raw material Paper grade End use examples
newsprint newspapers, inserts, flyers Mechanical pulp and/or newspaper supplements, newspapers, directories, mechanical speciality paper deinked pulp magazines, books, catalogues, advertising material magazines, catalogues, newspaper supplements, SC papers Chemical inserts, advertising material and mechanical magazines, catalogues, newspaper supplements, pulp Coated mechanical papers advertising material, books, direct mail label paper, label release papers, food wrapping, Speciality papers household and sanitary papers, baking paper, packaging material office papers, writing papers and envelopes, Chemical Woodfree uncoated papers direct mail, magazines, books, advertising material pulp magazines, brochures, direct mail, annual reports, Woodfree coated papers books, advertising material Kraft papers sacks, bags, wrapping and packaging, envelopes
UPM February 2, 2006 37 PAPER GRADES UPM Printing Papers
UPM February 2, 2006 38 PAPER GRADES Fine papers
high-brightness, double coated woodfree paper (WFC)
matt or calendered, uncoated woodfree paper (WFU)
UPM February 2, 2006 39 PAPER GRADES MWC, LWC, MFC
high-brightness, double coated mechanical paper (MWC)
high-brightness, coated mechanical paper (LWC)
coated mechanical paper (LWC)
matt finished, coated mechanical paper (MFC)
mechanical speciality paper (MFC) for CSWO
UPM February 2, 2006 40 PAPER GRADES SC papers
high-brightness, uncoated groundwood paper
high-brightness, supercalendered mechanical paper (SCA+)
high-brightness, silk finished, supercalendered mechanical paper (SCA+) supercalendered mechanical paper (SC-A)
on-line calendered mechanical paper (SC-B)
UPM February 2, 2006 41 PAPER GRADES MFS papers
uncoated mechanical speciality paper
mechanical directory paper
coloured mechanical speciality paper
UPM February 2, 2006 42 PAPER GRADES Newsprint
newsprint
UPM February 2, 2006 43 PAPER GRADES Digi range
UPM DIGI Fine Woodfree Fine Papers
UPM DIGI Magazine Mechanical Magazine Papers
UPM DIGI News Mechanical Newsprint Papers
UPM February 2, 2006 44 PositioningPositioning -- World World POSITIONING – WORLD UPM’s share in graphic papers capacity 2006
mill. tons 60
50 49 46
40
30 28
20 20 Rest of the world 8 10 Other Europe UPM 0 Newsprint Coated mech. SC WF coated WF uncoated
UPM 2.8 3.9 1.9 1.7 1.6
Source: Jaakko Pöyry, UPM
UPM February 6, 2006 46 POSITIONING – WORLD UPM's market positions 2006
Businesses UPM's market position Europe Global Paper Magazine papers 1 1
Newsprint 2 5 Fine papers 3 5 Label papers 1 1
Packaging papers 3
Converted products Self-adhesive labelstock 2 2 Industrial wrappings 1 Wood products Plywood 1
Sawn goods 3
UPM February 2, 2006 47 POSITIONING – WORLD UPM's paper market positions in 2006*
in Europe in the World
Coated mechanical 1 1
SC magazine papers 1 2
Newsprint 2 5 Woodfree coated papers 5 4 Woodfree uncoated papers 6 8 Envelope papers 1 ***
Label papers 1 1
Packaging papers 1-3** ***
*) based on capacities **) depending on the product ***) no ranking available
UPM February 2, 2006 48 POSITIONING – WORLD World’s biggest graphic papers producers 2006
Stora Enso
UPM
International Paper
Norske Skog
Nippon Paper Group
Abitibi-Consolidated
Asia Pulp & Paper
M-real
Oji
Bowater
0 2000 4000 6000 8000 10000 12000 ’000 tons
Source: JP, UPM
UPM February 6, 2006 49 POSITIONING – WORLD World’s biggest graphic papers producers 2006
Stora Enso
UPM
International Paper
Norske Skog News Nippon Paper Group SC Paper Abitibi-Consolidated
Asia Pulp & Paper Coated mech.
