Metsä Fibre Annual Review 2014

Metsä fibreAnnuAl review 2014

2 Key figures4 CEO’s review6 Strategy8 2014 in brief10 Bioproduct mill

12 Botnia products and services14 Sustainability16 Materiality analysis18 Management of

environmental impacts

Contents

The world consumption of softwood pulp is growing steadily by 2 million tonnes by 2025. Growth is fastest in Asia.

Metsä Fibre is planning to build a bioproduct mill in Äänekoski, Finland. its annual pulp production capacity would be 1.3 million tonnes.

PUBLISHERMetsä Fibre [email protected]

The annual review is published in English, Finnish and Chinese. It is available in PDF format at www.metsafibre.com.

The pattern on the cover follows the structure of lignin, an integral part of the wood cell walls. The use of lignin to produce new bioproducts is currently being examined.

20 Environmental balance21 Environmental

performance of northern pulp mills

2 million tonnes

1.3 million tonnes

Metsä Group Annual review 2014

Sustainability report 2014

MEtSä FIBRE is a world-leading producer of softwood pulp and its main brand is Botnia. Our products – sustainably and cost-efficiently produced softwood and birch pulp – are developed for the production of high-quality tissue and printing papers, specialty products and board. Our sales in 2014 amounted to approximately eur 1.3 billion, and we employ a total of about 850 people. Metsä Fibre is part of Metsä Group. it is owned by Metsäliitto Cooperative (50.2%), Metsä Board (24.9%) and itochu Corporation (24.9%).

1

key figures

Metsä Fibre is a pulp industry company operating in the international market. Our four production units in Finland are at the top of the industry, and their efficiency and environmental performance are continuously being developed. Europe and Asia are our main markets.

KEY FIGURES 2014 2013 2012 2011 2010

Sales, eur million 1,296 1,314 1,274 1,301 1,365

Operating result, eur million 228 197 151 267 382

Operating result, excl. non-recurring items, eur million 208 197 148 267 379

return on capital employed, % 30 29 23 37 52

equity ratio, % 66 71 65 63 68

net gearing ratio, % -40 12 16 7 -1

investments, eur million 26 27 35 45 14

Personnel, 31 December 842 884 876 873 881

wood consumption, million m3 12 13 12 12 12

Share of certified wood, % 87 85 85 84 85

electricity self-sufficiency rate, % 149 144 151 138 151

lost-time accident frequency, per million worked hours, incl. all accidents at work leading to absenteeism 4.9 8.4 7.9 6.6 14

PRODUCtION 2013 2012 2011 2010 CapacityiSO

9001iSO

14001iSO

50001OHSAS 18001

iSO 22000

PeFC COC

FSC COC/Cw2014

Pulp mills, 1,000 tonnes

Joutseno 594 604 606 603 595 690 x x x x x x x

Kemi 552 564 539 532 534 590 x x x x x x x

rauma 607 612 573 567 544 650 x x x x x x x

Äänekoski 504 516 519 503 502 530 x x x x x x x

Total 2,257 2,297 2,237 2,205 2,173 2,460

Capacity utilisation, % 92 95 93 93 93

Metsä Svir

Sawn goods, 1,000 m3 233 244 221 193 208 250 x x 1) x x x

1) Metsä Svir iSO 14001 certificate includes the energy efficiency system (eeS).

SaLESBy MArKeT AreA %

FInlanD 53 REsT OF EuROPE 21 asIa 24 REsT OF WORlD 2

PULP END USE%

BOaRD 32 PRInTIng PaPERs 32 TIssuE PaPERs 21 sPECIalTy PRODuCTs 15

2 KEY FIGURES

SAleS EUR 1.0 BILLION

PerSOnnel 2,800

OwnerSHiP OF MeTSÄliiTTO COOPerATive 91%

tISSUE aND COOKING PaPERS

MEtSä tISSUE


PerSOnnel 850

OwnerSHiP OF MeTSÄliiTTO COOPerATive 50.2%, MeTSÄ BOArD 24.9%, iTOCHu COrPOrATiOn 24.9%

PULP

MEtSä FIBRE


PerSOnnel 2,300


WOOD PRODUCtS

MEtSä WOOD


PerSOnnel 900


WOOD SUPPLY aND FORESt SERVICES

MEtSä FORESt

Metsä group


PerSOnnel 3,100

OwnerSHiP OF MeTSÄliiTTO COOPerATive 42.53% (HOlDinG OF vOTeS 62.15%)

PaPERBOaRD

MEtSä BOaRD

Metsäliitto CooperAtiVe OwneD By 122,000 FinniSH FOreST OwnerSGrOuP’S PArenT COMPAny

5.0 eur BilliOnSAleS 10,500PerSOnnel

PrOductiOn

SAlES

MAin MArkEtS

2.3PRODuCTIOn

MIllIOn TOnnEs

25%OF OuR PulP Is sOlD TO asIa

850PERsOnnEl

aPPROx.

