PULP VISION

P. 6 P. 26

CONTINUOUS IMPROVEMENTFIBRE TECH

P. 18

PARTNERS IN PULP

ASIAN EXPERTISE

SUPER CELLULOSE

ECHO ISSUE 2 / 2015 STAKEHOLDER MAGAZINE

FIBRE INTELLIGENCE

2 ECHO — 2 / 2015

FIBRE FACT ÄÄNEKOSKI

The world’s most efficient of its kind. Most of the recovery boiler steam is used

for generating bioelectricity. Total area required for the mill:

Gross building area:

Total building volume:

Concrete elements:

The overall effect on employment during the construction phase will be more than 6,000 person-years.

Evaporation plantFibre line

Drying plantTemporary wood terminal

Recovery boiler and turbine

40ha

142,000m2

1,000,000m3

15,000pcs

The next-generation bioproduct mill under construction in Äänekoski, Central Finland, is ideally located in terms of availability of raw materials, and the necessary logistics networks are already in place. Scheduled to be completed in the third quarter of 2017, the mill will respond to growing demand for softwood pulp. It will also expand the ecosystem of bioeconomy companies developing and producing bioproducts in Äänekoski.

120m

Bark is used for making biogas that replaces fossil fuel in the lime kiln. In-situ concrete:

Load-bearing concrete arches:

Piling:

Steel structures:

Height 120m, diameter 12m

Woodchip piles

Debarking department

A GIANT RISES

100,000m3

80,000m2

150–180km

7,000t

Biological effluenttreatment plantMulti-stage biological purification process.

DIRECT WEBCAM showing construction site progress online at

bioproductmill.com

Chimney

4 ECHO — 2 / 2015

At Metsä Fibre, continuous improvement is deep within the company culture.

ECHO METSAFIBRE.COM

26186

INTELLIGENCE INNOVATION

ALLIANCE

METSÄ FIBRE ECHO. ISSUE 2/2015. METSÄ FIBRE, PO BOX 30, FI-02020 METSÄ, FINLAND. WWW.METSAFIBRE.COMPublisher: Metsä Fibre, Sales and Customership. Editor-in-Chief: Saija Tuomikoski, Editorial board: Ari Harmaala, Mikael Lagerblom, Ursula Lumme, Tom Nickull and Saija Tuomikoski.

Production: Miltton Oy. Producer: Minna Salama. Layout: Riina Walli. Printed by: Erweko Oy. ISSN 2324-0199 (printed) ISSN 2324-0202 (online)ECHO is published in English, Finnish, German and Chinese.All magazines are available at www.metsafibre.com.Cover: Carta Integra 190 g. Paper: Galerie Art 130 g.

18 PARTNERS IN PULPGeneral trading company Itochu provides a uniquely well-informed point of view on the Asian market for Metsä Fibre’s offering.

06 PULP VISION 12 GREEN GROWTH

26 FIBRE TECH

According to Professor Herbert Sixta, cellulose has the potential to become a super-material of the future.

Digital services for forest owners help to promote sustainable forest management.

FIBRE INTELLIGENCE

2 / 2015 STAKEHOLDER MAGAZINE

CONTENT2FIBRE FACTA GIANT RISES

5EDITORIALGENERATIN G ADDED VALUE TOGETHER

6–11 PULP VISIONFANTASTIC FIBRES

12–15 GREEN GROWTHELECTRONIC FOREST MANAGEMENT IS HERE

16–17MARKET REVIEWTHE CHINA CHALLENGE 18–25PARTNERS IN PULPTHE PARTNER PERSPECTIVE

26–30FIBRE TECHDEVELOPMENT NEVER ENDS

31 COLUMNGREETINGS FROM THERE, WHERE THE GOLD IS GREEN

32–33 SEEDLINGSEFQM EXCELLENCE AWARD, CUSTOMER SURVEY &ROUND TABLE ON THE BIOECONOMY

34–35BRANCHING OUTA STRONG COMBINATION OF PULP AND PLASTIC

GENERATING ADDED VALUE TOGETHERForests are Finland’s most important renewable natural resource, and their sustainable management will continue to ensure increasing wood supply and biodiversity. About 100 million cubic metres of new wood grows in the forests of Finland every year, whereas the total annual harvest has only been about 55 million cubic metres. There are no forest management obstacles to increasing the rate of felling, and annual harvesting of softwood for pulp could be sustainably increased by as much as seven million cubic metres.

Some 70–80 per cent of the domestic wood raw material used by the forest industry in Finland is purchased from the proprietors of privately owned forests. With an increasing number of owners living in towns and cities nowadays, there is growing demand for comprehensive forest mana gement services. Metsä Group also takes care of forest renewal on the owner’s behalf where required, and provides various solutions for easier trading and transactions. Going beyond wood sales, this approach seeks to manage forest estates in a manner that optimises the benefits of both parties. Close co-operation and services specifically customised to meet the needs of forest owners ensure a steady supply of pulpwood.

The pulp business must similarly respond to the need for comprehensive service, and Metsä Fibre stands out as a pioneer in constantly seeking to help key customers achieve their objectives. Generating added value for both parties is fundamental to our thinking. From the annual planning stage onwards, we are genuinely engaged in the R&D work and daily opera tions of our customers, seeking to be involved in creating added value for them and boosting their business prospects.

We also evolve continually in the interests of our customers. Digitisation is enabling us to provide new services both in managing forest estates and in the pulp trade. An example of this evolution and of our tools for innovation is the Botnia IdeaBooster concept, which enables us to formulate and refine development ideas that benefit our business and the operations of our customers. Also, the FibreOnline service gives the customer single-window access to all electronic services and documentation.

The forest is a fundamental element of the Finnish character and an indelible part of our DNA. In the same way, Metsä Fibre has internalised the idea of in-depth partnership and added value creation as part of our customer promise and corporate culture.

Ari Harmaala,Senior Vice President, Sales and Customership, Metsä Fibre

PEFC/02-1-01

6 ECHO — 2 / 2015

PULPVISION

Pulpwood is the most important raw material for cellulose, a highly adaptable natural polymer, which may well play a crucial part in building a sustainable future.