M-real WFC
Oji WFU Bowater
0 2000 4000 6000 8000 10000 12000 ’000 tons
Source: JP, UPM
UPM February 6, 2006 50 POSITIONING – WORLD World’s biggest paper and paperboard producers 2006
Stora Enso International Paper UPM Georgia-Pacific Oji Weyerhaeuser Nippon Paper Group
Smurfit Kappa Group Graphic Papers Smurfit-Stone Other paper Asia Pulp & Paper and board
0 2 4 6 8 10 12 14 16 18 mill. tons
Source: JP, UPM
UPM February 6, 2006 51 POSITIONING – WORLD Coated mechanical Largest producers in the world 2006
UPM
Stora Enso
M-real
International Paper
Burgo Corporation Consolidation Myllykoski
Norske Skog Other Top 5 NewPage Corp. 47% 53% Bowater
Oji
0 1000 2000 3000 4000
Source: JP, UPM Capacity ’000 tons
UPM February 2, 2006 52 POSITIONING – WORLD SC magazine Largest producers in the world 2006
Stora Enso
UPM
Myllykoski Corporation Norske Skog
SCA Consolidation Irving Pulp & Paper Ltd.
Abitibi-Consolidated Other 23% Belgravia Investments Ltd. Top 5 77% Katahdin Paper Co. L.L.C.
Bowater
0 500 1000 1500 2000 2500
Source: JP, UPM Capacity ’000 tons
UPM February 2, 2006 53 POSITIONING – WORLD Newsprint*) Largest producers in the world 2006
Norske Skog
Abitibi-Consolidated
Stora Enso
Bowater
UPM Consolidation Nippon Paper Group
Holmen Other Top 5 Catalyst Paper Corp. 60% 40% Oji
Kruger
0 1000 2000 3000 4000 5000 6000
*)
including TD, improved newsprint, superimproved newsprint and book papers Capacity ’000 tons JP, UPM Source:
UPM February 2, 2006 54 POSITIONING – WORLD Woodfree coated paper Largest producers in the world 2006
Sappi
Stora Enso
Asia Pulp & Paper UPM
M-real Consolidation Lecta Group
Oji Other Top 5 Burgo Corporation 64% 36% Nippon Paper Group
NewPage Corp.
0 1000 2000 3000
Source: JP, UPM Capacity ’000 tons
UPM February 6, 2006 55 POSITIONING – WORLD Woodfree uncoated paper Largest producers in the world 2006
International Paper
Weyerhaeuser
Mondi Asia Pulp & Paper
Domtar Consolidation Stora Enso
Nippon Paper Group Top 5 Other 28% UPM 72% M-real
Boise Cascade, L.L.C.
0 1000 2000 3000 4000 5000 6000
Source: JP, UPM Capacity ’000 tons
UPM February 2, 2006 56 POSITIONING – WORLD Biggest paper and paperboard producing countries 2004
mill. tons 1. USA 80,2 2. China 41,7 3. Japan 30,3 4. Canada 20,1 5. Germany 19,3 6. Finland 13,1 7. Sweden 11,1 World production 8. Korea, 10,4 9. France 9,9 339 mill. tons change 10. Italy 9,4 2004/2003: +2.8% 11. Brazil 7,9 12. Indonesia 7,7 13. Russia 6,3 14. Great Britain 6,2 15. Spain 5,4 Others 59,8
Source: PPI
UPM August, 2005 57 POSITIONING – WORLD Biggest paper and paperboard exporting countries 2004
mill. tons 1. Canada 14,9 2. Finland 11,8 3. Germany 10,7 4. Sweden 9,4 5. USA 8,6 6. France 5,3 7. Austria 3,9 8. 3 World export 9. Italy 2,9 103 mill. tons 10. Korea, 2,7 change 2004/2003: 11. Indonesia 2,6 +3.7% 12. Russia 2,5 13. Norway 1,9 14. Spain 1,8 15. Brazil 1,8 Others 19,7
