UPM FLASHUPM AP CUSTOMER MAGAZINE 3/2011

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UPM foothold in Taiwan secured by trust

From forest to paper, the story of our Water Footprint

UPM IN JAPAN – ACHIEVING TOGETHER WITH CUSTOMERSThe “3-11” triple catastrophe combining an incredibly powerful earthquake, a huge tsunami and a crippled nuclear power plant was “the biggest catastrophe to hit Japan since WW2” and the impact it has cast throughout the country, the society and the economy still remains fresh today, even it is already six months away. It will probably carry on for next 10 years.

Even if the country has tried its best to keep everything under control and people have showed courage, faith in their behavior, Japanese were deeply shocked and tottered inside. To a great ex-tent, Japan will never be the same as it used to be in the perception of the majority – people’s basic thinking has changed in many aspects of life.

Through the human despair and considerable confusion in government follow up, people’s spirits were lifted with uncountable signs of compassion and help from foreign countries - from govern-ments, companies, NGO’s, celebrities and normal citizens all alike. In business, many long term relations were tested in how foreign contacts reacted to the sudden problems their Japanese custom-ers encountered from various catastrophe impacts. Some ran away, some turned their backs, some showed resilience and support – and turned the bad situation into an opportunity to re-strengthen the old ties.

As UPM local leader, I am proud that we chose the latter approach. Given the first news of fear for lack of supplies from two disrupted paper mills in the north-east coast, UPM responded immediately to customers’ request and was able to deliver paper to meet the demand in short notice. More than just a temporary move, our sup-port helped to again demonstrate our commitment to the customers. A positive response from them has become the new mutual, promising business plans with steady growth together further ahead.

“Trust and to be trusted. Achieve together. Renew with courage” are the new company values this year. They are well reflected in the way we conduct our business. Fac-ing the difficult situation in Japan, we managed to pull all the values with our customers. We built the bridge of stronger ties in trust, renewed our relationships, and achieved new business together. Now we are reaping the results of our efforts.

Timo VarhamaGeneral Manager

UPM-Kymmene Japan

EDITORIAL

UPM Flash is a quarterly magazine for UPM paper customers in the Asia Pacific region.

EDITORIAL BOARD: Vivian Wang, Jackie Bao, Mary Ma, Zheng Guo-hua, Zhao Ye

EXECUTIVE EDITOR: Ada Qin (Chi-nese Version), MOLI Design (Chinese and English Version)LAYOUT: MOLI Design

PAPER: UPM Finesse premium silk 200 g/m2 (cover), UPM Finesse premium silk 130g/m2 (inside)

SUBSCRIPTION: fax 86 (21) 5292 8912 or email upm.flash@upm.com

Please email your feedback on Flash magazine to: upm.flash@upm.com UPM in-house magazine

UPM FLASH3/2011

photo: Tony McN

icol w

ww.tonym

cnicol.com

UPM China & Asia-Pacific Sales Network

Shanghai: 86 21 6288 1919

Korea: 82 2 723 0555

Hong Kong: 852 2527 0177

Singapore: 65 6838 7280

Japan: 81 3 5778 2660

Australia: 61 2 9334 5000

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/ 3. 2011 / UPM FLASH 2

CONTENTS

17

18

From forest to paper, the story of our Water Footprint

EDITORIAL 02

NEwS 04

TEChNOLOgY fRONTLINEUnraveling the Metamerism Mystery 20

PRODUCT AND SERVICEUPM Fine preprint paper 16

COrPOraTe resPOnsiBiLiTYUPM teaches environmental virtues to summer campers 17

From forest to paper, the story of our Water Footprint 18

reaDersHiP sUrVeYUPM Flash Readership Survey 22 08

06feaTUre sTOrYUPM supports the New Generation Plantation Project 08

UPM points way for the printing paper business 10

CUsTOMer sTOrYThe copy paper demand in the information age 12

UPM foothold in Taiwan secured by trust 14

UPM FLASH / 3. 2011 / 3

Dear Customer,

We are pleased to confirm that UPM has closed the deal of acquiring Myllykoski on August 1st.

Together, UPM and Myllykoski are a good fit. We are confident that our combined expertise in publication papers will be beneficial for your business. Our aim has been and will be to offer our customers world class services and products that are produced in an environ-mentally sustainable way.With this transaction we are creating a cost-competitive, stable long term partner who has a strong vested interest in paper and print.

Combined, UPM and Myllykoski, will result in improved geographic footprint with several new local mills in Central Europe, especially in Germany, and in North America. This ensures our possibilities to serve and enhance supply security. Our ability to meet our customers’ needs and to operate on a world-wide basis including new growth markets will be better than ever. Our combined product portfolio of-fers a complete range of alternatives for any kind of printed products.

Now that UPM’s acquisition of Myllykoski has been closed we will swiftly move into a jointly planned integration phase. Our aim is to move speedily in all organisational matters as well in finalising our

plans based on an asset review.

In the interim your contacts will keep you informed of new develop-ments as well as continue to take care of your day-to-day business. We will honour the currently valid sales contracts and commitments made by UPM and Myllykoski sales organisations. We will be very active in our communications towards you in the next few months.

The new product names will be migrated into UPM order processing systems in due course after a short IT transition period. Please visit also our brand new website www.upmpaper.com to learn more about our extensive product range and services.

We all are fully committed to print media and to serve you in the best possible way, furthermost we will continue to improve our mutually beneficially relationship over the coming years.