FANTASTIC FIBRES

TEXT: TIMO NYKÄNEN, PHOTO: JUSSI SÄRKILAHTI

“Cellulose is by far the most abundant organic raw material on earth, and has the potential to become a super- material of the future”, says Professor Herbert Sixta, Head of the Department of Forest Products Technology and leader of the Biorefineries Research Group at Aalto University in Espoo, Finland.

Sixta stresses how our oil-based economy and its products must gradually be replaced with the bioeconomy and renewable raw materials in order for us to survive. This fact is the driving force behind Aalto University’s ongoing research efforts to optimise and develop processes for separating value-added products such as

cellulose, hemicellulose and lignin from biomass. Cellulose is well suited for modification and multiple uses for the good of mankind, even though Sixta admits that the material has certain challenging characteristics.

“The difficult thing with cellulose compared to synthetic polymers is that it is extremely difficult to process. It is a multi-functional polymer with good basic properties, but with limited solubility. Because of this fact, it is quite understandable that so far we only have pulp and paper as larger volume products. We already have textile fibres, and a few other cellulose derivatives such as acetates, but compared to the overall volume of paper they have only niche functions,” Sixta says.

He sees the textile industry as a highly potential and significant business for adopting cellulose fibres as replacements for synthetics.

“Textiles have a high market volume of around 100 billion tonnes per year, which is in a similar order of magnitude to paper. At the same time the use of cotton cannot be further increased due to the fact that it competes with arable land needed for the cultivation of food. These conditions are in favour of, for instance, wood-based cellulose products,” Sixta explains.

“

8 ECHO — 2 / 2015

PULP VISION

PIONEERING PULP EXPERTISE

A Professor at Aalto University since 2007, Sixta also holds an additional post in his native country Austria as a Professor in the field of chemical pulping at the University of Technol-ogy in Graz. He started out at the University of Innsbruck in Austria studying chemistry, and obtained a PhD in 1982. However, most of his early career was spent at Lenzing AG, a company specialised in the production of regenerated cellulose fibres. At Lenzing he established a research department mostly focused on pulp chemistry and technology.

“My academic career re-started in the 90’s when I became Associate Professor in Graz. As a scientist and researcher I have mainly been involved in the areas of dissolving pulp, cellulose chemistry and regenerated cellulose products. But I expanded this scope to lignin chemistry and also worked on hemicellulose valorisation,” Sixta says.

These days his research group consists of 21 PhD students working on a varied range of expert subjects related to bio-based material research.

“Our focus as a department is still on improv ing pulping processes and the properties of pulp, which continue to be key issues around the world. We have, for instance, recently worked on a joint project on traditional kraft pulping with the Metsä Group where we man-aged to substantially increase the yield of pulp.”

Sixta says he is one of the last few researchers with a similar background to many of the previ-ous experts at Aalto University back in the day when there was no distinction made between the fields of pulping and regenerated cellulose fibres.

“Finland certainly belongs to the pioneering

countries in pulping and has made many impor-tant inventions, especially in engineering. Aalto University used to also be very well known for the chemical recovery in kraft pulping, but un-fortunately this expertise has more or less been lost,” Sixta says.

HUGE POTENTIAL IN TEXTILES

According to Sixta, one of the milestones in processing cellulose for value-added applications is the discovery of so-called ionic liquids as powerful cellulose solvents. By using ionic liquids it is possible to separate certain fractions of molecules from pulp. Hemicellulose can thus be isolated to produce dissolving pulp from paper-grade pulp. Dissolving pulp can then be spun into textile fibres such as viscose or lyocell, or utilised in non-woven technical or chemical applications.

Taking a step further, Aalto University took part in the FuBio Cellulose research programme led by the Finnish Bioeconomy Cluster FIBIC Oy, together with a group of other universities and companies, including Metsä Fibre. In a joint effort with a group from the University of Helsinki, the project resulted in a major breakthrough in the summer of 2013, with the discovery of a new type of ionic liquid. The solvent revealed highly stable spin-ning conditions, which led to excellent quality fibres.

When a sample scarf was knitted from the fibres produced by the novel Ioncell process and after the Finnish design company Marimek ko showed interest in the material, a concrete result was displayed in the form of a dress made from birch fibre, launched in March 2014 at Marimekko’s fashion show.

MARKET VOLUME OF TEXTILE INDUSTRY: 100 BILLION TONNES PER YEAR

10 ECHO — 2 / 2015

FIBRES PRODUCED BY THE NOVEL IONCELL PROCESS ARE STRONGER THAN COTTON OR VISCOSE.

PULP VISION

Now that the dissolving and regeneration process has been proven to be stable and simple, the next step is to find a way to recycle the solvent.

“We started later with this part of the process, and while there are cer-tain obstacles, I believe we can tackle them. Basically, we have to be able to recycle close to 100 percent of the solvent. Only then can we seriously consider this process as a candidate to be upscaled. It will take a while, but step by step we are approaching the level where we could be consid-ered an interesting partner for the pulp industry,” Sixta says.

RESEARCH READY FOR THE NEXT LEVEL

In many ways the pulp industry is ideally positioned to contribute signif-icantly to the bioeconomy. Although the existing pulp technology has its roots in the 19th century, the industry has excellent potential to continue to make innovative use of its renewable raw material.

According to Sixta, in the case of taking cellulose fibres to the next level in textile production, it all depends on the available resources. Refining bio-based materials is a very resource intensive business.

“We would of course be able to do the academic research, but lack the re-sources for scaling it up. We would need to produce certain amounts of final products, which would then have to be tested by selected clients for feedback. Also, marketing efforts would need to be launched at the same time.”

If it was up to Sixta’s group, he believes they could deliver the necessary databases for a pre-study, which could then provide the basis for a manag e - rial board to decide whether to invest in the next level. This would be a pilot plant producing around 1 to 5 tonnes of fibres per day, amounting to a value of roughly 20–30 million euros.

Despite the positive buzz around the bioeconomy and its elevated status as one of the Finnish Government’s key projects, the situation regarding the project’s funding is currently uncertain.

“We, of course, appreciate the support of forest companies and public funding agencies, but there is a gap in taking things to the next level. This is partly due to the fact that Finnish companies don’t have their own strong R&D departments in this field anymore, where our knowledge could be built upon and scaled up.”

MULTIFUNCTIONAL FIBRES

Textiles would in any case be Sixta’s choice as the top application for cellulose fibres in the future, for several reasons.