Source: PPI
UPM August, 2005 58 POSITIONING – WORLD Main paper and board importing countries 2004
mill. tons 1. USA 16,6 2. Germany 9,9 3. Great Britain 7,6 4. France 6,2 5. China 6 6. Italy 4,6 7. Spain 3,6 8. Netherlands 3,1 9. Belgium 2,9 10. Hong 2,5 11. Canada 2,1 12. Mexico 1,8 13. Japan 1,8 14. Poland 1,5 15. Taiwan 1,5
Source: PPI
UPM August, 2005 59 POSITIONING – WORLD Paper and paperboard consumption per capita 2004
267 187 247 39 280 1306
455 Oth. Europe 42 1388 329 W. Europe N. America China 127 Japan 27 882 203
World consumption 552 Oth. Asia 33 6 kg/capita 56 kg Africa World population L. America million inhabitants 31 6 430 Oceania
Source: PPI
UPM August, 2005 60 POSITIONING – WORLD Paper and paperboard production per mill 1960 and 2004
'000 tons 300 46
250 46 96 200 451
150
188 100 126 81 435 1960 2003 50 no. of mills 0 2003 Finland Sweden Canada USA Germany France Great Japan Britain Source: PPI
UPM August, 2005 61 POSITIONING – WORLD Average capacity of printing paper machines
'000 t/a UPM
Nordic countries
Other Western Europe
Canada
USA
Japan
Asia-Pacific region
Average
0 50 100 150 200 250 300
Source. Jaakko Pöyry
UPM March 23, 2006 62 POSITIONING – WORLD World demand trends of graphic papers 1983-2007
'000 tons 60 000 Growth rate 2004-07
50 000 WF unctd +1,8 % p.a. 40 000 Newsprint +1.0 % p.a. 30 000 WF ctd +3,7 % p.a. 20 000 Ctd mech. +1.4 % p.a. 10 000 Unctd mech. 0 +1.5 % p.a. '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07
Source:Cepiprint, PPPC, EMGE, JP
UPM February 2, 2006 63 POSITIONING – WORLD World capacity trends of graphic papers 1990-2007
'000 tons 60 000 Growth rate 2003-07
50 000 WF uncoated 2,2 % p.a. 40 000 Newsprint 1.1 % p.a. 30 000 WF coated 2.3 % p.a. 20 000 Ctd mech. 2.0 % p.a. 10 000 Unctd mech. 0 1.6 % p.a. '90 '92 '94 '96 '98 '00 '02 '04 '06
Source:Cepiprint, PPPC, EMGE, JP
UPM February 2, 2006 64 PositioningPositioning - - Europe Europe POSITIONING – EUROPE Biggest graphic papers producers in Europe 2006
mill.tons UPM 10,4 Stora Enso 10.2 M-real 4.5 Norske Skog 3.5 Burgo 3.0 Coated mech SC Sappi 2.5 Newsprint 2.5 Myllykoski WF coated Holmen 2.2 WF uncoated Mondi 1.6 Lecta Group 1.6
Source: JP, UPM
UPM February 2, 2006 66 POSITIONING – EUROPE European Coated mechanical players (´000 tons)
UPM (3.070) M-real (1.280) Norske Skog (810) Rauma (FIN) Kirkniemi (FIN) Walsum (D) Kauksas (FIN) Jyväskylä (FIN Bruck (A) Voikkaa (FIN) Husum (S) Follum (NO) Augsburg (D) Burgo (1.250) SCA (460) Kaipola (FIN) Stracel (F) Verezuolo (I) Ortviken (S) Caledonian (UK) Duino (I) LEIPA-Georg Jämsänkoski (FIN) Villorba (I) Leinfelder (460) Marzabotto (I) Stora Enso (1.935) Avezzano (I) Schwedt (D) Kabel (D) Toscolano (I) Sappi (450) Corbehem (F) Myllykoski (1.115) Lanaken (B) Veitsiluoto (FIN) Kotka (FIN) Plattling (D) Other (780) Anjala (FIN) Albbruck (D) Perlen (CH) Dachau (D) Holmen (S) Myllykoski (FIN) Matussiere & Forest (F) Steinbeis Holding (D) Kübler & Niethammer (D) Paper Mill Gemmrigheim (D) Ahlström/Ascoli (I)
