Strategy - Microsoft...focus, growth, geographical focus and innovation. We focus on pulp & paper,...

Behind the sharpened

Strategy

New tissue technologiesPAGE 2O

Recycling phosphorusPAGE 26

E3 helps save energy135 improvements in 2012 p. 8

Sustainability 2.0 It starts from the product p. 8

Managing talentRaisa Jyrkinen knows how p. 38 S T A K E H O L D E R M A G A Z I N E 1 ·2 0 1 3

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MY VIEW

”Innovation is key for our strategy

and a key enabler for growth.”

KEM

IRA

K E M I R A S T A K E H O L D E R M A G A Z I N E • 3

riving performance, innovation and dedication to customer success are the motivating forces behind Kemira. Together with innovative products they enable us to offer something unique: we help our customers create more value by applying our expertise to their applications where water meets chemistry.

We shared our sharpened strategy this spring. We have made clear choices in terms of business focus, growth, geographical focus and innovation.

We focus on pulp & paper, oil & gas, mining as well as water treat-ment to best help our customers to improve their water, energy and raw-material efficiency. With the sharpened strategy, we are rebalanc-ing Kemira, moving from a strong focus on drinking water and water purification toward making Kemira an important partner for our industrial customers. We want to provide the most valuable expertise and chemicals for water-intensive industries.

Mature markets continue to be important for all of our segments. In emerging markets, we are focusing on selective expansion. The Asian business will be clearly driven by paper, with a focus on China and Indonesia. In South America, the focus is on oil, mining, and pulp. We will also focus on the Middle East in oil and gas and on Africa in min-ing.

Innovation is key for our strategy. We will concentrate our R&D efforts on process improvement innovations in the paper, oil and gas and mining industries, as well as on the related product lines, such as polymers, sizing products and other process chemicals. We aim to increase our R&D expenses-to-sales for differentiated products to over 4 percent (1.7 percent in 2012).

Last year, we launched the Fit for Growth restructuring program, which has progressed as planned. Our efficiency has improved, our organization is more streamlined and we make decisions closer to the customer than before. We have built a solid foundation for imple-menting our sharpened strategy until 2020.

Wolfgang BüchelePresident and CEO

Kemira

THE HEADLINE for Kemira’s strategy is From redesign to expan-sion. Once the redesign is accomplished, clearly in line with our financial targets, we want to focus on expansion. By the end of

2020, Kemira aims to become an industry and technology leader in its chosen target markets.

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LEARNING AND RISKS. “Learning from successes as well as mistakes is one of our leading principles. You cannot create anything new without taking risks.” Raisa Jyrkinen speaks about talent management. PAGES 38-41

CONTENT

“It’s fantastic that the phosphorus in wastewater sludge can be recycled and reused virtually indefinitely.” PAGES 26–29 Growth in South Africa

The mining industry in Africa produces more than 60 metals and minerals. Copper and gold are among the strategic core ores for Kemira. page 11

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New sizing plants We have a unique position as a supplier of sizing solutions, with our expertise covering the entire production chain. This year, new plants

will be opened in North America, Sweden and China. page 10

Tissue technologies New tissue paper technologies are attracting interest around the world, including China. Precisely targeted chemicals, advanced

technologies and strong expertise are the essentials of manufacturing today.Page 20

Phosphorus recycling According to our recent study, plants can effectively use the phospho-rus in sludge from wastewater treatment plants. Read more about the

research results of Kemira and MTT Agrifood Research Finland. page 26

Responsibility today What do corporate responsibility targets consist of? Product development, for example, is evaluated in terms of sustainability, from the product idea all the way to the launch, says Mari Rosengren. page 8

E3 helps save energy The E3 program was launched in 2010, and we have since reviewed 92 percent of our locations for energy consumption. Our 343 improvement projects have produced calculated savings of EUR 6.4 million. page 8

Growth and innovationKemira is seeking growth particularly in the pulp, paper, oil and mining indus-tries by developing products and providing innovations that enable the com-pany to stand out from the competition.page 12

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DID you know that E3 is short from Energy Efficiency Enhancement? It also refers to the energy-efficiency program Kemira launched in 2010. Kemira aims to develop an energy-efficiency

indicator (EEI), which is not dependent on produc-tion structure or sales volumes. Kemira’s global EEI will be based on location-specific calculations and indices.