“The industry is massive, and market demand is predictable. Also, pro-ducing textile fibres simply extends upon the existing process concept, since pulp is already produced, so this would be an additional valorisation of the original product.”

Sixta says that cellulose fibres could also enter other businesses such as the production of a new type of cellophane, which is more or less fading out because of the environmental problems related to its raw material viscose.

If transferred into a successful business, textile fibres would also open up possibilities for further research.

“The financial backup would also give us the freedom to explore the valorisation of hemicellulose and lignin, and develop even further uses for this versatile material,” Sixta enthuses.

In many ways the pulp industry is ideally positioned to contribute significantly to the bioeconomy

The goal of the bioeconomy is a low-carbon, energy- efficient society based on the use of renewable natural resources and recyclable materials. Metsä Fibre’s new bioproduct mill in Äänekoski in Central Finland, sched - u led to be completed during the third quarter of 2017, is a practical implementation of these targets.

The bioproduct mill is a prime example of making the most of the valuable wood raw material. In addition to high-quality pulp, it will produce a broad range of bio-products, such as tall oil, turpentine, product gas, bio-electricity and wood fuel. Potential new products created from production side streams include lignin-derived products, sulphuric acid, novel textile fibres, biocompos-ites, fertilisers and biogas.

The mill is designed to allow for a broad, diverse range of products manufactured by a unique bioeconomy eco-system of companies. So far, three companies have been named as Metsä Fibre’s potential partners in developing novel bioproduct concepts.

Together with its part-owner Itochu, Metsä Fibre will continue work on developing a new process for manu-facturing textile fibres from wood pulp. With FA Forest, Metsä Fibre will study potential uses for ash created in pulp manufacturing as a fertiliser and earth construction material. Metsä Fibre has also explored the development path of using pulp in the production of various composite materials in partnership with Elastopoli.

The bioproduct mill will help Finland achieve its goals in terms of renewable energy by producing 2.4 times as much electricity as it needs. When operational, it will increase the share of renewable energy in Finland by more than two percentage points.

MAKING EFFECTIVE USE OF BY-PRODUCTS

The new bioproduct mill in Äänekoski is a prime example of making the most of the valuable wood raw material

FANTASTIC FIBRES

FIND OUT

MORE ABOUT

THE PIONEERING

PROJECT AT

BIOPRODUCTMILL.COM

MOREINFO

12 ECHO — 2 / 2015

GREEN GROWTH

ELECTRONIC FOREST MANAGEMENT IS HERE

L

TEXT: TIMO NYKÄNEN, PHOTO: METSÄ GROUP

Close collaboration between Metsä Group and forest owners will continue to satisfy the growing need for wood. The company has led the industry in developing digital services for forest owners that help to promote sustainable forest management.

Lands used for forestry cover about 86 per cent of the total land area of Finland. Sound forest management practices applied in previous years mean that these woodlands now

have more wood than ever before, so logging may even be increased considerably in a fully sustainable manner. The new bioproduct mill in Äänekoski will increase the annual use of pulpwood in Finland by an estimated four million cubic metres, meaning a rise in national pulpwood demand of about ten per cent. Most of this increase will comprise softwood fibre. Logging of softwood species in Finland can be sustainably increased by as much as 7 million cubic metres.

Timber trading and forestry services at Metsä Group are the responsibility of Metsä Forest, which is another business area of the Metsäliitto Co-opera-tive parent company. The Metsäliitto Co-operative is a consortium of about 122,000 forest owners who supply most of the wood used in Finland by the Metsä Group. Most of Finland’s forested lands are held by smaller private owners or families with

an average holding of only slightly more than 30 hectares per owner.

“A clear restructuring is taking place among forest owners in Finland as they move into cities and generation shifts occur. At 62 years, the average age of forest owners is also currently quite high, although it is gradually falling and the ability to use electronic instruments is increasing accordingly. On the other hand, the forestry management skills of owners are declining at the same time,” explains Juha Jumppanen, Member Services Director at Metsä Group, who is responsible for sales, marketing and development of forest services.

CARRYING THE FOREST IN YOUR POCKET

Demand for forest management services has grown rapidly in recent years, with an increasing number of forest owners seeking comprehensive management of their forest assets on a turnkey basis. Jumppanen says that the underlying principle in developing services has been to make everyday life easier for forest owners and to ensure optimal, sustainable management of woodlands.

14 ECHO — 2 / 2015

GREEN GROWTH

METSÄLIITTO CO-OPERATIVE: 122,000 FOREST OWNERS

AVERAGE FOREST HOLDING OF ABOUT 30 HECTARES PER OWNER

JUHA JUMPPANEN,MEMBER SERVICES DIRECTOR,METSÄ GROUP

“We are also aiming to lead the field in establishing digital formats for the industry, for example by liberating forest asset management from the constraints of time and place through mobile and e-services.”

In December 2014 Metsä Forest launched a mobile application for forest owners that enables them to view maps and aerial photographs of their holdings and to review suggested forestry measures and acknowledge their completion. Forest owners may also use the application with GPS enhancement to navigate from one logging compartment to the next, reviewing such aspects as urgent forestry work, and adding personal notes and photographs to the system. If the forest owner wants to make a trade in wood or requires forest management services, they can send the stand s basic data and photographs with a request for an offer.

The entire forestry chain from seedling stand to pulp mill has long been fully digitised and precisely traceable at all stages. The latest refine-ment in this branch of information technology arrived this summer when Metsä Group became the first operator in Finland to enable online timber trading.

DIGITAL FROM START TO FINISH

The Internet of Things, meaning the Industrial Internet or mutual machine automation is a hot topic of discussion in many sectors, and Jumppanen says that at least the preliminary stages of this process have already been com-monplace in the forest industry for years.

“Forest harvesters have certainly been linked to our information systems in real-time and logging programs have already been uploaded to them electronically for nearly twenty years. Machine operators use the system to view the natural sites indicated by forestry specialists on a digital map of each felling area,” Jumppanen explains.

This means transmitting harvesting informa-tion to the harvesting machine to enable viewing of such details as estimated wood quantities, the timber species in the harvesting area, the dimen-sioning and quality requirements for wood fibre, and any special working instructions indicated by a forestry specialist.