3.1salEs

MIllIOnTOnnEs

InCl. OuR PRInCIPals’ PulP

KEY FIGURES 3

The pulp market experienced steady growth in 2014. Despite the weak economic development in Europe and the slowdown in economic growth in China, global demand for pulp continued to grow as pre-dicted. Considerable volumes of new eucalyptus pulp capacity entered the market, which addressed the demand for short-fibre pulp, in particular. As no new capacity entered the market of Metsä Fibre’s main product, northern softwood pulp, the balance between demand and supply remained tight.

preferreD supplier for HigH-QuAlity bioproDuCts AnD serViCes

ilkka HämäläCEO, Metsä Fibre Oy

4 CEO’S REvIEw

The difference in the prices of softwood and hardwood pulp reached a record level in 2014; at best, it was more than USD 200 in the European market in the autumn. Towards the end of the year, the price of short-fibre pulp increased, resulting in a slightly smaller difference, although it still remained at nearly USD 200. In the second half of the year, the euro weakened by more than 10 per cent against the U.S. dollar. This contributed to improved price competitiveness and the profitability of pulp producers operating in the euro area. The price development of softwood pulp in Europe and the favourable develop-ment of exchange rates contributed to Metsä Fibre’s reasonably good development in 2014.

EFFICIENt aND CUStOMER-ORIENtEDMetsä Fibre’s vision is to be the most efficient and the preferred supplier for high-quality bioprod-ucts and services creating added value to its cus tomers’ businesses. A key factor in effi-ciency is the continuous improvement of our mills’ performance in terms of production volumes and quality as well as environment and energy.

In 2014, the focus of our development investments was on the Joutseno mill. The renewal of recovery boiler constructions improved the energy efficiency and reduced combustion gas emissions of the mill. We also modernised the chip silo of the digester and its odorous gas treatment system. The investment improved the product quality and runnability of the mill, and also considerably reduced the odorous gas emissions of the mill.

We continuously develop our services and customer knowledge. In 2014, we improved the efficiency of our logistics chain through RFID

technology as well as the innovation and development work with our customers. We also opened a new online pulp sales service.

tHE NExt-GENERatION BIOPRODUCt MILLIn April 2014, we announced our plan to build a new bioproduct mill in Äänekoski. The planned next-generation mill will be in a class of its own in terms of energy-efficiency and environmental performance. A unique network of companies producing different bioproducts would gradually be built around pulp production. The project supports Metsä Fibre’s objectives to be a leading company in the softwood pulp market and to provide the raw material needed by our customers on a

long-term basis. Once completed, the mill would be unique among mills producing market softwood pulp in terms

of efficiency. The upgrading level of the mill’s side streams would also increase, which would

support the competitiveness of the entire operation and increase supply in the growing market for wood-based bioproducts. If the prerequisites for the investment are met, the decision regarding the construction of the bioproduct mill will be made in spring 2015.

COMPEtItIVE FORESt INDUStRYThe development of Metsä Fibre’s business is

based on the global increase in the demand for sustainably produced pulp fibre as well as other

wood-based bioproducts and bioenergy. We have reason to believe that Finnish forest industry, when

developed sustainably, has the prerequisites to remain competitive in our main markets. Finnish family-owned forestry is the strong foundation of our operations. It applies the principles of sustainable development to produce wood raw material to be upgraded into high-quality products for our customers, today and in the future.

wHen DeVelopeD sustAinAbly, finnisH forest inDustry HAs tHe prereQuisites to

reMAin CoMpetitiVe in our MAin MArkets.

CEO’S REvIEw 5

strAtegy

Our vision is to be our customers’ preferred supplier for high-quality bioproducts and services that create added value to their business. Our operations are guided by strong values – reliability, cooperation, renewal and responsible profitability.

FOC

US

aR

EaS

OF

tHE

StRat

EGIC taRGEtS: OWnER · CusTOMER · InTERnal EFFICIEnCy anD

CO

MP

ETEnC

E

MEG

atR

END

S: T

EChnOlO

gy · glOBalIsaTIOn · POPulaTIOn gROWTh anD COnsuMPTIOn · EnvIROn

MEn

T anD

ClIM

aTE

VaLUES:

MEtSä FIBRE

RElIaBIlITy

REnEWal

COOPERaTIOn

REsPOnsIBlE PROFITaBIlITy

PROMISE tO OUR CUStOMERS:

FIBREs OF suCCEss

VISION: OuR CusTOMERs valuE METsä FIBRE as ThEIR PREFERRED suPPlIER FOR hIgh-qualITy

BIOPRODuCTs anD sERvICEs ThaT CREaTE aDDED valuE TO ThEIR BusInEss

MISSION: TO BE ThE MOsT PROFEssIOnal anD EFFICIEnT COMPany

In ThE PulP InDusTRy

CUStOMER

6 StRatEGY

tHe eleMents of strAtegy upCoMing MeAsures

owner

WE CREatE aDDED VaLUE tO OUR OWNERS

CustoMer

WE aRE tHE MOSt RELIaBLE PaRtNER

internAl effiCienCy

WE MaKE PROFIt RESPONSIBLY aLSO IN tHE FUtURE

CoMpetenCe

WE CONtINUOUSLY CHaLLENGE OURSELVES

• We announced our plan to build a bioproduct mill in äänekoski.

• We released working capital by means of financing arrangements of sales receivables and accounts payable.

• We increased synergies within Metsä group by improving our shared operations.

• If the prerequisites for the investment are met, the investment decision regarding the bio product mill will be made in spring 2015.

• We will improve our mills’ environmental performance and cost-effectiveness through investments.

• Our delivery volumes of pulp will increase in Europe as well as in China where demand for softwood pulp is growing steadily.

• We will improve our customers’ profitability by introducing new services, such as Innovation Days and Botnia IdeaBooster.