Yours sincerely,

Jyrki OvaskaPresident, UPM Paper Business Group

NEwS

On June 27, the “Environmental Paper and Sustainable Lighting Seminar” sponsored by Ricoh was held in Hong Kong. Ricoh recruited UPM’s environmental expertise and invited UPM representatives to speak on the developing market for environmental copy paper during a forum.

At the seminar, speeches and discussion topics highlighted environmental paper, envi-ronmental certification, how to purchase certified paper, and the function of LED lighting for commercial development. Approximately 40 guests attended the seminar, and most

attendants were Ricoh customers. UPM noted that green paper seminars being sponsored by third parties is a

sign that environmental friendly paper has become more and more recognized in the market.

UPM and Ricoh partner in green seminar

The company name of “UPM-Kymmene (Changshu) Paper Industry Co., Ltd.” for-mally changed to “UPM (China) Co., Ltd.”.

The previous company name will be offi-cially and completely replaced by the new company name from September 1, 2011.

The company name change will not lead to any other changes in legal entity, invest-ment relationship, contract information and contractual rights and obligations, etc.

Notice of company name change

/ 3. 2011 / UPM FLASH 4

NEwS

As the major paper supplier for domestic magazines and periodi-cals, UPM was honored with an invitation to attend in Zhengzhou the Fifth Annual Conference on China Science Press Journals. Wang Yunjiang, the deputy manager of UPM technical sales team, gave a speech at the conferences titled “Development Trends and Technical Requirements of Journal Paper.”

Wang discussed perspectives on international development trends and a reflection on UPM’s experience. Wang summarized journal paper trends as “low basic weight, high-whiteness and environ-mental protection.” Also, users are seeking reduced cost, and improved quality. The introduction of environmental-friendly paper has provided customers with the option to select paper certified by sustainable forest management system, to support good environmental practice.

UPM Global website domains will unify under www.upm.com. Links to regional or functional sites can be accessed by selecting from option menus at the homepage.

UPM represented the paper industry in Shanghai on June 22 and 23, introducing for-est certification to the Fourth International Conference on Sustainable Forests and Mar-ket Development.

The conference, which explored this year the theme “Forests • Markets • Policy • Prac-tice”, is sponsored annually by the Research Center for Economics and Trade in Forest Products of the State Forestry Administration (CINFT, SFA) and The Nature Conservancy

(TNC). The conference discussed public poli-cies and business practices of the legal and certified forest product market, seeking to improve the ability of enterprises to manage challenges and opportunities while balancing environmental policies, public policies, and consumer demands in supporting certified forest products and practices.

During the afternoon session of the opening day, UPM Environment Marketing Manager, Mary Ma, took center stage to present “Paper

Industry and Forest Certification.” Mary de-tailed the positive achievements and experi-ences UPM has had in China, and discussed current topics such as how forest certification can help Chinese enterprises to improve their bottom lines.

UPM’s leadership as an advocate of forest certification has made the paper manufacturer the leading biofore company in the world and an industry leader of forest product produc-tion and management.

UPM provides advocacy at the fourth International Sustainable Forests Conference

UPM attends prestigious science journal conference

Welcome to visit www.upm.com

UPM FLASH / 3. 2011 / 5

The mill area of Changshu paper mill is lo-cated on the north bank of the Yangtze River near the Sutong Bridge. When the bus entered the mill gate, we could see the container yard with neatly stacked containers and contigu-ous scattered mill buildings in the distance. The bus led us directly to the living area. Outside the windows, there was a large green lawn, and basketball courts and tennis courts not far away from us. Some employees were playing there, suggesting that the company values balance between relaxation and work.

On the next morning, the UPM production

technical department conducted presentations which gave us a much deeper understanding of UPM’s paper production process.

In the afternoon, we rode a bus to visit the mill. Outside the bus, there were large sites to be built, and lush grass grew.

There was a tall chimney beside the wharf con-nected with a nearby power plant. Such chim-neys are rare now. There was a water treatment plant located on the bank of a circular pool, in the process of purifying and recycling the water used in the paper-making process.

Paper machine No.2 we visited produces the printing paper that we often use. complex appearance was impressive. We looked at various precise inspection and testing instru-ments in the checkout room, saw the circula-tion from massive rolls of rewound and cut paper, and observed the cutting and packag-ing processes along the conveyor belt. The whole process of green paper-making was laid out before us in a day and we left with feelings of great admiration for our hosts and their successful operations.

Printer pays UPM a “Green Visit”Accepting UPM’s invitation, the guests from C&C China group visited UPM Changshu Mill on June 1. The mill’s working environment, advanced equipment and modern management impressed the guests. After the visit, Mr. Cai Wen Yan from C&C Joint Printing wrote an article entitled “Green Visit.” Below is an excerpt of the article:

Text / Photos: Cai Wen Yan

/ 3. 2011 / UPM FLASH 6

NEWS

UPM Changshu Mill launched in September the new packaging for UPM Fine and UPM Finesse classic gloss and matt which will proudly carry “the Biofore company ”logo.

The newly packaged paper products will be phased in over the coming months while the stock for the products carrying the previous design is run down.

The brands included in the winning bid are:

UPM Jetset, UPM Classic Jetset, UPM Copykid, UPM Yes, Future

The brands that have been recognized:

UPM Green Jetset, Office, UPM Yes, UPM Jetset, UPM Copykid, Future

UPM wins bid to supply the State Organs Work Committee of the CPC 2011 information project.