A tachograph usually records the tracks taken by the harvester and its movements across the terrain, and these are transmitted to the forestry tractor that carries the felled trees to a roadside

A MOBILE APPLICATION FOR FOREST OWNERS WAS LAUNCHED LAST YEAR.

Even though forest owners increasingly live in cities, the forest is never far away in Finland, and nearly everyone still has a personal and appreciative relationship with it. Metsä Fibre has developed a Metsä Day service concept that gives customers and stakeholders hands-on experi-ence of the unique Finnish forest environment.

Visitors can take this opportunity to find out about respon-sible forestry practices, the traceability of wood raw ma-terials, and the innovations that form part of modern pulp manufacturing at Metsä Fibre through practical activities that set out the entire process from seedling to mill.

Welcome to Metsä!

Further details are available from Marko Ruottinen (marko.ruottinen@metsagroup.com)

METSÄ DAY – SEE THE FOREST FOR THE TREES

for collection. The timber stock balance details are continually displayed in transport business vehicles so that stocks in the local operating area are known in real-time and may be considered in the wood ordering schemes of pulp and paper mills. Trans-port businesses also use mobile devices to ensure continual updating of stock balances.

EFFICIENT AND SUSTAINABLE WOOD SOURCING

Digital technology promotes transparent and traceable wood sourcing, and the ease of electronic services helps to ensure the availability of raw materials.

“We believe that electronic services will be one factor helping us to ensure supplies, for example when the Äänekoski bioproduct mill begins to require increasing quantities of wood. Simplifying the timber trade and forest management will help to make wood more readily available,” Jumppanen explains.

Co-operating closely with forest owners and securing their commitment to comprehensive forest management also provides a foundation for sustainable forestry. Jumppanen says that regenera-tion services are sold as a part of almost all logging measures, meaning that they now generally include soil preparation and planting of seedlings.

“Whenever a customer submits a call for tenders to our online system concerning regeneration fell-ing and similar services, the program automatically suggests that regeneration measures could also be included in the package. This means that the system has a built-in assurance that we are able to provide the entire package, and that we are also ready to take responsibility for regenerating the forest.”

EXTRACTING MAXIMUM BENEFIT FROM RAW MATERIALS

All Metsä Fibre operations are based on the princi-ple of sustainable development. Our raw material is renewable Nordic wood from responsibly cultivated forests, and is always fully traceable to its source. Over 80 per cent of all wood used in Metsä Group operations comes from certified sources.

Soundly practised, systematic and regular forest management substantially improves the viability of forestry. Good management ensures the growth and diversity of forests, and a steady supply of wood in future years.

“We shall continue to improve our harvesting and forestry methods with a view to deriving even greater benefits from the use of wood raw materials for manufacturing products and generating bio- en ergy,” Jumppanen says.

MARKET REVIEWMETSAFIBRE.COM

TEXT: ARIEL HUI WANG, PHOTO: TUOMAS HARJUMAASKOLA

THE CHINA CHALLENGEFinnish pulp is very popular in the Chinese market. However, strong

competition from emerging markets, as well as the increasing capacity

of China’s local enterprises to provide their own pulp must be taken into

account with regard to Metsä Fibre’s future market share.

16 ECHO — 2 / 2015

ZHANG SHEN JINSECRETARY GENERAL,NATIONAL FEDERATION OF INDUSTRY AND COMMERCE

In the last 20 years, China’s rapid economic development has caught the attention of the world’s major paper companies, with many hoping to gain a foothold in China’s paper mar-ket. Secretary General Zhang Shen Jin of the National Federation of Industry and Commerce believes that China’s future paper market will not have significant growth, so maintaining a parity between capacity and consumption is the idealised goal.

Zhang believes that with the number of Chinese paper companies and industry concen-tration, standards are weak, small-enterprise self-discipline is poor and market competition is intense. The result is a low price for paper prod-ucts with adverse effects on company profits. Since 2011, China’s economic growth has also been in decline and the downturn in the paper industry has been evident. Simply put, paper companies, traders and consumers currently have a lack of confidence in the industry.

Consequently, while China’s paper produc-tion in 2014 reached 118 million tonnes, future market demand is unlikely to show significant growth. The market for different products will also become more diverse and the output of different paper types and market sales will shift. Newsprint and book paper sales, for example, are expected to decline, while packaging paper consumption will rise. Special paper (decorative and medical paper, etc.) will show rapid growth in the short term, but with an excess of market output relative to demand. Likewise, packaging and domestic paper will maintain growth in the short term, but the growth rate will decline. However, sales from Chinese companies are likely to remain strong, with Sun Paper and Nine Dragons Paper continuing to keep their quality high and their supply stable. They could, therefore, dominate the market.

Furthermore, Chinese consumers are becom-ing increasingly aware of the so called ‘brand effect.’ High-end consumers currently have a strong demand for paper brands. Small and medium-sized enterprises understand the im-portance of the brand, but to win market share, long-term nurturing and persistence is required. In the next few years, major paper companies will presumably command a greater market share, leading to a corresponding downturn for small- and medium-sized enterprises.

SUPPLY AND DEMAND CHALLENGES

Regarding the global allocation of resources, China remains a country that is relatively short of forest resources and relies heavily on imported paper pulp. Europe and North America are China’s traditional pulp suppliers and Finland is a leading European supplier, as it is rich in forest resources, has advanced

technology and a long history of papermaking. Finnish pulp has been highly praised by both Chinese companies and consumers, and Finland’s large paper companies and Chinese concerns continue to enjoy a strong cooperative relationship.

Metsä Fibre is a well-known pulp supplier to the Chinese market and supplies large export volumes. However, countries including South America and Russia are also now developing their own pulp supplies to the region. Coupled

Chinese consumers are becoming increasingly aware of the so-called “brand effect”

with the continuously improving ability of China’s companies to produce their own pulp-capacity, how should Metsä Fibre maintain and enhance its competitiveness?

Secretary General Zhang suggests that the company should maintain its successful brand image and strong market visibility. It should continue to focus on environmental protection and sustainable development and use its exper-tise to guide and assist Chinese paper companies in sustainable development. “Metsä Fibre must further establish a reliable customer relation-ship in China. It must have a stable customer supply capacity, and cannot let the market affect the customers’ product supply. With the company’s outstanding product quality and reasonable product price and by working together with the Chinese paper companies, it can create a win-win cooperation mechanism,” states Zhang.