• Our pulp grades and mills will be developed in accordance with the needs of our customer segments.

• We will implement the innovative Waste water FOx application, which provides real-time information on waste water load.

• In 2015, our goal is to increase the pulp production volume by 100,000 tonnes.

• Our goal is zero accidents.

• In the ‘Mills of the Future’ project, we will create a completely new management model for production, which will support the self-directedness and customer-oriented approach of teams.

• We will ensure sufficient resources for the planning and construction of the bioproduct mill.

• We will recruit new production professionals through apprenticeship schemes.

• We strengthened our position as a leading supplier of market softwood pulp in the world.

• Tall oil and turpentine were added to the Botnia product family.

• We stand out from our competitors with our diverse technical services. Our newest service, the Botnia startup Kit, provides support for the commissioning of board and paper machines.

• The cost-efficiency and environmental performance of our mills improved.

• Our accident frequency was the lowest in our history: 4.9 per million worked hours.

• Personnel competence was developed by means of specialist and supervisor coaching in 2014.

• We utilised our long-term research on new bioproducts in the preparation of the bioproduct mill.

• The innovation process became our established operating model.

reCent MeAsures

StRatEGY 7

SAleS by market area %

bioproDuCts for growing MArketsMetsä Fibre is a world-leading producer of softwood pulp. the demand for our high-quality Botnia pulps is growing as a result of urbanisation and improving living standards. in the future, we will produce increasingly more bioproducts and bioenergy from renewable wood raw material.

ideas are created every year

ideas/person

EVERYONE IS INNOVatING

at Metsä Fibre

=

FInlanD 53 REsT OF EuROPE 21 asIa 24 REsT OF WORlD 2

13,700

20

2013: 197

208

OPerATinG reSulT excl. non-recurring items eur million

+5.6 %

2013: 1,314

SAleS eur million

1,296

-1.4%

842

PerSOnnel 31.12.2014

-4.8%

2013: 884

8 2014 IN BRIEF

Demand for pulp grew steadily in 2014. Metsä Fibre’s reasonably good financial performance resulted from the favourable development of exchange rates and the price of softwood pulp. Metsä Fibre’s sales totalled EUR 1,296 million, and the operating result excluding non-recurring items was EUR 208 million. Demand for pulp is expected to remain stable as no signs of rapid changes in the market are in sight.

StRONG BOtNIaOur excellent Botnia products and services make us a leading supplier of softwood pulp in the world. Product development projects with our customers, technical applications and our fibre expertise improve our customers’ prod-ucts, production, and ultimately their com-petitiveness.

Metsä Fibre is renewing its Botnia prod-uct range with both pulp developed for customer needs and new bioproducts. We are developing Joutseno mill’s Botnia Nordic+ polysulphide pulps for tissue paper manufac-turers’ needs, while the Rauma mill is focusing

on the production of Botnia Nordic Strong, suitable for printing paper.

In 2014, we complemented the Botnia product range with biochemicals. We thereby support the business of our tall oil and turpen-tine customers, with the aim of growing with them.

BEttER aLL tHE tIMENot only is our efficiency world-class, our Botnia products enable our customers to reduce the environmental footprint of their own products.

Our mills are in excellent condition due to timely investments and continuous improve-ment of operations. For example, the amount of waste water from our mills has decreased by approximately 30 per cent in a decade, and carbon dioxide emissions from pulp produc-tion have decreased by over 20 per cent in the last five years. Our most significant investment in 2014, the replacement of the wood chip silo and recovery boiler at the Joutseno mill, reduced emissions into the air and odorous gases considerably.

Future investments will focus on improv-ing the environmental performance of our mills and on the Äänekoski bioproduct mill. Once realised, the world’s most modern bioproduct mill would produce 1.3 million tonnes of pulp per year.

13,700 IDEaSMetsä Fibre’s growth is based on intensive collaboration supported by the innovation process and tools. In 2014, we recorded 13,700 ideas and improvement suggestions.

We develop products and production processes that support our existing business operations or that can be applied to current production to improve the production process, resource efficiency or our customers’ profitability. Years of determined research work has also laid a solid foundation for the Äänekoski bioproduct mill. The mill has good prerequisites to develop the industrial ecosys-tem around it, which in turn would further increase resource efficiency.

Metsä Fibre announced the plans to build a bioproduct mill in Äänekoski.

The investments in the recovery boiler and wood chip silo at the Joutseno mill considerably reduced emissions to

the air and odorous gases.

Metsä Fibre developed a system for real-time monitoring of the waste water load from the process at the rauma

mill. Thanks to the system, the load on watercourses can be reduced more effectively.

eVents in

2014

SKILLED PERSONNEL aRE tHE PREREqUISItE FOR OUR COMPEtItIVE-

NESS. Therefore, we encourage everyone to develop their competence and

working environment. effective management ensures that everyone understands

their objectives and receives feedback on their work. High-quality supervisory

work is promoted by means of supervisor and specialist coaching.

in order to highlight the importance of good supervisory work, we introduced

the Metsä Fibre Supervisor of the year award in 2014. The first employee to

receive the title is teemu Leppänen, Operation Manager at the rauma mill.

The Supervisor of the year will be selected annually from now on.

“The cornerstones of Metsä Fibre’s success are high personnel competence

and high-quality supervisory work. As we want to develop these strenghts

further, competence has been chosen the 2015 theme at Metsä Fibre,” says

ilkka Hämälä, CeO.