UPM earns China Environmental Labeling Product Certificate

Changshu Mill unveils new wrapper for graphic paper

Reel paper wrapper

Folio sheet paper wrapper

UPM Fine UPM Finesse classic

China Environmental Labelling

UPM FLASH / 3. 2011 / 7

Text: Ada Qin Photos: UPM

Environmental groups and businesses see planted forests (or plantations) as the future of sustaining a global wood and fibre supply.

UPM was a founder member with the World Wildlife Federation (WWF) in the New Gen-eration Plantation Project (NGPP) in 2008.

In March, UPM Environmental Manager An-drew Heald came to China as a company rep-resentative for a NGPP investigation group. The purpose of his seven-day trip was to tour Yunnan’s forest plantations.

“What struck me most, was that everywhere we visited there was development and con-struction (of roads, buildings etc.) that relied heavily on natural resources, particularly tim-ber,” says Andrew.

NGPP, founded in 2008, has responded to the growing need for understanding planta-tions and their impact on forest landscapes,

biodiversity conservation and human needs. NGPP aims to improve plantations by sharing information gleaned from case studies and the experiences of participants.

A world leader in conservation, WWF tackles the toughest issues facing our planet today. Forest products are renewable. When ac-quired from well-managed forests and plan-tations, forest products have a lower carbon footprint than alternatives like steel, concrete and plastic derived on fossil resources. WWF believes that NGPP can play a major role in maintaining the planet’s natural capital.

“UPM wants to be the leader in the sustain-able management of plantations,” Andrew comments. “We have maintained a close working relationship with WWF for many years. Through NGPP we have been able to share best practices and to learn the best tech-niques for sustainable management.”

“Forests have been key to our evolution as

societies and individuals,” Andrew adds. “It is vital to address the impact of human ac-tivities on forests in a transparent and par-ticipatory way. There are two important facts to keep in mind: a) tree plantations provide essential natural resources, and b) original and pristine ecosystems are under increasing pressure every year to keep up with human demand. These two pressures give rise to the question: is it possible to innovate forestry models so that commodities keep flowing, the rights of local communities regarding access and benefit sharing are respected and activi-ties to protect and restore natural forests are sustained?”

During 2011, the International Year of For-ests, WWF’s Living Forests Report is ex-amining the drivers of deforestation and opportunities to shift to new models of sus-tainable forestry, farming and consumption. The report aims to catalyze debate on the fu-ture role and value of forests in a world where humanity lives within the Earth’s ecological

UPM sUPPOrTs THe neW GeneraTiOn PLanTaTiOn PrOjeCTThe New Generation Plantation Project (NGPP) is a platform of partners, including the World Wildlife Federation (WWF) and companies and governments from around the world, that have united to examine the social, environmental, economic and cultural role of plantations and to create best practices for their planning and management.

/ 3. 2011 / UPM FLASH 8

7 | New Generation Plantations Bioenergy and Carbon Report 2011

3.0 The NGP concept

ECOSYSTEM IN

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National and international legislation•

Forest management certification•

Forest carbon certification•

Environmental impact assessment•

Best management practices• 4

National and international legislation•

Forest management certification•

Environmental impact assessment•

HCV Resource Network toolkits•

Best management practices• 3

International labour standards•

Labour and trade certification•

Economic impact assessment•

Forest management certification•

National and international legislation•

Forest management certification •

Social impact assessment •

Best management practices• 2

LOCAL COMMUNITIES

SOCIETAL AGENTS

WATERCYCLE

NUTRIENT CYCLE

BIOLOGICAL CYCLE

CARBON CYCLE

JOB CREATION

ECONOMIC GROWTH

VALUE CREATION

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TOOLS

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VALUES

Cover 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Glossary Endnotes Credits

Case study A Case study B Case study C Case study D Case study E Case study F Case study G Case study H Case study I

fEATURE STORY

limits and shares its resources equitably. Zero Net Deforestation and Forest Degradation (ZNDD) by 2020 is a critical milestone mov-ing toward this goal.

Around 2050, the global population is pro-jected to both pass 9 billion and to have a higher average income. Major changes will be needed for the Earth to sustain this many people. These changes include new consump-tion patterns that meet the needs of the poor while eliminating waste and over-consump-tion of the affluent.

Achieving and maintaining near-zero forest loss will also require forestry and farming practices that produce more resources with less land, water and pollution. This suggests an increasing reliance on high-yield planta-tions for timber, fiber, and biomass for en-ergy. The Living Forests Report indicates that plantations will need to be expanded at a rate of four to six million hectares per year between now and 2050.

China, though, still lags behind in plantation

management. Manual labour is still heav-ily used and many plantations are not well mechanized.

“We have long and rich experience with for-ests and plantation management,” Andrew says. “UPM owns in Uruguay (250,000 hectares) and in the UK (8,000 hectares) of plantations, and a million hectares of for-ests in Finland, all of which are certified to the two international sustainably schemes, FSC (Forest Stewardship Council) and PEFC (Programme for the Endorsement of Forest Certification Schemes).”

UPM believes that experiences in plantation development in China and other developing countries will be of great help.

“In Brazil, in particular, the technological developments in terms of tree breeding and establishment techniques have increased sus-tainable productivity considerably. It is essen-tial in a time of increasing resource pressure that these techniques are shared,” Andrew emphasizes.