18 ECHO — 2 / 2015

PARTNERSIN PULP

“A presence in China is almost essential for any pulp producer or trader – there is no doubt about it.”

JIN ASADACEOITOCHU FIBRE LIMITED

General trading company Itochu provides a uniquely well-informed point of view on the Asian market for Metsä Fibre’s offering.

THE PARTNER PERSPECTIVE

TEXT: IAN FENTON, PHOTO: JUSSI SÄRKILAHTI AND VELHOT / JACK TAYLOR

DAISUKE SODA, GENERAL MANAGER OF ITOCHU’S CHINA PULP DEPARTMENT, EXPLAINS PRECISELY HOW THE EXTRA VOLUMES PROVIDED BY ÄÄNEKOSKI WILL AFFECT THE COMPANY’S ENDEAVOURS.

20 ECHO — 2 / 2015

Metsä Fibre relies on a network of expert partners to distribute pulp in various markets around the world. In Asia, this task is handled by the pulp division of

Itochu, the second-largest “sogo shosha” (general trading company) in Japan, which also possesses an ownership stake in Metsä Fibre.

The two companies have been collaborating in various capacities for decades, sharing re - so urces and pooling complementary strengths in different markets. With this in mind, the com-pany’s sales force may be the single best resource on the Asian pulp market and its complexities. We asked them to share their thoughts on the current climate in Asia and the opportunities it presents for Metsä Fibre.

ALL ROADS LEAD TO CHINA

Itochu are under no illusions about the state of the world’s pulp markets, and locate the most meaningful signs of growth in Asia, particularly China and the South-East Asian countries. Tatsuro Kimura, deputy manager of the com-pany’s Overseas Pulp business section, provided a summary of their view.

“Pulp for paper in the so-called first-world countries is not enjoying huge growth at the mo-ment,” he points out, “at best sustaining current levels if not actually declining. So the growth is primarily in the Asian markets, particularly China.”

Jin Asada, CEO of Itochu Fibre Limited in London, concurs. “Nowadays, the demand for market pulp worldwide is over 50 million tons per year, of which China represents close to 30 per cent. A presence in China is almost essential for any pulp producer or trader – there is no doubt about it.”

Some have commented that growth in Asia is stalling. Kimura takes this into account, but remains enthusiastic about the area’s possibil-ities. “Yes, the growth level has not been the same as, say, five years ago, but we still see pretty strong growth there. The demand definitely exists, especially in the tissue paper sector. We see huge potential there.”

ÄÄNEKOSKI IS CRITICAL

When huge potential is mentioned, a natural follow-up question might relate to how this potential can be addressed. Itochu’s pulp spec- ialists, however, need no such prompting, and are quick to bring Metsä Fibre’s new Äänekoski bioproduct mill into the conversation.

“I think that the upcoming project in Äänekoski will arrive with perfect timing to accommodate the new demand we’re talking about,” Kimura enthuses. “First of all, it is the single largest softwood pulp mill in the world. And when its additional capacity is added to the current volumes, Metsä will be the largest sup-plier by far to the Chinese market. That’s going to change the pulp game quite a bit.”

Daisuke Soda, general manager of Itochu’s China Pulp department, explains precisely how this extra volume will affect the company’s endea vours. “With the additional volume,” he says, “we now have the option of exploring new sales possibilities, whereas in the past we had to limit ourselves to a certain number of customers. Our foremost strategy at the moment, not just for China but for the whole of Asia, is to expand our customer base, and we now have the volumes to do so.”

THE FINNISH CONNECTION

With various Chinese industries tending

LOREM IPSUM DOLOR SET MAURIS LIBEROLOREM IPSUM

PARTNERSIN PULP

ITOCHU’S SALES FORCE MAY BE THE SINGLE BESTRESOURCE ON THE ASIAN PULP MARKET AND ITS COMPLEXI-TIES

M

towards overcapacity, pulp included, it might be tempting to ask why supply is needed from a small European country in the first place. Why is Botnia Nordic pulp still an appealing prospect on the Chinese market?

“It’s a good question,” laughs Asada, “but there is a perfectly logical explanation.” He goes on to explain how the dynamics of pulp export have developed in the past few years.

“If you look at the various regions of the world in terms of softwood, the US and Canada used to be the mecca of softwood for the Asian market, but producing pulp in North America is getting more and more difficult by the day because of the environmental issues. Cost issues play a role here also: wood procurement is getting more difficult and the labour costs are among the highest in the world.”

Soda elaborates: “In China, we need to compete with other softwood pulp suppliers and quality is one of the most important issues. For example, we are now trying to expand our sales to the tissue and hygiene sectors, and here, quality is the most important issue. Fortunately, with Botnia Nordic pulp, we can differentiate in terms of this need.”

SERVICE WITH A SMILE

According to these representatives of Itochu, it isn’t just quality that sets Metsä Fibre’s offering apart in China and the other Asian markets.

“It’s important to point out,” says Kimura, that Metsä Fibre’s products are well suited to all applications. They don’t limit themselves to any single use in particular.”

This property provides partners such as Itochu various options to approach selling them. Where Chilean pulp may be marketed exclu-sively for board making or Canadian product

LOREM IPSUM DOLOR SET MAURIS LIBEROLOREM IPSUM

THE PARTNER PERSPECTIVE

“With Botnia Nordic pulp, we can differentiate in terms of quality.”

DAISUKE SODAGENERAL MANAGER, CHINA PULPITOCHU

PARTNERSIN PULP

22 ECHO — 2 / 2015

With members of Metsä Fibre’s Technical Customer Service team actually based in Shanghai, and sitting together with Itochu personnel, fruitful conversations and discussions with the customer are simple to arrange.

THE PARTNER PERSPECTIVE

24 ECHO — 2 / 2015

PARTNERSIN PULP

24 ECHO — 2 / 2015

sold on the basis of high strength, Metsä Fibre’s Botnia Nordic pulp is adaptable, with a flexibil-i ty allowing it to match the customer’s specific industry or individual needs.

In addition, he points out the advantage of years of pulp and papermaking expertise, which permit Metsä Fibre to assist its customers with unique technical services.