UPM February 2, 2006 67 POSITIONING – EUROPE European SC-magazine paper players (´000 tons)
UPM (1.850) Stora Enso (1.525) SCA (500) Jämsänkoski (FIN) Kvarnsveden (S) Laakirchen (A) Maxau (D) Rauma (FIN) Holmen (140) Schongau (D) Reisholz (D) Steyrermühl (D) Langerbrugge (B) Hallstavik (S) Kajaani (FIN) Wolfscheck (D) JIP – Augsburg (D) Myllykoski (790) Papirny Vetrni (40) Lang (D) Vetrni u Ceskeho Myllykoski (FIN) Krumlova (CZ) Norske Skog (550) Halden (NO)
UPM February 2, 2006 68 POSITIONING – EUROPE European newsprint players (´000 tons)
Stora Enso (3.300) Holmen (1.845) JSC Solikamsk- Others (935) Hylte (S) Braviken (S) bumprom (425) (excl. below 50.000 t) Kvarnsveden (S) Hallstavik (S) Solikamsk (RUS) Matussiere et Summa (FIN) Pap. Peninsular (ES) Forest (F) Langerbrugge (B) Mondi (390) Perlen (CH) Anjala (FIN) Kondopoga (760) Kama Pulp & Aylesford (UK) Sachsen (D) Paper (RUS) Kondopaga (RUS) Syktyvkar (RUS) Varkaus (FIN) IP (P) Maxau (D) Myllykoski (580) Papresa (370) S.C. Letea S.A: (RO) UPM (2.810) Rhein Papier (D) Arctic Paper (S) Renteria (ES) Golzern Holding (D) Shotton (UK) Utzenstorf (CH) Lang (D) Vipap Videm Krsko Schongau (D) Abitibi- (230) d.d. (SL) Kajaani (FIN) Consolidated Fabryka Papieru S.A. Kaipola (FIN) SCA (560) Ellesmere (UK) Fabryka Papieru Chapelle (F) Ortviken (S) Szczecin (P) Steyrermühl (A) Aylesford (UK) Burgo (185) Schwedt (D) JSC Investment Norske Skog Mantova (I) Company (540) Toscolano (I) (2.175) Marzabotto (I) Skogn (NO) Balakhna (RUS) Golbey (F) Palm Group (540) Parenco (N) Follum (NO) Eltman (D) Bruck (A) Aalen (D) Sieti (CZ)
UPM February 2, 2006 69 POSITIONING – EUROPE European fine paper players* ('000 tons)
StoraEnso (3.300) UPM (2.500) Burgo (1.480) Portucel (1.075) Oulu (F) Nordland (D) Virton (B) Figueira da Foz (P) Veitsiluoto (F) Kymi (FIN) Sora (I) Setubal (P) Nymolla (S) Docelles (F) Avezzano (I) Arctic Paper (480) Varkaus (FIN) Sappi (1.970) Chieti (I) Grycksbo (S) Tolmezzo (I) Kostrzyn (POL) Wapenweld (NL) Gratkorn (A) Sarego (I) Åsensbruk (S) Imatra (FIN) Maastricht (NL) Toscolano (I) Munkedal (S) Uetersen (D) Nijmegen (NL) Lugo di Vicenza (I) Alfeld (D) Arjo Wiggins (420) M-real (3.085) Ehingen (D) Mondi (1.220) Bessé sur Braye (F) Biberist (CH) Blackburn (UK) Syktyvkar (RUS) Wizernes (F) Stockstadt (D) H.Hempstead (UK) Ulmerfeld-H. (A) Saint-Mars-la- Husum (S) Lanaken (B) Ruzomberok (SLO) Briére (F) Hallein (A) Lecta (1.530) Szolnok (HUN) Annat Point (UK) Alizay (F) Dunaujvaros (HUN) + 14 mills Berg.Gladbach (D) Le Lardin Kematen/Ybbs (A) (cap. below 50.000 t/a) Kemsley (UK) Saint Lazare (F) Pap. Scheufelen Sittingbourne (UK) Riva del Garda (I) IP Europe (1.170) Äänekoski (FIN) Motril (ES) Kwidzyn (POL) (290) Wifstavarf (S) Zaragoza (ES) Svetogorsk (RUS) Lenningen (D) Pont St. Max (F) St Joan les Fonts (ES) Saillat sur Vienne (F) Pap. Guipuzcoana Sarria de Ter (ES) Inverurie (UK) Maresquel (F) (250) Hernani (I)