The nGP concept

UPM FLASH / 3. 2011 / 9

fEATURE STORY

UPM POinTs WaY fOr THe PrinTinG PaPer BUsiness

Text: Tuovi Similä Photos: Viljak, Jari Leino

Ovaska regards Myllykoski as a suitable partner for UPM in every respect. The products are similar but with a slight-

ly different focus, and so they complement UPM’s product palette perfectly. Excellent, too, is the fact that most of the Myllykoski

mills are located in Cen-

tral Europe and North America, in the middle of the markets, which strengthens UPM’s customer service and supply security. “One of the trends is growth in the proportion of paper consumption in end-uses where lead times for paper deliveries are short. Now we can more easily participate in this part of the paper business,” he says.

The most important aspect of the merger in Ovaska’s view, however, is its compat-

ibility with UPM. “For some time already we have said that we

want to be an active player in restructuring this industry and make only those moves that will bring added value to our shareholders.” He specifies that he means, among other things, a reasonable transaction price, and a synergistic deal which will take the company forward. “There is optimism and expecta-tions are high.”

restructuring and growth in emerging markets part of the future

Combining forces with Myllykoski is a sig-nificant and major step in putting the Paper business area’s strategy into practice.

The strategy also includes expansion in the emerging markets, where there is potential for growth in paper products. “Yes, Asia and especially China rank very high in our delib-erations, and opportunities for growth there

A follow-up to the restructuring in the forest industry eagerly awaited by the markets was achieved when UPM announced the completion of its acquisition of Myllykoski and Rhein Papierd on On August 1, 2011. “I’m confident that this transaction will send a strong signal that UPM believes in the paper business and that we have a genuine desire to develop paper in an important role in the company,” says Jyrki Ovaska, President of UPM’s Paper Business Group.

/ 3. 2011 / UPM FLASH 10

UPM millsMyllykoski mills

Madison

North America

fEATURE STORY

have been explored exhaustively. Likewise, we have scrutinised India and other emerg-ing markets both as potential markets and as manufacturing locations,” Ovaska says.

Led by China, the rate of growth in Asia is a huge 6–8% per year. China provides UPM’s paper business too with an opportunity for organic growth, unlike the mature European and North American paper markets. It is cer-tainly no disadvantage that UPM is already strongly established in China. In Changshu, UPM has a modern fine paper mill, UPM Raflatac’s self-adhesive labelstock factory and an R&D Centre. In Guangzhou, the com-pany also has an RFID tag and inlay manu-facturing unit.

“The pace of moving forward is determined by two things. We must be sure that market development and our own projects are such that going forward is worth our while. An-other determining factor is the company’s resources – the strength of future cash flow and how we prioritise strategic growth pro-jects,” Ovaska says.

Being a frontrunner means constant renewal

Being a frontrunner is the cornerstone of UPM as a whole and also of the Paper busi-ness area. In Ovaska’s view cost-efficiency is part of being a frontrunner. For the paper

business this is vital, and it is also UPM’s great strength.

“Cost-efficiency entails continuous improve-ment and streamlining of operations as well as innovativeness in adopting new ways of operating,” Ovaska says. He commends UPM personnel for taking seriously the internal development challenge which cost-efficiency has brought. The organisation is generating new ideas, even radical ones, spontaneously. “A good aspect of a bad time has been the fact that people have come to understand that things have to be done differently. We have sought and been able to create a flexibility which was previously lacking, and this too is an important part of being a frontrunner.”

We want to be perceived by our customers as their most important and natural partner, with whom it is easy to do business. “It requires, of course, that we have highly competitive products and services. Our strength is that customers get a complete product palette of

graphic papers.”

Ovaska points out that ways of operating must be continuously improved. “This is what our competitors also do. But we must ensure that we are at the forefront all the time.”

Operating in accordance with sustainable de-velopment is naturally part of being a front-runner too. “Sustainability is a constantly rising, global theme. UPM has invested a great deal in carbon-neutral energy produc-tion and the use of recycled paper. In my view this constitutes a frontrunner role, not only within the print value chain but also in relation to other industries.”

Ovaska also includes reliability among the elements of being a frontrunner. “It means that UPM is a reliable partner on which cus-tomers can build their future. Paper is a core business for UPM, and we aim to be a front-runner in the paper business in the future too,” Ovaska says.

Jyrki Ovaska, President of UPM’s Paper Business Group.

UPM FLASH / 3. 2011 / 11

CUSTOmER STORY

THe COPY PaPer DeManD in THe infOrMaTiOn aGe

The growing calls for offices to go pa-perless should be cause for concern with paper manufacturers and office suppliers. Trends, however, have re-

vealed some surprises.

“Contrary to expectations, the growth rate for copy paper demand has been large and increasing in recent years,” says Mr. Derek Hu, Office Depot Global Vice President and China President.

Established in the United States in 1986, Of-fice Depot is one of the biggest supplier of office products and services in the world with global sales revenue reaching USD11.6 bil-lion in 2011. Office Depot entered the Chi-

nese market in 2006. In contrast to selling through bricks-and-mortar stores as Office Depot most commonly does in North Amer-ica, Office Depot China has adopted online sales methods (www.officedepot.com) along-side direct sales and direct mailing. After just a few years, Office Depot has become the biggest office and service supplier in the Chi-nese market and has widened its gap with its competitors.