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441 619Painotuote

WaterLink is a magazine for Kemira’s stakeholders. The magazine is published in Finnish and English. PUBLISHER: Kemira Oyj, www.kemira.com. EDITOR IN CHIEF: Marie Lundgren, tel. +46 42 17 11 19. PRODUCTION: A-lehdet Dialogi Oy.

www.dialogi.fi. EDITOR: Pia Sievinen. PRODUCER: Marja Ylimäki. ART DIRECTION: Jesper Vuori, Heli Ranta, Iida Lehtinen. SALES DIRECTOR: Maarit Pojanluoma. PRINTED BY: PunaMusta Joensuu. ISSN 1798-9639. PAPER: UPM Fine 120 g/m2 and Edixion 250 g/m2. COVER PHOTO: Jussi Kivelä. TRANS-LATIONS: AAC Global. Please send your feedback to [email protected]. Subscriptions and changes of address: www.kemira.com/media

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As a global chemicals company, Kemira has actively invested in safety and envi-ronmental responsibility since the early 1990s. In 2011, the company launched a process to expand its key areas in corpo-rate responsibility to cover its effects on major stakeholder groups.

The process was based on a survey in which representatives of stakeholder groups were asked to define the most important areas of sustainability.

The respondents included customers, employees, shareholders, suppliers and students as well as representatives of various organizations and the scientific community. Targets were also examined from the perspective of business strat-egy, and precise targets and indicators were determined for key areas as part of the process.

“Most of our targets are related to responsible operations, people and the environment,” says riikka timonen, Director, Sustainability & Public Affairs.

Occupational health and safety were regarded as the most important areas by the respondents. In occupational safety, the goal is zero accidents.

Kemira wants to offer its custom-ers sustainable products and solutions. Sustainability and safety aspects will be integrated into the development of all new products by the end of 2014. In addition, the company aims to improve water and energy efficiency in its pro-

duction processes and increase collabo-ration within the supply chain.

“We will evaluate the quality and responsibility of our suppliers of raw materials and address any issues in development discussions, where we will seek solutions together,” says Timonen.

Kemira’s Code of Conduct serves as the foundation for compliance with val-ues, laws and regulations in the entire organization. The company seeks to offer business conduct training for all of its 4,600 employees during 2013.

To succeed, a company needs good lead-ers. In terms of leadership development and performance management, Kemi-ra’s goals include regular leadership training and annual one-on-one goal discussions for all employees.

Corporate responsibility goals were defined globally in different business areas as part of an extensive process. The goals include that all locations with more than 50 employees must con-tribute to at least one project within a period of three years that promotes the well-being of their local community and the environment.

“The idea is not to provide just finan-cial support. Our employees will partic-ipate in practical work related to edu-cational cooperation or water efficiency, for example.”

anna väre

BRIEFING: IN-HOUSE

KEM

IRA

TARGETS AND INDICATORS for sustainability


“CORPORATE identity is based on strategy. It crys-tallizes strategy and is part of its implementation.” Marjo Vänttinen, Senior Manager, Corporate Identity

Kemira’s sharpened strategy is evident not only in our ways of working, but also in our ways of communicating and being visible. New focus areas mean new key messages.

Kemira’s corporate identity was sharp-ened as part of the strategy process.

“Corporate identity is based on strat-egy and competitive edge. In a way, cor-porate identity is part of strategy imple-mentation. Kemira’s core messages were redefined in conjunction with sharpening the company’s strategy,” says marjo vänttinen, Senior Manager, Corporate Identity.