* Cap. min. 250.000 t/a Excl. WF specialities
UPM February 6, 2006 70 POSITIONING – EUROPE European WFC players ('000 tons)
Sappi (1.930) Lecta (1.510) Arjo Wiggins (375) Gratkorn (A) Le Lardin Saint Lazare (F) Bessé sur Braye (F) Maastricht (NL) Riva del Garda (I) Wizernes (F) Nijmegen (NL) Motril (ES) Alfeld (D) Zaragoza (ES) Scheufelen (270) Ehingen (D) St Joan les Fonts (ES) Lenningen (D) Blackburn (UK) Sarria de Ter (ES) Lanaken (B) Arctic Paper (150) UPM (1.480) M-real (1.585) Åsensbruk (S) Nordland (D) Biberist (CH) Kymi (FIN) Other (320) Hallein (A) (excl. below 50.000 tons) Bergisch Gladbach (D) Burgo (1.260) Matussiere & Forest (F) Stockstadt (D) Virton (B) DalumPapirA/S (DK) Sittingbourne (UK) Sora (I) Smurfit Kappa Group (UK) Äänekoski (FIN) Avezzano (I) Aconda Paper S.A.) Pont St. Maxence (F) Chieti (I) Stora Enso (1.550) Sarego (I) Lugo di Vicenza (I) Oulu (FIN) Toscolano (I) Grycksbo (S) Uetersen (D) Varkaus (FIN)
Excl. WFC specialities
UPM February 6, 2006 71 UPM (1.410)
POSITIONING – EUROPE European WFU players ('000 tons)
Stora Enso (1.750) IP Europe (1.170) Eco-Invest. (250) Veitsiluoto (FIN) Kwidzyn (POL) Ruzomberok (SL) Nymölla (S) Svetogorsk (RUS) Berghuizer (NL) Saillat (F) Burgo (220) Varkaus (FIN) Inverurie (UK) Tolmezzo (I) Imatra (FIN) Maresquel (F) Toscolano (I) M-real (1.500) Portucel (1.075) Crown Van Husum (S) Figueira da Foz (P) Gelder N.V. (205) Alizay (F) Setubal (P) Kemsley (UK) Velsen Noord (NL) Stockstadt (D) UPM (1.020) Wifstavart (S) Other (550) Nordland (D) St. Maxene (F) (excl. below 100.000 tons) Biberist (CH) Kymi (FIN) Docelles (F) Clairefontaine (F) Mondi (1.220) Steinbeis Holding (D) Arctic Paper (320) Cart. Fedrigoni (I) Syktyvkar (RUS) Paperalia S.A. (ES) Ulmerfeld- Kostrzyn (POL) Hausmening (A) Munkedal (S) Ruzomberok (SLO) Szolnok (HUN) Pap. Guipuzcona Dunaujvaros (HUN) de Zicuña (250) Kematen an Ybbs (A) Hernani (ES) Excl. WFU specialities
UPM February 6, 2006 72 Trade flows
UPM February 2, 2006 73 TRADE FLOWS Magazine papers Demand and capacity 2006 preliminary
16,1
10,7 8,5 8,0 1,0 0,1 1,6 Oth. Europe 0,2 0,04 0,9 0,2 0,4 0,7 0,8 2,0 1,9 N. America W. Europe Oth. Asia Japan 0,1 0,3 0,1 0,05
0,4 Capacity 27,2 mill. tons 0,03 0,1 0,2 0,6 Africa Demand 0,07 0,4 L. America Oceania 23,9 mill. tons
Source: Cepiprint, PPPC, EMGE, RISI
UPM February 17, 2006 74 TRADE FLOWS Coated mechanical paper Capacity and demand 2006 estimate
10,9
7,3 0,02 5,7 5,9 -0,7 1,0 0,7 Oth. Europe 0,04 0,2 0,3 1,9 1,8 0,8 0,7 N. America W. Europe 0,1 Oth. Asia Japan 0,1 0,2 0,1