“For the last few years we’ve maintained double-digit growth in the Chinese market,” notes Derek, “This is mainly because of the strong demand in the Chinese economy. Even so, our company still has much more room for growth.”

Even though the value of the office supply market in China is approaching billions of US dollars, Office Depot, the industry leader, does not have more than 10% market share. It is evident that the office supply market in China is still highly fragmented and moves towards integration will only intensify in the coming years.

a steady and supportive partner

Office Depot began to work with UPM in 2007. Speaking of the first impression of UPM as a supplier, Derek characterized the paper manufacturer as “consistent” and “rea-sonable.”

“When it comes to product quality, service,

Text: Ada Qin Photos: UPM

Despite the growing push to promote the paperless office, demand for copy paper in the Chinese market has grown and not decreased. Office Depot, the multi-national office supply chain and UPM partner, is increasingly optimistic about future paper sales.

/ 3. 2011 / UPM FLASH 12

CUSTOmER STORY

and price, UPM is very consistent; there are no surprises. Maintaining this level of con-sistency is not very easy to do. It is also in-evitable when two parties cooperate that they will not always see eye-to-eye, but whenever we’ve had to discuss anything with UPM, we’ve always reached a rational solution which is in the best interest of both parties.”

During the 2008 Beijing Olympic Games, Office Depot confronted extraordinary prod-uct demands.

“During the Olympics we faced the threat of severe supply shortages in Beijing, and UPM responded by giving us great support, not only ensuring a steady product supply, but also helping us solve logistical and delivery problems. UPM went beyond the call of duty and what really impressed me is that they did it without any quibbling,” says Derek.

information become the growth booster of copy paper

Although, the ‘paperless office’ has been

popular for over ten years, the demand for paper does not look like abating.

“We don’t think the paperless office will re-duce the absolute quantity of paper used, be-cause the paperless office brings with it the technology to easily acquire information; in an era where demand for information is explod-ing, people’s demand for printed information will also be much stronger,” says Derek.

Another driver of paper demand in our age of digital information is official documenta-tion. For example, in China the paperwork required by the tax authorities, although eas-ily available in electronic version, needs to have the real signature on it, thus necessitat-ing more printing.

Partners in environmental protection

As a member of World Wildlife Fund (WWF), Office Depot is committed to environmental protection. Its environmental protection mot-to is “Buy Green, Be Green, Sell Green.” It is this policy that requires Office Depot to be

very careful in its choice of suppliers.

“We will not cooperate with suppliers that do not do their utmost to protect the environ-ment,” says Derek.

He revealed that copy paper cooperated by Office Depot and UPM has received FSC environmental protection certification and this is fully recognized by customers.

“We weren’t sure how successful this co-operation was going to be, but in the end the worries were unfounded as customers reacted positively and enthusiastically to the certification,” says Derek, “On the industry side, the electronic and financial industries were particularly enthusiastic about the en-vironmental certified paper. Japanese-funded enterprises were among the foreign invested enterprises that had the highest demand for the paper with environmental certification. Local Chinese enterprises are still in the early stages of cultivating an acceptance of such certifications.”

We don’t think the paperless office will reduce the absolute quantity of paper used,

because the paperless office brings with it the technology to easily acquire information;

in an era where demand for information is exploding, people’s demand for printed

information will also be much stronger.

Mr. Derek Hu, Office Depot Global Vice President and China President

UPM FLASH / 3. 2011 / 13

Taiwan is a fertile market for UPM as the paper manu-facturer is positioned to thrive after already earning the trust of the business community.

“Of the three best-known magazines in Taiwan, two of them will definitely be printed on UPM paper,” says Joseph Wong, General Manager of PrintMax Paper. “In the media and publication field, UPM has become a well-known and respected brand.”

In the magazine paper market, UPM dominates the familiar brands: Business Week, Common Wealth, Global Views, Marie Claire, National Geographic, and many others.

Ten years ago, DaYeh, the paper distribution company es-tablished by Joseph’s father in the 1970s, became the largest paper distributor in Taiwan. They mainly sold paper produced locally in Taiwan including printing paper, office paper, and packaging paper.

“At that time, my father predicted that in the future imported paper would occupy an important place in Taiwan, so he planned to expand our imported paper business,” says Joseph.

Joseph had completed his studies in Canada and was working on information technology projects for Canada HSBC Bank when his father called for him to return to Taiwan to open up the import paper business.

Upon his return to Taiwan, UPM was the first imported paper brand he contacted.

“At that time, UPM had not yet entered into the Taiwan market. They chose us to be their exclusive printing paper distributor in the Taiwan market and I think this was related to the fact that our marketing channels comprehensively covered the Taiwan market,” explains Joseph.

UPM fOOTHOLD in TaiWan seCUreD BY TrUsT

A decade of cooperation between PrintMax Paper Co., Ltd. and UPM has served the UPM brand well in the Taiwanese printing paper market. During an era of reduced printing paper demands, where are the new paper marketing opportunities to be found?

Text: Ada Qin Photos: UPM

/ 3. 2011 / UPM FLASH 14

CUSTOmER STORY

International companies seeking to enter the Taiwan market sign a cooperative agreement with a trader, and the trader leverages its connections with local distributors to jointly develop the market. The cooperative rela-tionship between the trader and distributors is normally weak.

“To earn the trust of local customers buying imported printing paper, geographical and psy-chological barriers must be overcome – fore-most in their minds is whether the goods can be delivered on time, all the time,” says Joseph.