“Their strong technical customer service team – which we can actually utilise in Asia – can have in-depth conversations with customers who require specific technical assistance.”

With a team actually based in Shanghai sitting together with Itochu personnel, as well as the experts based in Finland, fruitful conver-sations and discussions with the customer are simple to arrange.

“We’re still trying to make our penetration into markets where local suppliers already have a strong presence,” Kimura points out. “In order to make that work, technical customer service is actually one of the key points in terms of being able to persuade our customers of the benefits of using Metsä Fibre’s pulp.”

SHARED VALUES

Like the best salesmen, Itochu’s pulp division certainly know their product, along with the

most persuasive arguments needed to convince Asian customers to take it into use. But there appears to be a deeper synergy at work, one that even the decades of collaboration with Metsä Fibre they have enjoyed may not wholly explain.

Kimura tries to nail the elusive properties of this partnership down: “Over the time I’ve worked with Metsä Fibre, I began to realise that we have similar values. We share a very sincere approach, and we’re both basically dedicated to long-term business relationships.”

“There is a strong team spirit between us,” he continues, “and this obviously has to do with the company itself, but also perhaps the nature of our two nations as well.”

There may well be something to this. Could it be that the cultural associations of Finland and Japan complement each other in terms of perceptions of commitment, trustworthiness, and quality? It would certainly be no disadvan-tage to either party in their activities if this were the case.

Either way, this is certainly a unique colla-boration: a Japanese sales force representing a Finnish company in China and elsewhere, providing a bridge from Europe to the far-flung Asian markets, rich in potential and hungry for expert guidance.

ITOCHU’S PULP EXPERTS DISCUSS THE PROSPECTS FOR METSÄ FIBRE’S SALES IN ASIA. (L-R) TATSURO KIMURA, FUMIHIKO YAMADA, DAISUKE SODA, TSUTOMU YAMAUCHI.

“Growth in pulp today is primarily in the Asian markets, particularly China.”

TATSURO KIMURADEPUTY MANAGER, OVERSEAS PULPITOCHU

THE PARTNER PERSPECTIVE

26 ECHO — 2 / 2015

“Continuous improvement is very deep in our culture,” says Ismo Nousiainen, Metsä Fibre’s SVP, production. For anyone who has seen this commitment to improve-ment reverberating throughout the organisation, his statement would be hard to dispute. But how did such

a culture develop in the first place?According to Nousiainen, it is the result of long-term thinking. “We

know that in all areas, if we don’t improve our results continuously, we won’t succeed in the future. And we also know that for all the ambitions we have, the time frame is very long: you have to work for years at a stretch to get these results.”

The company’s results, in terms of environmental performance, cost effectiveness, and success in their markets worldwide, are strong evidence supporting Nousiainen’s position. He ascribes them to the early emphasis on innovation. “Continuous improvement is all about success in the future. This applies to the environmental side, the production side, cost efficiency, energy efficiency, and virtually every other area.”

FIBRE TECH

IF WE DON’T IMPROVE OUR RESULTS CONTINU-OUSLY, WE WON’T SUCCEED IN THE FUTURE

DEVELOPMENT NEVER ENDSAt Metsä Fibre, the company culture of continuously improving environmental performance has helped to establish a number of competitive advantages. These long-term accomplishments must have begun somewhere, but where?

TEXT: IAN FENTON, PHOTO: METSÄ GROUP

C

THE BIRTH OF TODAY’S APPROACH

In the past decade, the issues, challenges and questions which fall under the umbrella term ‘sustainability’ have come to dominate the world’s consciousness, and the term has found voice at every level, from governments, to the media, to the general public.

With Metsä Fibre now benefitting from envi-ronmental performance aims set a number of years ago – long before the eruption of concern over this topic – it is tempting to ask how they were able to anticipate this. How did the importance of improv-ing environmental performance first manifest itself?

Nousiainen casts his mind back to the company’s reflections on sustainability metrics at the turn of

the millennium. “We began to notice that our per-formance in terms of waste water, carbon emissions and energy efficiency was in good shape compared to the competition. With some commitment and a concentrated effort, this began to look like an area in which we could establish a competitive edge.”

In the beginning of the 2000s, a strategic decision was made: Metsä Fibre established an

environmental policy, stating the company’s aim to be the forest industries’ forerunner in terms of environmental performance.

FROM STRENGTH TO STRENGTH

If we turn the clock forward once again to the present day, we see, of course a near-universal understanding of the importance of sustainable processes and business models that take dwind-ling natural resources into account. When asked to point to Metsä Fibre’s greatest achievements in respect of environmental performance, Nousiainen is quick to answer; it is easy to imagine that such memorable achievements are never too far from the top of his mind.

“In terms of waste-water effluents, in 2007 we generated 40 cubic metres per tonne of pulp produced. Today in 2015, it is under 25. We show very strong improvement there. Then when you consider COD (chemical oxygen demand) effluent, in the beginning of 2000 that was 19 kg per tonne of pulp. Nowadays it is 11. Once again, an achievement to be proud of.”

ISMO NOUSIAINENSVPPRODUCTION

28 ECHO — 2 / 2015

But Nousiainen also emphasises that environmental performance is not improved as an isolated metric. There is, in fact, a strong rel-ationship between environmental performance and production efficiency. In practice, the pulp mill with the lowest emissions figures, for exam-ple, will always be the one with the most stable production.

“As we increase production efficiency, we are increasing availability,” he explains. “By reduc-ing equipment failures and process disturbances, we keep availability high, but also reduce our emissions.”

But this is easier said than done. Maximis-ing production efficiency and environmental performance in this manner, Nousiainen tells me, requires active process development and constant attention.

“We have developed our preventive mainte-nance, and we have developed the view our oper-ators have over the process. If they see an action that could boost availability, they can record this on our system. Likewise, if they notice some-thing that could present a threat to availability, we can make the necessary corrections before suffering a drop.”

These efforts and annual investments targeted upon reducing threats to Metsä Fibre’s high availability levels have certainly borne fruit. In the past three years alone, the already-impressive figure of 95 per cent availability has increased to over 97 per cent.

MINIMISING ALL THE WAY TO ZERO

Another area in which Metsä Fibre has excelled is in the reduction of CO2 emissions. At the company’s Joutseno mill, Nousiainen explains, the recent introduction of a gasification plant provides gas for the facility’s limekiln, replacing natural gas as an energy source with biogas.