The core messages included brand promise, vision, purpose and strategy messages at the level of the entire com-pany as well as each segment.

The sharpened strategy is also reflected in Kemira’s visual image. The logo and the blue color remain the main

Sharpened strategy, more focused identity

”We wanted to create an online service that combines good customer service with high-quality content,” says liisa tik-kanen, Online Media Manager, Kemira.

The main purposes of the redesign of Kemira.com were to make information easier to find and serve various interest groups more efficiently. The improved website offers information on Kemira’s expertise, products and services to exist-ing and potential customers as well as prospective employees.

Most of the content was produced by Kemira’s experts. The structure reflects the company’s service model as an expert organization: the further visitors proceed on the website, the more detailed and technical information they will be pro-

vided. In addition, the website has spe-cific sections for investors, analysts and reporters seeking financial information and tools for analyzing it.

“We also made use of social media fea-tures when optimizing usability. The con-tent is easy to share, and our real-time Twitter feed is available on the website. In addition, we publish event information and images on Facebook,” says Tikkanen.

Kemira.com attracts an average of 36,000 visitors each month, mostly from Finland, the United States, Great Brit-ain, Germany and India.

“Our products and applications attract the most interest. In addition, many watch our company presentation, browse open positions and investor information

or look for contact information.”The redesigned website provides direct

contact information for technical experts and sales.

”We wanted to replace impersonal contact forms with direct contacts. This is a relatively new approach in our field, but we believe it will improve customer service,” says Tikkanen.

The website is available in Finnish and English and will be published in Chinese next.anna väre

Read the QR code with your mobile phone and visit the new Kemira.com.

High-quality content and service at Kemira.com

elements, but the imagery and other vis-ual elements have been updated. The new identity is evident in the new brand promise as well as in business cards and presentation templates, to name just a few examples.

The new corporate identity will bring the company closer to customers. It communicates how water meets chemis-try in customers’ processes.

pia sievinen

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What is Kemira’s E3 program about? We carry out energy efficiency reviews in selected locations. In collaboration with local plants and offices, we identify the most promising options for improvement and evaluate project profitabil-ity. These measures increase energy awareness, improve energy efficiency, decrease production costs and reduce emissions.

What type of results has the program produced? The program was launched in 2010, and we have since reviewed 26 locations, which repre-sent 92 percent of the total energy consumption of our locations. We have identified 839 poten-tial improvement projects, 343 of which we have already implemented, producing annual savings of EUR 6.4 million.

A total of 135 improvements were carried out in 2012. Can you give a few examples? Some of them were general measures, such as improving the monitoring of department-specific and product-specific energy consumption. Not all of the measures require investments. We can gen-erate savings by adjusting process parameters, for example. Improved efficiency has also increased production capacity, which reduces nominal energy consumption.

How is E3 linked to Kemira’s strategy?Efficient water use and recycling, energy effi-ciency and reduced energy consumption go hand in hand with our strategy. E3 is part of Kemira’s E10 profitability program, which aims at a profit margin of more than 10 percent.

How does the program benefit your customers? Reduced energy consumption makes us a more responsible company and a more attractive part-ner for customers.

johanna paasikangas-tella

E3 seeks alternatives in energy efficiency

BRIEFING: GREEN IDEAS

”As part of our new corporate responsibility goals, product develop-ment is evaluated in terms of sustainability, from the product idea all the way to the launch,” says mari rosengren, Specialist, R&D Project Coordination, Kemira.

Corporate responsibility in product development is evaluated in three areas: the environment, people and costs. Environmental aspects include helping customers use water, energy and raw mate-

Responsibility

Q&A: Jukka Aarinen, Manager, Energy Efficiency


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“NEW innovations enable us to offer safer and more sustainable solutions for our customers.” Mari Rosengren, Specialist, R&D Project Coordination

rials more efficiently. Recycling and emissions are key consid-erations when selecting raw materials. Safety risks related to products and production chains concern people and society.