DaYeh had cultivated a strong network in the paper distribution field, and had an estab-lished means of distribution. Using this base of operations, Joseph’s family established PrintMax Paper, which took responsibility for marketing and pre-sale and after-sale ser-vices for UPM.

“This complete supply chain model laid a good foundation for UPM which helped to accelerate their development in the Taiwan market,” Joseph adds.

Partner provides UPM with key for growth

It was not an easy thing to let the publish-ers and media of Taiwan use UPM paper produced as far away as Europe. After some study, Joseph found a key to open the Tai-wanese market.

“In the past, most of Taiwan’s magazines used

paper with a higher gram weight, and even though such paper looked thicker and heavier, the cost was disproportionately higher,” Jo-seph further reveals. Following the trend set by international magazines, PrintMax Paper recommended UPM product to publishers and media outlets; not only was this paper lighter, but it also maintained a respectable thickness and excellent quality.

“UPM pushed paper thickness to a whole new level in the market.” says Joseph.

This selling point attracted the attention of the market. Although the unit price of UPM paper was higher, comparing to the same ba-sis weight of the local manufacturers, the price was still lower than the heavier paper the customers used at that time. That’s why the customers were much better off overall.

The other benefit to printing customers in Taiwan was the UPM technical sales team.

“The local paper mills in Taiwan had never heard of technical sales. The UPM team an-swered many questions about the paper prod-ucts, and the team members regularly came to the printing house to advise on the best printing methods for UPM paper. This was enthusiastically received in Taiwan’s printing industry. They never thought that the techni-cians in a paper-making company could have so much professional printing knowledge,” says Joseph.

Impressed by the support received, the pub-lishers and magazines of Taiwan were drawn to the UPM brand. A few years later, UPM had achieved a considerable share of the printing paper market in Taiwan.

Opportunities opening as the market changes

After ten years of working together, Joseph’s company has a very close partnership with UPM. Joseph not only introduces Taiwanese customers to UPM, but his company also

regularly provides analysis on the Taiwan paper industry market to UPM.

“A clear trend has become apparent in the Taiwan paper market. Sales and consumption of printing paper is on the decline, while the sales and market share of copy paper, packag-ing paper and cardboard paper is increasing,” Joseph states.

Joseph said the main cause for the reduction in printing paper is the reduction in Taiwan’s population, less and less people in Taiwan read books. Finally, many Taiwanese indus-tries have moved abroad and this has reduced the amount of product manuals and promo-tional materials required.

“Copy paper consumption has increased as a result of the information explosion. Equip-ment manufacturers have increased their output of printing devices, which has also stimulated the rapid growth of the copy paper market. The increase of packaging paper is related with the change of public perception on paper. In the past, the Taiwanese thought that papermaking required tree cutting. Now, they are aware that paper production is a re-cyclable and sustainable process,” Joseph analyses.

At the same time, a government reduction in the use of plastic products for goods packag-ing has led to greater use of paper packaging.

In his view, the relationship with UPM goes beyond the products.

“Because we have a very close, mutually ben-eficial partnership, if there is any particular demand for a UPM product in Taiwan, we know we can provide the marketing power and channels to match.”

DaYeh is currently seeking to be public-ly listed. If successful, it will be the first independently-listed paper merchant in Taiwan.

Joseph Wong, General Manager of PrintMax Paper

UPM FLASH / 3. 2011 / 15

PRODUCT AND SERVICE

UPM Preprint Papers - for personalised communications

UPM Fine Preprint comes in a wide range of weights: 60g/m2, 70g/m2, 80g/m2. It provides excellent printing performance and is suitable for most printed text and print demands.

UPM Fine Premium Preprint comes in two grades: classic and high whiteness, and two weights: 70g/m2 and 80g/m2. This product is suited to high speed laser printing jobs, and stands out because of its excellent thickness and stiffness.

Both UPM Fine Preprint and UPM Fine Premium Preprint are available for FSC and PEFC certified products.

In July UPM Changshu Mill launched new preprint paper products: UPM Fine Preprint and UPM Fine Premium Preprint.

UPM Fine preprint is ideal to print documents like invoices, bank account and insurance statements, or correspondence, advertising leaflets or any kind of direct mail you can be sure that UPM has the right quality paper for you. UPM Preprint range covers papers for all main preprint end uses.

/ 3. 2011 / UPM FLASH 16

CORPORATE RESPONSIBILITY

The UPM Changshu Mill shared the importance of protecting the environ-ment on July 18 with 110 Changshu area elementary school students.

UPM co-sponsored “Care for a Green Fu-ture Student Environmental Protection Sum-mer Camp” with Changshu Environmental Protection Bureau and Changshu Municipal Education Bureau.

In the morning, students from eleven Chang-shu elementary schools arrived at the UPM Changshu Mill activity center. Production Director Xiao Yunfeng of the Changshu Mill gave a welcoming speech at the open-ing ceremony of the summer camp. Leaders

from the Changshu Municipal Environmental Protection Bureau and Education Bureau also attended the opening ceremony and spoke to the students.

During the ice breaking activity at the begin-ning of the event, the children brought crafts that they made to exchange with their new friends from other schools. These unique and practical handicrafts were all made from re-cycled materials.

The campers then participated in an “Envi-ronmental Protection Fashion Show.” The children were divided into 10 groups. With a 30 minute time limit, each made two or more outfits using waste newspapers, rags

and plastic bags. The outfits were a hit with the judges who praised them for their ingenu-ity and innovation.