Metsä Fibre’s Supervisor of the Year selected for the first time

2014 IN BRIEF 9

bioproDuCt Mill – A MAjor inVestMent in tHe forest inDustryMetsä Fibre is preparing to build a bioproduct mill in the existing mill area in Äänekoski, Finland. Should it materialise, the mill would be the largest investment ever made in the forest industry in Finland.

Metsä fibre’s DeVelopMent pAtHs

reAD MOre www.biotuotetehdas.fi

Pre-planning of the mill, the Environmental Impact assessment (EIa) and environmental permit processes start

May

2014Pre-planning of the mill and the environmental permit process end

January

2015Demolition of the old mill starts

letter of Intent to develop vuosaari as the export harbour

Ely Centre issues its statement on the EIa report EIa process end

October

BaRK*

PULPWOOD

PULP*

WOOD DUSt* tURPENtINE* aND taLL OIL*

ODOROUS GaSES

LIGNIN

SLUDGE

CLEaN WatER

DREGS aND aSHES

BIOENERGY*PowerProsess steamDistrict heat

GLaUBER SaLtPULP UPGRaDING

Producer gas from bark and sludge for the mill’s own use

Sulphuric acid and methanol from odorous gases for the mill’s own use

New bioproducts from lignin

Fertiliser and earth work material from dregs and ashes

New textile fibres from pulp

Biocomposites from pulp

Biogas from sludge for traffic fuel or the mill’s own use

New biofuels from bark, wood dust and energy wood

The new mill is called a bioproduct mill since it will increase the product portfolio with new bioprod-ucts, generate excess bioenergy, and will not use any

fossil-based fuels. Metsä Fibre is currently research-ing new bioproducts and processes as presented in the figure below.

*Current bioproducts

10 BIOpROdUCt MIll

tHE BIOPRODUCt MILL PROJECt has progressed smoothly on a tight schedule

as planned.

“By the early spring, we will have negotiated agreements with our principal

machine suppliers and earthworks contractors, and so construction can begin

immediately after a favourable decision is made,” says timo Merikallio, Project

Director.

Building a new mill on such a tight schedule requires solid project competence.

“Project competence seems to be embedded in our DnA,” says Merikallio. “we have

a can-do culture and plenty of seasoned project professionals we can call on.”

The environmental impact assessment procedure (eiA) was completed in

October 2014, and the mill received its environmental permit in January 2015. The

progress of the project has been accelerated by the pilot project launched by the

Ministry of the environment, which streamlined the environmental permit procedure.

“Cooperation with the authorities has been open and interactive and has had a

considerable positive impact on our progress,” explains Merikallio.

A masterpiece of project competence

In addition to pulp, the mill would produce a versatile range of bioproducts, such as tall oil, turpentine, and bioenergy. The planning and construction stage of the mill also focuses on the production of new bioproducts. Potential new bioproducts include producer gas, sulphuric acid, textile fibres, biocomposites, fertilisers and biogas. Metsä Fibre is exploring several different product paths, which would

Should it materialise, the bioproduct mill in Äänekoski with an annual pulp production capacity of 1.3 million tonnes would be the largest ever investment in the forest industry in Finland. It would replace the current Äänekoski pulp mill. If the investment prereq-uisites are met, the investment decision of the bioproduct mill will be made in spring 2015, and the mill could be operational in 2017.

In addition to pulp, the mill would produce bioenergy and various bioproducts. The wood raw material and side streams would be utilised 100 per cent as bioproducts

we explore new bioproDuCts

Investment decision Civil engineering Contracts on the main equipment deliveries

Spring

2016Main equipment installations

Spring

start-up of the mill

autumn

Testing starts

Spring

2017nominal production begins

Summer

2018

and bioenergy, and would increase the share of renewable energy in Finland by over two percentage points. Although the production capacity of the new mill would be consider-ably higher than that of the current mill, its emissions would be lower than allowed by the current mill’s environmental permit.

be implemented gradually, some perhaps as early as 2017 in the mill’s schedule.

Metsä Fibre and Itochu are examining producing textile fibres from pulp by means of a new, efficient and environmentally sound production method. Metsä Fibre’s participa-tion in the research began with Fibic Ltd’s research programme in 2009. Metsä Fibre is also examining the production of biogas from

sludge from the waste water treatment plant by means of a decomposition method. Biogas could be used in the lime kiln of the mill or as a biofuel for vehicles.

The bioproduct mill will be a basis for new industrial symbioses, which would expand the economically significant network of companies operating around the mill. The business model is based on an efficient partner network, in which new bioproducts are upgraded in cooperation with various players.

Investment: eur 1.1 billion

Pulp production: 1.3 million tonnes of softwood and hardwood pulp per year

Wood consumption: 6.5 million m3 per year

Employment impact:

more than 2,500 jobs throughout the value chain

Impact on the economy:

an annual impact of more than eur 0.5 billion on the Finnish economy

BIOpROdUCt MIll 11

In 2014, Metsä Fibre supplied a total of 3.1 million tonnes of pulp from our own mills and from the pulp producers we represent. We sell approximately 70 per cent of our pulp to customers in Europe and Asia, and the rest to our owners.