“We monitor safety factors over the long term. We evalu-ate product and process safety in our value chains, including the flammability and explosiveness of raw materials and risks related to transportation and use,” says Rosengren.

Costs and benefits are evaluated from the customer perspec-tive. Products and applications in development are compared to solutions available on the market.

“The purpose is to develop highly functional and cost-effi-cient solutions in collaboration with customers,” says Rosen-gren.”

anna väre

starts from the product

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BRIEFING: OUR WORLD

Sizing plant × 3Kemira is strengthening its position as the most versatile producer and supplier of sizing technologies and solutions for the paper industry. In 2013, Kemira will open new AKD emulsion plants in St. Catharines in Ontario, Canada, as well as in Helsingborg in Sweden and Yan-zhou in China.

“We have a unique position as a sup-plier of sizing solutions: our expertise cov-ers the entire production chain, from raw-materials to finished products. The new

plants will further strengthen our net-work,” says johannes fallmann, Direc-tor, Sizing Product Management, Paper.

The AKD emulsion lines in North America and China are currently start-ing operation, and the one in Sweden will be commissioned in June 2013.

“We will be able to better serve our customers worldwide. The new plants will strengthen our local presence in their regions,” says Fallmann.

johanna paasikangas-tella

KEM

IRA

“We have a unique position as a supplier of sizing solutions.”

K E M I R A S T A K E H O L D E R M A G A Z I N E • 1 1

THE MINING industry in Africa produces more than 60 metals and mineral products. Copper and gold are among the strategic core ores on which Kemira has decided to focus in Africa. In addition to the thicken-

ing process, we are actively developing solutions to tackle issues related to tailings ponds, for example. Treating water at different stages of the mining pro-cess is where we aim to excel. Providing expertise in

product selection, dosing, testing and supervising tri-als is our way to help our customers improve their processes in Africa and create a sustainable growth platform for Kemira.

Kemira South Africa Ltd was registered in October, with its office located to the west of Johannesburg.

What is the core function of Kemira SA?It was established to serve as a base for business development and customer sup-port for mining industries in Africa and the Middle East. Currently, sales manage-ment is focusing on South Africa, Zam-bia, the DRC, Ghana and Burkina Faso, among other countries. In business devel-opment, the focus is on southern and central African states and the western and the eastern African coast. The goal is to become the preferred supplier of water- and process-related chemistries to the mining industry.

What is the demand for Kemira’s products and expertise in Africa?Continuous infrastructure development and the huge potential for the discovery and development of mineral resources make the region attractive for many large international mining companies. Due to our international exposure and technical expertise, many investors and mine operators in Africa turn to us for process- and water-related chemistries.

Your goal is to become the preferred sup-plier of water- and process-related chemis-tries to the mining industry?We have already established a firm posi-tion as the major flocculant supplier for copper mine thickening processes in Zambia and the DRC. We have managed to achieve this through our close cooper-ation with customers and based on our solid application knowledge.

The questions were answered by James Miller, Sales Manager, Oil & Mining.

Growth in Africa

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INNOVATIONS

Kemira shared its sharpened strategy this spring. The company is seeking growth

particularly in the pulp, paper, oil, gas and mining industries by developing products and providing innovations that enable Kemira to

stand out from the competition. T E X T P I R K K O K O I V U · P H O T O S K E M I R A

Growth and

“Where water meets chemistry” is the essence of Kemira’s sharpened strategy. President and CEO wolfgang büchele shared the strategy this spring along with the first quarter results for 2013:“Water and chemistry interact, no matter where you look: drilling, treat-ment of drilling water, paper manufacturing or municipal water treat-ment. Together, water and chemistry bring benefits to our customers.” In 2012, Kemira launched a restructuring program that focuses on streamlining the company’s organizational structure, improving internal efficiency and optimizing its manufacturing network.