The whole day was rounded off by a visit to converting house and Jetty with UPM envi-ronmental volunteers followed by the “Green Shots” photo competition.

In their groups the children explored the best shooting angle to produce their photo-graphic take on a green life. Some groups struck pose of Thousand-hand Bodhisattva and some groups were running passionately to the camera with smiling faces seeming like flowers in blossom in the sun.

UPM TeaCHes enVirOnMenTaL VirTUes TO sUMMer CaMPers

Text / Photos: UPM

UPM FLASH / 3. 2011 / 17

CORPORATE RESPONSIBILITY

frOM fOresT TO PaPer, THe sTOrY Of OUr WaTer fOOTPrinTWhile much of the buzz in recent years has been about the “Carbon Footprint”, UPM has looked ahead to what will be an equally important environmental topic in the future: the “Water Footprint.” UPM is one of the first global corporations to calculate the water footprint of paper. The term ‘carbon footprint’ has already found its way into the public consciousness and water footprint may soon follow. The World Business Council for Sustainable Development (WBCSD) believes that in time, governments will require major corporations to calculate the size of their water footprint.

Text: Ada Qin Photos: UPM

/ 3. 2011 / UPM FLASH 18

CORPORATE RESPONSIBILITY

The water footprint concept was in 2002 introduced by Dutch scholar Professor Arjen Y. Hoekstra in 2002, soon after the Water Footprint Network was established (www.waterfootprint.org). The mission of the WFN is to pro-

mote the transition towards sustainable, fair and efficient use of fresh water resources worldwide. A water footprint refers to the total amount of fresh water used in the supply chain and direct operations of paper production. In a water footprint research, water is divided into three categories: green, blue and grey wa-ter footprint.

For paper making, green water footprint represents the forests natural water cycle, this is in fact the moisture that trees evaporate. The blue water footprint refers to the water used in the production processes and grey water footprint is the volume of freshwater needed to assimilate effluent in receiving freshwater bodies.

According to the WFN, the water footprint of an apple is around 70 liters, for a kilogram of rice its 500 liters, a kilogram of cotton takes 10,000 liters, while a kilogram of beef comes in at a mas-sive 15,400 liters. The annual water footprint for each Chinese person is 700 cubic meters, while U.S. citizens have the high-est individual consumption rate in the world, averaging 2,500 cubic meters.

UPM’s research on the water footprint

At the world water week in Stockholm (August 2011) UPM launched its water footprint report. It is the first study of its kind for the paper industry. Both UPM’s Nordland Mill in Germany and the UPM Changshu Mill in China took part in the measure-ment and evaluation of the water footprint method. “By working with the Water Footprint Network, UPM has taken a leading role in moving towards sustainable water use in the paper industry. By calculating the water footprint for paper products, their pilot study shows that when trees are grown in sustainable managed forests, paper products will have little contribution to the grow-

ing concerns of water scarcity. The Water Footprint Network applauds this effort and congratulates UPM on taking these first steps toward sustainable water use in all of their mill locations, operational management and forestry practices. ” explains Ruth Mathews, Executive Director, from Water Footprint Network.

“According to UPM’s pilot study, 60% of the UPM’s Nordland mill’s water footprint is green water, 1% is blue water and 39% grey water. Around 99% of the water footprint comes from the supply chain and the remaining 1% from the actual paper mill production processes,” explains Sami Lundgren, Director, En-vironmental Services, UPM. “In other words, if you think about the water needed in producing one sheet of A4, according to the current calculation method most of the water is used in the for-est as part of the natural water cycle,” he continues. The current methodology for paper is however not yet at the stage in which the full potential of water footprint is utilized. UPM and the Wa-ter Footprint Network will maintain a close cooperation on the research of this subject throughout 2011.

UPM sustainable water use

Fresh water is the most important resource in the production pro-cess of paper. Water also has an important role in UPM’s forest management, power generation and pulp production. UPM mills are therefore located in regions that are water abundant and have a good quantity and quality of freshwater available.

“Water is a key environmental principles in UPM, our goal is to have the best water footprint in our industry by reducing effluent quantity and improving effluent quality”, says Mary Ma. Over the past 15 years, UPM’s water consumption in the papermaking process has been reduced by half. Currently the UPM Changshu mill’s water consumption is five to six tons of water for each ton of paper produced, while the national industry standard is 30 tons of water. When it comes to responsible water use, the UPM Changshu mill is leading the paper industry.

UPM FLASH / 3. 2011 / 19

TEChNOLOgY fRONTLINE

UnraVeLinG THe MeTaMerisM MYsTerY Text: Liu Xin Photos: MOLI

/ 3. 2011 / UPM FLASH 20

TEChNOLOgY fRONTLINE

One manifestation of metamer-ism occurs when two surfaces, each produced with different colorants as judged by their

distinct spectral reflectance factors integrate to the same color perception under a given lighting condition and to a different color per-ception under other illuminants with respect to the human visual system.

The causes of metamerism

The best color-match is to reproduce the best spectral match whose color-match remains constant under most illuminants within a visual tolerance. In reality, this is extremely difficult because the paper ma-terials, the illuminants and other conditions are not the same.