Global demand for softwood pulp is increasing steadily. An integral part of the growth comes from Asia, where increasing wealth contributes to the demand for tissue papers, board and bio-based specialty prod-ucts considerably. We deliver approximately 25 per cent of our pulp to Asia.

WE RESPOND tO CHaNGESIn 2014, we renewed our product range to better meet the changing customer needs. For example, softwood pulp at the Joutseno mill was developed for the needs of tissue paper manufacturers, while the Rauma mill is

focusing on the production of high-quality pulp suitable for printing paper. The northern fibres of the Kemi mill are particularly suitable for board as well as tissue paper and specialty products. The Äänekoski mill produces the best birch pulp in the world.

In addition to renewing its product range, Metsä Fibre upgraded its management model to better manage the quality of pulp and exceptional situations. We also have the innovative Botnia FOX quality index at our disposal for real-time quality monitoring. The RFID wireless remote monitoring of pulp units makes unit-specific quality data available for our customers, enabling them to reduce their pulp consumption and improve the quality of their products.

The Botnia product family includes biochemicals manufactured from the side streams of pulp production, tall oil and

turpentine, as well as bioenergy, which together make up 10 per cent of Metsä Fibre’s sales. Since 2014, tall oil and turpentine have been sold under the Botnia brand.

FIBRE ExPERtISE at OUR CUStOMERS’ COMMaNDMetsä Fibre’s strength is its excellent fibre raw material and a strong service concept. Custom-ers have access to the fibre expertise we have accumulated over the years through our technical customer service and the product development projects we have carried out together with our customers.

In addition, we develop new technical and logistics services, which improve our custom-ers’ competitiveness. Botnia IdeaBooster is a perfect example of a service in which joint innovation generates new opportunities for both us and our customers.

botniA proDuCts AnD serViCesMetsä Fibre’s pulp grades are an excellent raw material for board and paper. Our Botnia product family also includes services that enable customers to get the greatest benefit from our fibres.

PulP DeliverieS1,000 TOnneS

PulP enD uSe%

BOaRD 32 PRInTIng PaPERs 32 TIssuE PaPERs 21 sPECIalTy PRODuCTs 15

3,000

2,500

2,000

1,500

1,000

500

02010 2011 2012 2013 2014

sOFTWOOD PulP haRDWOOD PulP

12 BOtNIa pROdUCtS aNd SERvICES

Our high-quality pulp grades meet the needs of even the most demanding customers. We make effective use of raw materials, keep emissions low and work safely. We work in close cooperation with our customers, which offers us a more profound understanding of their business operations and needs. Our technical services help customers gain the best benefits from fibres. Our supply chain ensures that the products we supply are in the right place at the right time. these elements form our customer promise, Fibres of Success, a commitment of our 850 professionals.

fibres of suCCess: our CustoMer proMise

MEtSä FIBRE accelerates brainstorming and innovation with its new web

service Botnia ideaBooster, a platform for joint ideas. Although Metsä Fibre

has been organising joint innovation Days with its customers for a long

time,

ideaBooster takes the concept to the next level.

“we can proceed right to the further development stage during the

innovation Day when large number of ideas are recorded in the ideaBooster

already before the actual innovation Day”, says Mikael Lagerblom,

vP, General Manager of Metsä Fibre GmbH.

The ideas with the greatest potential will be processed further into

development programmes aimed at adding value to the customer’s opera-

tions. The ideas generated in ideaBooster are largely related to improving

the properties of a customer’s products or reducing material costs.

Potential new pulp products and process improvements as a whole are also

areas of interest.

The new service increases both the quantity and quality of ideas. Botnia

ideaBooster will be introduced to customers more extensively during 2015.

Botnia ideaBooster opens up intriguing opportunities

PULP GRaDES 90% *Softwood pulp: Botnia nordic PinePolysulphide pulp: Botnia nordic Pine+ reinforcement pulp: Botnia nordic StrongBirch pulp: Botnia nordic BirchHigh yield pulp: Botnia High yield End products: Tissue papers, boards, printing papers, specialty products

BIOCHEMICaLS 4% *Tall oil: Botnia nordic CTOTurpentine: Botnia nordic CST End products: Specialty products in the chemical industry and biofuels

BIOENERGY 6% *electricity Heat Bark wood dust

*) Per cent of sales

added value for customers

Fibres of Successdelivered through knowhow and dedication

CUStOMER

tHe botniA proDuCt fAMily

PaRtNERSHIPS FOR SUCCESSFUL

BUSINESS

PULP-MaKING KNOWHOW

& ExPERtISE

LEaN LOGIStICS

MEtSä FIBRE

SUStaINaBILItY SERVICES

BOtNIa

tECHNICaL SERVICES

WItH INSIGHt

MEtSä BOaRD

BOtNIa pROdUCtS aNd SERvICES 13

suCCess tHrougHsustAinAbility

we bring tHe forest to you

we CreAte well-being

we offer sustAinAble CHoiCes

we work for A better CliMAte AnD nAture

Sustainability is an integral part of Metsä Fibre’s daily operations. We use the best available technology and take care of the safety and well-being of our personnel. Metsä Fibre’s pulps and other bioproducts are safe and sustainable. the raw material of our products is renewable northern wood.