“We are well underway deliver an EBIT margin of 10 percent in 2014 through our Fit for Growth restructuring measures. Continuous effi-ciency improvement will remain key for successful strategy implementa-tion,” says Büchele.

Kemira’s sharpened strategy has four key areas: business focus, growth, geographical focus and innovation. Kemira’s business segments—Paper, Oil & Mining, Municipal & Industrial and ChemSolutions—have differ-ent roles within the strategy.

“We have two segments that focus on growth and two that focus on cash flow generation,” Büchele explains.

The company seeks growth particularly in the Paper segment and the

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Oil & Mining segment, with the Municipal & Industrial seg-ment aiming at profitability improvement and cash flow maxi-mization with ChemSolutions.

“The sharpened strategy further increases the significance of the Paper and Oil & Mining segments, which are expected to outpace market growth,” says Büchele.

He believes that the strong focus on specific industries will boost the company’s performance.

“Customers will see that we are committed to their needs and capable of delivering solutions tailored to their needs.”

Differentiated product lines—such as polymers, siz-ing products and other process chemicals—will play a sub-stantially increased role in Kemira’s product portfolio. The demand for differentiated products has been increasing for a

long time, and they hold great growth and innovation poten-tial. In basic chemicals, the goal is to maintain the present capacity and manufacture and deliver products as cost-effi-ciently as possible.

Innovation is a cornerstone of growth for Kemira. “The chemical industry is one of the most innovative indus-

tries,” says Büchele. In terms of innovation, Kemira focuses on differentiated

product lines. “Research and development give us a competi-tive edge in markets related to water quality and quantity man-agement. We will focus on process improvement innovations for the paper, oil, gas and mining industries as well as on the related product lines, such as polymers, sizing products and

Kemira’s strategy for 2013-2020

2012–2013 REDESIGNReach target profitability by implementing ”Fit for Growth”.

2013–2015 FOCUSAchieve a sustainable position in all target markets.

MISSION Population growth and scarce raw materials increase the need to produce more with less. We collaborate with water-intensive industries to make this possible.

VISION Kemira provides the most valuable expertise and chemicals for water-intensive industries.


other process chemicals. This enables us to create new products and stand out from the competition,” says heidi fagerholm, Chief Technology Officer, Kemira.

According to Fagerholm, Kemira’s strengths include its global R&D network and the ability to collaborate with various industries.

“In addition to high expertise in chemistry, the members of our R&D team have a profound knowledge of our customers’ industrial processes,” she says.

Process knowledge leads to an ability to identify new busi-ness opportunities.

“We can develop projects based on real business demand,” says Fagerholm.

Kemira intends to invest increasingly in the research and development of innovative products. Funding for related pro-

jects in the future will represent approximately 4 percent of Kemira’s revenue.

By 2016, the company intends to double its innovation-driven sales—that is, the sales of new products or new applica-tions of existing products introduced to the market within the last five years. The goal is for innovation sales to constitute 10 percent of revenue in 2016.

Europe and North America continue to be important markets for Kemira. Of emerging markets, China and Indonesia are the key countries for Paper, and Oil & Mining is targeting expan-sion in selected countries in South America, the Middle East and Africa.

2015–2017 ACCELERATEGrow through new products and services and expand in emerging markets.

2017–2020 EXPANDBecome the industry and technology leader in its chosen target markets.

KEMIRA’S FINANCIAL TARGETS FOR 2016REVENUE: EUR 2.6–2.7 billionEBITDA margin: 15% GEARING LEVEL: <60%

INNOVATIONKemira aims to double its innovation-driven sales* from 5% of total sales in 2012 to approximately 10% in 2016.

* Sales of new products and new applications of excisting products launched within the last 5 years.

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Kemira is the only company in its field that is truly committed to serving the pulp and paper industry,” says petri helsky, President, Paper, Kemira.

“Customers have an increasing need to improve their efficiency. They need a partner that will help them enhance process efficiency and develop innovative solutions for their challenges.”