“We can now use our own bark as a fuel source after debarking our wood, replacing the fuel we had to buy in from outside the mill. As well as being more efficient, working this way

means that we have no CO2 emissions in the normal operations of the plant.”

At the time of the gasification plant’s addi-tion to Joutseno in 2012, the facility became the first CO2 neutral plant in Finland. With the technology now proven, lessons learned at Joutseno will, of course, be implemented in the company’s new mill at Äänekoski. Carbon- neutrality has become a strategic cornerstone, but as we shall see, the journey isn’t over yet.

THE CUSTOMERS’ NEEDS COME FIRST

Metsä Fibre’s continuous improvement to envi-ronmental performance is certainly impressive in and of itself, but Nousiainen is keen to point out that the customer is the ultimate object of all this effort.

In the future, he tells me, environmental regulations and requirements for Metsä Fibre’s customers’ products will become tougher and tougher. “We all know about the need to limit CO2 emissions in the value chain, but we can also expect to see the authorities imposing strict limits on water consumption.”

Fortunately, the future-oriented approach espoused by the company right in the beginn-ing continues to this day. “When we work to improve our environmental performance, we are essentially making it possible for our custo-mers to meet their regulatory requirements in the future. By taking our pulp into use, they will be in a position to succeed in the future without dramatic investments or process changes. We are way ahead of the require-ments, in that sense.”

IT NEVER ENDS

Having discussed past decisions and on-going policies and their effect on the present situation, the question of the future remains. Nousiainen again points to the need to be ahead of the game. “Regulations impose certain permission limits, relating to effluents, for example, but these are not our targets. We establish our own limitation targets, which are much lower

FIBRE TECH

WE CAN NOW USE OUR OWN BARK AS A FUEL SOURCE

than those the authorities apply. This is really the motivation behind continuous improvement. By continuously improving our performance, we can be a confident supplier to our customers for many years to come.”

At the moment, improvement efforts are being applied to yet another area: odorous gases. At Metsä Fibre’s Rauma mill, a new odorous gas boiler is now being taken into use, ensuring that these gases can be treated in all circumstances, preventing unpleasant odorous disturbances in the vicinity of the mill en - ti r ely. Joutseno has already seen the introduction of a new system for odorous gas treatment, and the results have been very encouraging.

The topic of sustainability has certainly reached a mature point, though, and Nousiainen sees CO2 emissions as continuing to dominate the agenda for many years to come. Waste water, emissions to air, energy efficiency: these are the watchwords of environ mental performance, and are unlikely to change before long. One thing is clear, though. At Metsä Fibre, continuous improvement in every area will continue to be the aim. It simply never ends.

DEVELOPMENTNEVER ENDS

30 ECHO — 2 / 2015

FIBRE TECH

WASTE-WATER EFFLUENTS2007–2015

38.3% DECREASE IN

COD EFFLUENTS2000–2015

42.1% DECREASE IN

FOSSIL CO2 EMISSIONS2010–2014

20.8% DECREASE IN

30 ECHO — 2 / 2015

The green gold is what we call the forests here in the Nordic countries. I fully agree, for various reasons. To us, the forests are much more than just the most remarkable natural resource. Our forests provide both a source of recreational nature values and the renewable raw material for daily commodities. Our forests grow nowadays more than ever. In Finland, only 60 per cent of the annual growth is used. In the summer season, when the northern half of the globe enjoys the sunlight day and night, our trees grow even more intensively than their peers in the south.

When facing the big issues, such as deforestation and hydrologic cir-culation, you realize the importance of complete ecosystems and their effects on the surrounding environ-ment – and in the end, on our global climate.

Forest certification covers today about 90 per cent of the Finnish for-ests. While we take this for granted, let’s keep in mind that the share of certified forests in Asia, Latin America and Africa, has recently reached 2.2

GREETINGS FROM THERE, WHERE THE GOLD IS GREEN

COLUMN JUSSI RIPATTIDirectorSustainable ForestryMETSÄ GROUPjussi.ripatti@metsagroup.com

per cent. Globally, certification covers about 10 per cent of the forests. To sum it up, certification is the key for having this sustainably managed valuable raw material available even in the future.

Understanding the close connec-tion between this multifunctional natural resource and its sustainable use is possible through figures and history: every fifth ordinary Finnish family owns a piece of forest – me being one of the private forest owners. Our forest act, first given in 1886, is the oldest in the world: its key mes-sage is “to renew your forest always when utilizing the wood it provides”. It has guided us towards sustainable forest management.

Our unique concept of “every man’s right” is something worth explaining, too. It means everyone is legally entitled to enjoy the forests’ recreational asp-ects, outdoor activities, hiking as well as picking berries and mushrooms. No entrance tickets needed – just go and enjoy. According to various researches, forests are an excellent place to make your mind and body relaxed.

Managing the forests sustainably also offers regular and continuous income to forest owners. The raw material is processed with the best know-how to create the best end-use product. The wood from these forests ends up included in the daily lives of millions of people as buildings, tissue, food packaging and furniture, to men-tion just a few. In addition to those, we have wood-based solutions in our daily commodities, such as in tooth paste or yoghurt.

When diving deeper into any daily commodities, we meet an interesting question: can you name any other material, whose origin can be followed as thoroughly as wood’s? All the wood Metsä uses can be traced back to the forest. Tracking the origin of wood is something we at Metsä Group are pioneers in.

Next time you are in touch with certified wood, you can take it as a message: “This wood came from a forest where there’s room for differ-ent values and functions. This forest continues to grow”.

32 ECHO — 2 / 2015

SEEDLINGS

METSÄ FIBRE REACHES EFQM EXCELLENCE AWARD FINALS

Responses to the 2014 customer satisfaction survey indicate that Metsä Fibre has invested wisely in improving uniformity of quality and managing imperfect batches by intro-ducing the prime quality management concept and the FOX index at all of its mills. The company’s Far East logistics have also become significantly more efficient. Development work has also brought results, as Metsä Fibre is now more strongly regarded as a good and reliable partner. One good exam-ple of this is a 55 per cent reduction in the number of claims compared to the level in 2013.