14 SUStaINaBIlItY

10%

aCCIDEnT FREquEnCy RaTE (lTa1)

4.9

ThE PROCEss WaTER usE DECREasED

30%

Metsä group’s sustAinAbility tHeMes

Metsä fibre’s perforMAnCe

CERTIFIED WOOD

we offer sustainable choices

Turning renewable wood into sustainable, safe and recyclable products

Providing customer-focused services and solutions

Seeking and adopting innovations for continuous improvement and renewal

we bring the forest to you

Promoting sustainable forest management, certification and the diversity of forest nature

enhancing sustainability in the value chain

ensuring the traceability of raw materials

we work for a better climate and nature

Making efficient use of raw materials, energy and water

increasing the value of side streams

Maximizing the share of bioenergy

Minimizing emissions to water and air

we create well-being ensuring ethical business

practices

improving safety at work

Assuring responsible management

Contributing to local livelihoods and society

• We supply high-quality and safe pulp, biochemicals and bioenergy to our customers

• all our mills have certified product safety systems

• We have implemented an operating model for product quality management

• approximately 10% of our net sales comes from biochemicals and bioenergy

• 87% of the wood raw material is certified

• We can trace the origin of the wood we use 100%

• Over 20% decrease in fossil CO2 emissions since 2010

• Over 1% improvement in total energy-efficiency in 2014 compared to 2013

• 30% decrease in the use of process water during the last 10 years

• Chemical oxygen demand is 11.6 kg per product tonne

• 92% of personnel have taken the Code of Conduct training

• accident frequency rate 4.9

• sickness absenteeism rate 3.9%

• Over 80% of the wood we use is certified

• Metsä group knows the origin of the wood it procures and assures the sustainability and legality of the entire supply chain

• 30% less fossil CO2 emissions per product tonne*

• 10% improvement in our energy-efficiency*

• 10% reduction in process water use per product tonne**

• Chemical oxygen demand (COD) less than 11 kg per product tonne

• Code of Conduct training for all personnel

• Zero accidents

• sickness absenteeism rate below 3%

Metsä fibre’s tArgets

reAD MOre FrOM Metsä Group’s

Sustainability report

www.metsagroup.com/sustainability

OF OuR nET salEs COMEs FROM BIOChEMICals anD BIOEnERgy

87%

By PRODuCT TOnnE In 10 yEaRs

* from the 2009 level by 2020

** from the 2010 level by 2020

100% FROM TRaCEaBlE sOuCEs

SUStaINaBIlItY 15

1

113

410

5

6

12

8

9

7 2

Highly important

important

Fairly important

MAteriAlity AnAlysis

in 2014, Metsä Group updated its sustainability themes and priorities by conducting a materiality analysis based on the feed-back from its own business operations and key stakeholders.

In the materiality analysis we examined the importance of the sustainability topics to our customers and other stakeholders, and evalu-ated their effects on our operations. The most relevant sustainability focus areas of Metsä Fibre are safety at work, bioenergy, sustainable forest management, material and energy efficiency, environmental efficiency and product safety.

Personnel well-being and safety at work are a priority for us. By monitoring absences

and accident frequency throughout the Group, we are able to pro actively address factors that might endanger working ability and occupational safety at an early stage.

Forest certification is a way for us to prove that the purchasing decisions of our own customers and their customers support sustainable forest management. Metsä Group is committed to promoting sustainable forest management, certification and the diversity of forest nature.

We use energy, raw materials and other natural resources efficiently and minimize emissions and waste. We are committed to mitigating climate change by replacing fossil fuels with biofuels produced from renewable raw materials and by improving energy efficiency.

It is highly important for Metsä Fibre that its products are safe to use.

OUR SUStaINaBILItY tHEMES WE OFFER SUStaINaBLE CHOICES

WE WORK FOR a BEttER CLIMatE aND NatURE

WE BRING tHE FORESt tO YOU

WE CREatE WELL-BEING

Safety at work

Sustainable forest management

Product safely

Product and process innovation

Material and energy effiency

Bioenergy

Sustainable supply chain

emission to air and water

Circular economy

new bioproducts

Supporting local livelihoods and society

water use

1

2

3

4

5

6

7

8

9

10

11

12

IMPaCt ON BUSINESS

IMPORtaNCE tO OUR StaKEHOLDERS

IMPaCt OF tHE SUStaINaBILItY tOPICS

ON OUR BUSINESS

OUR SUStaINaBILItY PRIORItIES+ =

IMP

OR

taN

CE

tO

OU

R S

taK

EH

OLD

ER

S

16 MatERIalItY aNalYSIS

sAfety At workOur occupational safety has improved through long-term work. In 2014, Metsä Fibre’s accident frequency was a record low, 4.9. Our goal is to reach zero accidents. We use an extensive occupational safety management system, which is based on proactive work. Observations from our person-nel as well as safety walks and talks are an essential part of our safety efforts.

sustAinAble forest MAnAgeMentMetsä group supports sustainable forest management and wants to promote the diversity of nature. In this way, we secure the availability of sustainable wood also in the future. In total 87 per cent of the wood Metsä Fibre uses originates from certified forests.

enVironMentAl effiCienCygood environmental performance is a competitive advantage for us. low emissions indicate good usability and consistent operation. Our mill’s emis-sions to water and air are in accor-dance with the requirements of the best available technology. Reducing water consumption and chemical oxygen demand is among our key objectives.

bioenergyPulp mills make efficient use of wood raw material by producing bioenergy and biochemicals in addition to pulp. not only are our mills self-sufficient in terms of energy, they also generate excess energy for the use of nearby communities. By-products from our production – bark and wood dust – are also used as fuel in power plants. In Joutseno, renewable fuel is produ-ced from bark through gasification, which replaces fossil natural gas.