0,2 0,3 Capacity 19,5 mill. tons -0,1 0,2 0,5 Africa Demand 0,1 0,3 L. America Oceania 17,0 mill. tons
Source: Cepiprint, PPPC, JP
UPM February 17, 2006 75 TRADE FLOWS SC magazine paper Capacity and demand 2006 estimate
5,2
3,5
0,4 2,7 0,1 2,3 0,7 Oth. Europe 0,3 0,02
0,1 -0,1 0,08 0,1 W. Europe N. America 0,06 Oth. Asia Japan
0,03 0,05 0,1 0,3
Capacity 7,7 mill. tons 0,06 -0,1 Africa Demand L. America Oceania -0,1 6,9 mill. tons
Source: Cepiprint, PPPC, JP
UPM February 17, 2006 76 TRADE FLOWS Std newsprint Capacity and demand 2006 estimate
13,2
10,3 10,2 9,2 2,9 0,2 1,8
0,2 Oth. Europe 3,8 3,9 0,6 3,3 3,2 1,3 6,2 4,4 1,3 1,4 N. America 0,1 W. Europe China Japan 0,8 0,3 Oth. Asia 0,9 Capacity 1,8 40,2 mill. tons 1,0 0,5 0,6 Africa Demand 0,9 L. America Oceania 0,8 37,7 mill. tons
Source: Cepiprint, PPPC, JP
UPM February 17, 2006 77 TRADE FLOWS Woodfree coated paper Capacity and demand 2006 estimate
11,5
8,1
7,8 5,6 1,0 5,2 5,0 0,2 6,5 0,5 0,1 4,7 0,1 Oth. Europe 0,8
0,4 0,7 N. America W. Europe Japan 0,2 0,2 0,5 0,1 0,4 Oth. Asia 0,1 0,03 0,2 0,3 Capacity 0,1 0,7 30,5 mill. tons 0,9 Africa 0,6 0,1 Demand L. America Oceania 0,1 0,5 27,6 mill. tons
Source: Cepiprint, PPPC, JP
UPM February 17, 2006 78 TRADE FLOWS Woodfree uncoated paper Capacity and demand 2006 estimate
13,5 12,6 10,8 9,6 3,0 13,0 0,8 1,8 8,9 11,2 0,1 0,2 6,7 Oth. Europe 3,6 3,6 0,1 0,5 0,2 0,3 0,1 0,2 0,2 N. America W. Europe Japan Oth. Asia 0,1 0,6 0,2 1,0 1,2 China Capacity 57,1 mill. tons 3,3 3,2 Africa 0,03 Demand 0,6 Oceania 0,4 50,5 mill. tons L. America
*) 7 500 Cepifine demand (Cepifine bulk grades, i.e. excl. spec. grades) 8 400 (Cepifine capacity)
Source: Cepiprint, PPPC, JP
UPM February 17, 2006 79 Demand
UPM February 2, 2006 80 DEMAND Western Europe Coated mechanical - Demand forecast
mill. tons Demand change from previous year 8 5% 4% 13% 4% -1% -6% 1% 4% 6 1%
4
2
0 '98 '99 '00 '01 '02 '03 '04 '05 '06e
Lockout in Finnish mills 2005 Demand growth rate 2003-2006: 3% Source: Cepiprint, UPM
UPM February 2, 2006 81 DEMAND Western Europe SC magazine - Demand forecast
mill. tons Demand change from previous year 4 5% 3% -2% 9% 0% -1% 1% 6% 3 9%
2
1
0 '98 '99 '00 '01 '02 '03 '04 '05e '06e Lockout in Finnish mills 2005 Demand growth rate 2003-2006: 2% Source: Cepiprint, UPM
UPM February 2, 2006 82 DEMAND Western Europe Newsprint - Demand forecast
mill. tons Demand change from previous year 12
5% 3% -3% 1% 1% 9 5% -5% 0% 5%
6
3
0 '98 '99 '00 '01 '02 '03 '04 '05e '06e Lockout in Finnish mills 2005 Demand growth rate 2003-2006: 2% Source: Cepiprint, UPM
UPM February 2, 2006 83 DEMAND Western Europe Woodfree coated - Demand forecast
mill. tons Demand change from previous year
8 2% 4% 3% 8% 10% -7% 1% 1% 8% 6
4
2
0 '98 '99 '00 '01 '02 '03 '04e '05e '06e Lockout in Finnish mills 2005 Demand growth rate 2003-2006: 5% Source: Cepiprint, UPM