Grassmann’s Law tells us that light that shares the same color appearance, has the same effect on color mixtures whether they possess the same spectral composition or not. That is to say, colors which look the same visually are equivalent in effect. The significance is that colors which look the same visually can replace each other, regard-less of their spectral composition. Hence, color reproduction can be realized in prac-tice by visual confirmation.

The significance of metamerism

Metamerism is of great significance in theory and practice for color reproduction technol-ogy. It can be said that current four color printing technology would not have come out without the existence of metamerism, because in everyday production, the colorants used on the reproduction cannot be exactly the same as those of the original. But in fact with dif-ferent spectral reflectivity curves, the color-

match can be realized due to metamerism.

For example, to duplicate an original object that has a wide variety of colorants, print-ers only use four colorants (cyan, magenta, yellow and black) for reproduction. Another example, the three primal inks (cyan, magenta and yellow) can overprint to produce neutral gray. The alternative is to use the black ink to obtain the same visual effect.

The danger of metamerism

Although metameric reproduction by CMYK color reproduction of conventional printing technology accomplishes pleasing results, the color mismatch under illumi-nants other than that standardized by the printing industry is always problematic for critical color-matching applications such as catalog sales, art-work reproduction, and computer aided design.

Nowadays, the demanded quality of color reproduction is skyrocketing. Consumers are more willing to invest extra capital in pursuing high fidelity color reproduction for its appealing results with respect to print-ing technology Solving the metamerism problem.

solving the metamerism problem

In order to alleviated the problem of meta-merismt. The direct way is adopting more inks for increasing degrees of freedom and enlarging the color gamut. The current mul-tiple-ink printing systems, such as Pantone Hexachrome, Küppers 7-Color, and DuPont Hyper Color, employ six or more inks for high fidelity color reproduction, but their color separation algorithms are still based on trichromatic color reproduction. So the

increased degrees of freedom are used for expanding device color gamut. The problem of metamerism is not alleviated by these systems.

In order to reduce the degree of metamer-ism, a spectral approach which is proposed by Munsell Color Science Laboratory, as opposed to a trichromatic approach, is the answer for critical color matching applica-tions. The goal of spectral reproduction is to reproduce the best spectral match whose color-match remains constant under most illuminants within a visual tolerance. This ensures that the colors of merchandise repro-duced in a catalog, or the colors of an origi-nal painting reproduced in an art book, will unambiguously be rendered under various illuminating and viewingconditions.

The spectral-based color reproduction system included multi-spectral acquisition systems and spectral-based printing algorithms. So as to enhance the spectrum duplication accu-racy, the current research effort is devoted for the development of the spectral output sys-tem which is comprised of an ink8selection module, and the implementation of spectral-based printing algorithms for amultiple-ink printing device. At present, this method is being tested and there are high hopes that it will bring about a revolution in the printing technology field.

As color reproduction technologies develop, customers are willing to invest more in pur-suit of higher fidelity color duplicates, but metamerism has become a major bottleneck. It is therefore even more critical than before that those in the industry know how to tackle the problem.

For those outside the printing industry, it can seem puzzling why four color printing technology can reproduce so many different colors on printed material. The answer can be found by understanding an optical phenomenon called “metamerism”.

UPM FLASH / 3. 2011 / 21

Company and Personal Information

The information will remain confidential and will not be associated with your answers to any question in any way.

1. Please write down your personal contact information

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2. What’s your company type? Merchant (Graphic paper) Merchant/Retailer (Cutsize paper) Printer/Publisher Media /Association Others (please specify)

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Reader Behavior

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a. Website b. Television c. Newspaper d. Magazine e. Broadcasting f. Others (please specify)

6. How do you sort the above media channels? (for example, a/b/c)

UPM Flash REadERshiP sURvEY Dear readers,

Thank you for your continued support of UPM Flash, the UPM customer magazine in Asia Pacific region.

We are always striving to improve our magazine and to this end we wish to invite you to participate in our 2011 survey, which aims to learn more about your readership habits and enhance our magazine content and quality.

All participants will have the chance to win the Apple iPod nano!Winners will be confirmed via email and will receive their award by postal mail.

To submit your feedback online, please visit https://www.surveymonkey.com/s/Flash_readership_surveyOr fax your answer to +86 21 6448 5512 Or email: upm.flash@upm.com

/ 3. 2011 / UPM FLASH 22

7. Which websites do you visit most often? Please list top 3.

8. What type of magazines did you read in the past 1 year? Printing industry Business management Fashion magazine Office supplies Others (please specify)

9. How much time in total do you usually spend reading each Flash?

Less than 15 minutes 15-30 minutes 30-60 minutes More than 60 minutes

10. What sections do you normally read? UPM news Corporate responsibility Customer Story Product & service Technology frontline Market information

11. Would you like to read a bilingual version of Flash? Yes, it’s convenient No, just keep it as is

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13. What format do you prefer for digital version of Flash? PDF Download link Mobile browser Others (please specify)

14. Do you read other corporate industrial publications? If so, which ones?

According to your reading experience, please judge the following content (1 means the lowest score, 5 means the highest score):

15. General assessment

How would you judge the column setting? 1 2 3 4 5

How would you judge the written expression? 1 2 3 4 5

How would you judge the layout design 1 2 3 4 5

How would you judge the UPM advertisement? 1 2 3 4 5

16. Content assessment

A key way to effectively communicate the UPM biofore strategy and news

1 2 3 4 5

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1 2 3 4 5

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UPM FLASH / 3. 2011 / 23