MAteriAl AnD energy effiCienCyWe use our renewable wood raw material efficiently. a large portion of side streams generated in our produc-tion are directed to material reuse or energy production. In pulp production, wood is barked and chipped. The resulting bark and wood dust are used as biofuel or biogas in our own units with the excess being sold to further processing to be used as fuel or raw material. The amount of waste genera-ted in production is reduced conti-nuously and is directed for reuse as much as possible.

proDuCt sAfetyMetsä Fibre’s pulps comply with food safety regulations. We have certified the product safety systems of our mills. By taking care of the product safety of our products, we do our part to ensure that they can be safely used also in direct contact with food or people.

Comparison information from the Finnish Forest Industries Federation.

Metsä Fibre’s figures include all lost-time accidents (lTa1).

METsä FIBRE FInnIsh PaPER InDusTRy

200

150

100

50

0

2010 2011 2012 20142013

sElF-suFFICIEnCy RaTE In ElECTRICITy, %

15

10

5

0

2010 2011 2012 20142013

ChEMICal OxygEn DEManD (COD) Kg/PulP TOnnE

100

80

60

40

20

0

2011 2012 20142013

WasTE REusE RaTE, %

less than 10 per cent of all the forests in the

world are certified

25 per cent of supply of world’s

industrial round wood is certified

87 per cent of the wood used by the

Metsä Fibre comes from certified forests

10% 25%

25

20

15

10

5

0

2010 2011 2012 20142013

lOsT-TIME aCCIDEnTs /MIllIOn WORKED hOuRs

87%

MatERIalItY aNalYSIS 17

MAnAgeMent of enVironMentAl iMpACtsMetsä Fibre’s environmental performance improved in 2014. We maintain the environmental efficiency of our mills through investments and continuous development.

EFFLUENtS aND WaStE 2014 2013

EFFLUENtS

Chemical oxygen demand (COD), t 26,164 29,223

Biological oxygen demand (BOD), t 474 502

Phosphorus (P), t 21 23

nitrogen (n), t 327 331

AOX, t 270 282

SOLID WaStE

landfill waste, t 32,962 42,853

Hazardous waste, t 132 177

MatERIaLS 2014 2013

RaW MatERIaL

wood, million m3 12.24 12.37

PROCESS FUELS

Fossil fuels, Gwh 738 874

WatER

Process and cooling water, m3 116,594 119,233

EMISSIONS tO aIR 2014 2013

Sulphur (SO2 incl. TrS sulphur), t 1,164 1,183

nitrogen oxides (nOx), t 4,079 4,046

Fossil carbon dioxide (CO2), t 190,000 223,000

Particles, t 942 1,017

MAteriAl bAlAnCe

PRODUCtS 2014 2013

Pulp, million t 2,257 2,297

Tall oil, t 84,605 84,525

Turpentine, t 3,726 3,642

Sawn wood, m3 233,306 243,569

electricity*, Gwh 670 596

Heat*, Gwh 719 863

Biofuel*, Gwh 1,273 1,293

*includes only sold energy

18 ENvIRONMENtal IMpaCtS

In 2014, the most significant investments at Metsä Fibre included modernising the wood chip silo, its treatment of odorous gases and replacing the bottom and air system of the recovery boiler at the Joutseno mill. The new wood chip silo has increased the reliability of the mill’s operations. The new odorous gas processing system has reduced the amount of odour emissions in the mill’s locality remark-ably. The modernisation of the recovery boiler’s air system has reduced nitrogen oxide emissions.

DEVELOPMENt PROJECtSDuring the Kemi mill’s shutdown in 2014, we improved the collecting and treatment of mild odorous gases in causticising. This provided better control of combustion in the lime kiln and decreased its sulphur emissions.

Metsä Fibre mills have been decreasing their process water consumption successfully. At the Kemi mill, in particular, the new water

plant has made it possible to effectively utilise internal water fractions. At the same time, the mill’s energy efficiency has improved by using the warm water fractions generated at the mill for the production of fresh water.

Reducing water consumption also improves the energy efficiency of the mills by means of reduced pumping; moreover, it makes the operations of the treatment plants more effective as waste waters stay longer at the biological treatment plant.

The load on waterways at all mills was in compliance with the permit limits, and the COD load of Metsä Fibre on waterways decreased.

CORRECtIVE aCtIONSIsolated deviations in the permit limits of emissions to the air were a challenge at the mills. At the Rauma mill, the permit limit of the odorous gas boiler was exceeded in terms of odorous sulphur-containing compounds;

further, at the Kemi mill, the permit limit set for the chlorine dioxide (ClO2) concentration of exhaust gas was exceeded. Both mills changed their internal operating methods and adjusted their process parameters as corrective measures.

Particle emission to air from the lime kiln was a problem at the Joutseno mill. As correc-tive measures, mechanical improments were made on the electrostatic precipitator, and several studies and process trials were carried out to reduce the particle level.

Under normal conditions, the mills’ processing rates of mild and strong odorous gases were on a good level. However, the treatment of mild odorous gases fell below its permit limit in June at the Joutseno mill, which was due to process issues at the recovery boiler prior to the shutdown. Also, the treat-ment rate of weak odorous gases at Kemi mill remained under the monthly permit limit after a sudden mill shutdown in December.