UPM February 2, 2006 84 DEMAND Western Europe Woodfree uncoated - Demand forecast
mill. tons Demand change from previous year
8 3% 2% 6% 1% 3% 5% -4% -1% -1%
6
4
2
0 '98 '99 '00 '01 '02 '03 '04e '05e '06e
Lockout in Finnish mills 2005 Demand growth rate 2003-2006: 3% Source: Cepiprint, UPM
UPM February 2, 2006 85 General informaation
UPM February 2, 2006 86 Newsprint and printing & writing paper consumption and the Proliferation of Electronic Media in Western Europe
40 - Paper consumption, million t/a - High speed Internet access
Expansion of Internet/WWW CD-ROMs 30 Laser Printers
Satellite TV PCs Mini Computers Cable TV 20 VCR Colour TV Mainframe Printing and writing papers Computers 10 Radio Cinema TV Newsprint 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Source: Jaakko Pöyry Consulting UPM February 13, 2006 87 Printing papers' life cycle
Paper Fresh fibre production production Production of recycled fibres Printing
Forest
Incineration/ Waste paper/ waste landfill Distribution Biodiversity
Reader
UPM February 2, 2006 88 Structural changes of the forest industry in Finland
Metsäliitto Stora Enso Metsäliiton Metsä- Teollisuus M-real liitto Finnforest Stora Enso Kyro Serlachius Metsä- Varkaus Oulu Sellu (Ahlström) Enso Joutseno- Gutzeit Metsä- Pulp Tampella Rauma Myllykoski Forest and Veitsiluoto Metsä- Kemi Tambox Botnia Corenso
UPM-Kymmene Sunila Ahlström ==> Jujo Thermal United 1996 Schauman Paper Mills Georgia-Pacific 1991 1988 Repola Kymmene Finland (Nokia), Georgia Pacific Kajaani Kaukas 1989 Rauma- 1986 Stromsdal Repola Rosenlew 1991 1987
UPM February 2, 2006 89 Changshu
1996 KYMMENE
UPM February 2, 2006 90 Changshu mill
1996
KYMMENE
UPM February 2, 2006 91 G. Haindl'sche Papier fabriken KgaA, 2001 UPM-Kymmene APRIL Changshu mill, 2000 Blandin Paper 1996 Company, 1997 Repap Enterprises Inc., 2000 Chapelle Darblay S.A. Repola Oy 1991 1990 Oy Wilh. Schauman Ab Kymmene Oy 1988 Rauma-Repola Oy Yhtyneet Paperitehtaat Oy 1986 Caledonian Paper plc 1987 Kajaani Oy Oy Kaukas Ab Oy W. Rosenlew AB 1989 1986 1987 Stracel S.A. Kymi-Strömberg Oy 1988 1983 Papeteries Lohjan Paperi Oy Shotton Paper Boucher S.A. 1982 Company Ltd Kymi Kymmene Oy 1977 1975 Osakeyhtiö Mahogany ja 1985 Puukeskus Oy Nordland Papier GmbH 1977 Raf. Haarla 1976 1967 Kymin Osakeyhtiö
UPM February 2, 2006 92 From forest to office paper – one hour / paper machine
105 m3 95 m3 Fillers 10 000 kg
Birch pulp 24 000 kg Pine pulp 16 000 kg
8,5 m
Speed 75 km/h
50 000 per hour 20 000 reams A4
UPM February 2, 2006 93 From forest to coated paper – one hour / paper machine
65 m3 Fillers & coating colours 95 m3 25 000 kg
Birch pulp 16 000 kg Pine pulp 16 000 kg
8.5 m
60 000 kg per hour
Speed PM 8: 80 km/h & 100 reels C3: 110 km/h (record 130 km/h) in size 90 x 120 cm
UPM February 2, 2006 94 UPM February 2, 2006 95