Responses to the 2015 survey suggest that the company should continue to invest in enhancing e-services such as FibreOnline, shipment traceability and the availability of transport docu-mentation. Other important futu re priorities are improving customer skills throughout the supply chain and work to streamline and enhance communications at the customer interface.

“Informal feedback from customers is important to us, as it promotes ongoing efforts to improve our opera-tions. For example our manufacturing unit has used customer feedback to identify the priorities that form a basis for concrete measures included in

annual mill action plans,” explains Joutseno Mill Manager Jaakko Anttila, who was responsible for implementing this year’s survey.

CONTINUOUS DEVELOPMENT WORK WITH AN EAR TO THE CUSTOMERNew survey findings indicate a record high level of customer satisfaction with Metsä Fibre operations.

Metsä Fibre won the Finnish Quality Award competition in 2012, and was keen to see how its standards meas-ure up against those of its European peers. As a newcomer to European- level competition, the company managed to gain a place among the last 15 contestants, which included manu facturing units from Bosch, BMW and Coca-Cola. An internation-al panel of seven assessors visited the operations of Metsä Fibre in May, interviewing staff at the company’s mills and Head Office.

“We have found that taking part in competitions increases our moti-vation and boosts our R&D work. It has also been great to see how the competition inspires our peo-ple, and to hear them ask about how we are doing,” says Metsä

Metsä Fibre entered the pan-European EFQM Excellence Award competition for the first time this year, reaching the finals for large private enterprises at the award ceremony held in Brussels on 22 October.

Fibre Product Development VP Ursula Lumme.

“We asked some of the assessors to visit us again in the autumn so that we could go over their comments togeth-er. Then we’ll do our own work on the results and decide on new develop-ment measures,” Lumme explains.

Developed by the European Foun-dation for Quality Management, the EFQM Excellence Model is a comprehensive business evaluation and development tool that helps companies identify their organisa-tional strengths and shortcomings, and gauge their progress towards excellence. Metsä Fibre has been applying EFQM criteria as the basis of its quality work since the start of the new millennium.

TEXT: TIMO NYKÄNEN

TEXT: TIMO NYKÄNEN

THE EVENT GENERATED A DIVERSE DISCUSSION ON THE FUTURE OF THE BIOECONOMY.

TEXT: TIMO NYKÄNEN, PHOTO: JUSSI SÄRKILAHTI

PERSPECTIVES ON THE BIOECONOMY

Metsä Group assembled experts and authorities with diverse backgrounds for a round table discussion promoting the bioeconomy.

Promoting the bioeconomy will call for a broader change in thinking patterns and interdisciplinary collaboration. This was the conclusion of a round table discussion on the bioeconomy arranged by Metsä Group at the end of September. The event heard presentations from Sirpa Pietikäinen, Member of the European Parliament, Jussi Haarasilta, Vice President and Head of Underwriting of Finnvera, Liisa Rohweder, Secretary General of WWF Finland and futurist Mika Aaltonen. About 20 representa-tives of various stakeholders took part in the round table.

Opening the event, Metsä Fibre CEO Ilkka Hämälä and Riikka Joukio, SVP Sustainability and Corporate Affairs at Metsä Group, stressed the importance of the forest industry as a key player in promoting and enabling the bioeconomy. Figures compiled by the Finnish Forest Industries Federation indicate that this sector generates

about two thirds of Finland’s renewable energy. “In addition to bioenergy and conventional pulp and paper industry products, we now produce various modern biomaterials and chemicals. Metsä Group products are already used in more than 80 countries around the world,” Hämälä explained.

“We are already an important stakeholder in the bioeco-nomy, with operations based on processing wood from sustainably managed forests into high-quality products that are also recyclable. The new bioproduct mill, now under construction in Äänekoski, is a significant step forward for the Finnish bioeconomy. For the sake of a sustainable future, it is now important to engage in full and frank dialogue on opportunities and limitations from the perspectives of regulation, competitiveness, use of resources and financing,” Riikka Joukio continued.

34 ECHO — 2 / 2015

FIBRES OF SUCCESS INNOVATIVE PRODUCTS FROM CELLULOSE FIBREBRANCHING

OUTTEXT: TIMO NYKÄNEN, PHOTO: SHUTTERSTOCK, SOURCE: AQVACOMP / JARI HAAPANEN

34 ECHO — 2 / 2015

10 MT/A 30% LIGHTER

>25%

The average modern passenger motor vehicle includes nearly 180 kg of polypropylene-based plastic materials, with annual consumption of mineral-filled polypropylene in the automotive industry alone amounting to approximately 10 million tonnes. This is a substantial market opportunity for cellulose fibre composite as a substitute material.

Replacing current composites reinforced with hemp, flax and other cultivated fibre materials with the Wet Web Forming composite would immediately reduce product weights by about 30 per cent.

Manufactured using the Wet Web Forming technology patented by Elastopoli Ltd in 2014, the Aqvacomp biocomposite provides a properties to weight ratio that is about 25 per cent better than respective fibreglass and mineral-filled composites.

WITH GENUINE FEELING As a bio-based material, one important advantage of the Aqvacomp biocomposite is its pleasant feel to the hand. Among the first products to be made from this new material are various musical instrument components that are not only nice to touch, but also have outstanding acoustic properties compared to conventional plastics. Other potential market opportunities include the automotive industry, consumer electronics and packaging.

Established in 2014, Aqvacomp Oy manufactures plastic composite materials at a facility in Sastamala, Western Finland. Its manufacturing technology is based on the work of Elastopoli Ltd, a rubber and plastics industry development company that is an R&D stage partner of the new Metsä Fibre bioproduct mill. Aqvacomp aims to launch cellulose fibre composite manufacturing on an industrial scale in 2017.

www.aqvacomp.fi

www.elastopoli.fi

Aqvacomp biocomposite is an inno-vative, sustainable, energy-efficient combination material that uses natu-ral cellulose fibre as reinforcement in plastic. What makes this product unique is that the fibre can be blen-ded into the plastic directly from the pulp production process without drying, deriving optimal benefit from the reinforcing properties of the fibre. The ideal location for manufac-turing this new biocomposite is thus right next to a pulp mill, which would enable biocomposite production capacity of about 8–10 tonnes per hour.

FACT-BOX

A STRONG COMBINATION OF PULP AND PLASTIC

The Future of Online Pulp Trading