WORKING tOGEtHER WItH Technical research Centre of Finland,

Metsä Fibre has developed a method of calculating the waste water

load of pulp mills. The wastewater FOX enables real-time monitoring

of the chemical oxygen demand (COD) of the waste water generated

in the mill process.

“Previously, we monitored waste water COD by taking samples,

which we analysed once a day. By the time the analysis results were

in, they were already outdated,” explains project leader ari Poukka.

with the help of waste water FOX, the mill’s process can be

steered to lower the environmental load more efficiently.

“we are able to identify the root causes of deviations before they even

occur. Compared to the old systems, this method is outstanding.”

waste water FOX was first implemented at Metsä Fibre’s rauma mill

in December 2014.

Wastewater FOX provides real-time data on discharges

FOSSIL CO2 EMISSIONS 1,000 TOnneS

LaNDFILL WaStEKG/PulP TOnne (weT)

CHEMICaL OxYGEN DEMaND (COD) IN EFFLUENtKG/PulP TOnne

ENVIRONMENtaL INVEStMENtS, PULP MILLSeur MilliOn

EFFLUENt FLOWm3 /PulP TOnne

10

250,000

200,000

150,000

100,000

50,000

013 1411 12 10

50

40

30

20

10

013 1411 12 10

15

14

13

12

11

1013 1411 1210

50

40

30

20

10

013 1411 12 10

10

8

6

4

2

013 1411 12

ENvIRONMENtal IMpaCtS 19

enVironMentAl bAlAnCe

JOUtSENO KEMI RaUMa ääNEKOSKI SVIR tOtaL 2014 tOtaL 2013

PRODUCtION

Pulp t 593,842 552,050 607,242 504,255 2,257 389 2,296,596

Sawn wood m3 233,306 233,306 243,569

WOOD CONSUMPtION

Total wood consumption 1,000 m3 3,351 2,801 3,276 2,305 511 12,244 12,369

Certified wood % 86 96 84 89 44 87 85

EFFLUENtS

WaStE WatER

Process water volume 1,000 m3 16,258 15,590 14,855 11,768 249 58,721 60,955

Total suspended solids t 263 369 253 472 12 1,368 1,378

Chemical oxygen demand (COD) t 5640 6960 8467 5085 12 26,164 29,223

Biological oxygen demand (BOD) t 137 127 87 123 1.1 474 502

Phosphorus (P) t 4.1 5.0 6.3 5.4 0.1 21 23

nitrogen (n) t 97 103 55 71 0.8 327 331

AOX t 90 66 69 45 0 270 282

aIR EMISSIONS

Sulphur dioxide (as SO2) t 453 105 157 346 2.4 1,063 1,033

TrS (as S) t 12 23 10 6.3 0 52 75

nOx (as nO2) t 976 1,250 913 921 28 4,079 4,046

CO2 from fossil sources 1,000 t 43 62 25 59 0.3 190 223

CO2 from biomass 1,000 t 1,237 1,305 1,314 948 19 4,822 4,911

Particles t 134 170 211 408 2.8 942 1,017

WaStE

landfill waste t 9,597 158 12,824 10,204 88 32,962 42,853

Hazardous waste t 42 45 38 45 0 169 177

ENERGY

wood based fuel use Gwh 3,401 3,589 3,614 2,607 52 13,263 13,508

Fossil fuel use Gwh 219 219 90 209 1 738 874

Purchased electricity Gwh -250 -165 -173 -82 13 -657 -596

Purchased heat Gwh -19 -434 -119 -147 0 -719 -863

20 ENvIRONMENtal BalaNCE

speCifiC eMissions froM pulp Mills in tHe norDiC Countries

80

60

40

20

0

Jout

seno

Kem

i

rau

ma

Ään

ekos

ki

Metsä Fibre mills Other pulp mills in Finland Pulp mills in Sweden

–– BAT max.

PHOSPHORUS (P) G/PulP TOnne

0.20

0.18

0.16

0.14

0.12

0.10

0.08

0.06

0,04

0,02

0

Ään

ekos

ki

rau

ma

Kem

i

Jout

seno


–– BAT max.

CHLORINE aND OtHER HaLOGENS BOUND tO ORGaNIC MatERIaL IN EFFLUENt (aOx) KG/PulP TOnne

Specific emissions from Metsä Fibre’s and other Finnish and Swedish mills producing bleached sulphate pulp are compared below. Metsä Fibre’s figures are from 2014. the other figures are from 2013 and they are based on the statistics of the Finnish Forest industries Federation and the Swedish Forest industries Federation.

CHEMICaL OxYGEN DEMaND (CODCR) KG/PulP TOnne

Jout

seno

Ään

ekos

ki

Kem

i

rau

ma


–– BAT max.

30

25

20

15

10

5

0

EMISSIONS FROM tHE NOtHERN pUlp MIllS 21

MEtSä FIBRE

P.O.Box 30

02020 MeTSÄ, Finland

Tel. +358 10 4612

www.metsafibre.com

Cov

er: C

arta

inte

gra

23

5 g

/m2, i

nte

rior

: Gal

erie

Art

Silk

13

0 g

/m2. ©

Met

sä F

ibre

20

15

PEFC/02-31-120

Metsä Fibre Annual Review 2014

Investor Relations

Transcript of Metsä Fibre Annual Review 2014