Kemira is the market leader in paper chem-icals. According to Helsky, the company’s strong position is based on its leading-edge products, process knowledge and application expertise.

“We are thoroughly familiar with our customers’ processes, and we know how our chemicals can enhance process efficiency.”

While fostering its customer relationships in Europe and North America, Kemira seeks to gain a strong foothold in China and Indo-nesia. At the beginning of September, the management of the Paper segment will relo-cate to Hong Kong.

The use of recycled fiber is increasing in the pulp and paper industry. Hardwood is replacing softwood in primary-fiber pulp production, and there is a demand for lighter packaging materials and

paperboards. The trend toward higher filler content in printing and writing paper will continue.

“All these factors increase the need for addi-tional strength properties, which can only be achieved by adding novel chemicals,” says Hel-sky.

In line with Kemira’s strategy, the focus in paper chemicals will be on differentiated prod-uct lines, such as sizing products, strength additives and wet-end process chemicals. Kemira is a technology leader in retention, siz-ing products and strength additives, with vast expertise in water-treatment chemicals.

In pulp and paper manufacturing, basic chemicals are mainly bleaching chemicals.

“In basic chemicals, we will focus on key customers and new pulp mills with fully inte-grated chemical production.”

“FennoBind is a new special product, an alternative to latex.. It increases cost-effi-ciency, improves printability and decreases dependency on oil-based chemistry. Solu-tions that help customers achieve more with less are highly marketable. The production capacity for FennoBind has recently been increased.” More is in the making. “We will introduce exciting new products in the next few years.”

1: Strongly committed to paper


“We are tailoring solutions to customers’ chal-lenges, not just selling products,” says randy owens, President, Oil & Mining, Kemira.

“We focus our innovation on our customers’ processes.”

According to Owens, many trends are favorable to Kemira and create opportunities for further innovation. “High oil prices facil-itate the search for unconventional reserves. The increased production of shale gas and oil is an excellent example of new energy sources. Ore reserves are declining in quality, with ores containing an increasing amount of impuri-ties,” says Owens. “While these processes are becoming more water-intensive, environmen-tal regulations are becoming stricter, which calls for more efficient waste management, something Kemira can help address.”

Kemira offers chemicals and application knowledge that improve the yield of declin-ing reserves, reduce transportation and waste management costs and help save water and energy. The ability to identify these custom-ers’ challenges and quickly supply a solution is a key differentiator for Kemira. The innova-tion process is designed to quickly bring new technology to meet the pressing needs of the market.

The KemFlow friction reducer is a great example of a customized solution that pro-vides energy savings by reducing the horse-power needed to complete fracturing. It also allows water reuse, resulting in lower trucking and wastewater treatment costs and a reduced need for fresh water.

In mining, declining reserves of iron ore are the driver for the pelletization of fines. Addi-tionally, the use of binders can help increase iron assays. KemPel binder is Kemira’s solu-tion to address these challenges.

The Oil & Mining segment’s sales have been growing faster than the market, with partic-ular success in Europe and North America, providing a strong foundation for continued growth in selected emerging markets, such as South America, the Middle East and Africa.

“We are confident that our sharpened strat-egy targeted at addressing industry needs, our commitment to innovation and our under-standing of our customers’ challenges will position us for continued profitable growth,” says Owens.

2: From products to applications

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1 PAPER Provides unique expertise in applying chemicals and supporting pulp and paper producers to innovate and con-stantly improve their operational efficiency. We develop and commercialize new products to fulfil customer needs and to ensure the leading portfolio of products and services for

paper wet-end, focusing on packaging and board as well as tissue.Where? North America, Europe. Increasing focus on China, Indonesia and Brazil.

2 OIL & MINING Provides a unique combination of innova-tive chemicals and application knowledge that improves process efficiency and yield in oil, gas and metals recovery. Uses in-depth understanding of extraction processes to tai-lor solutions for water management and reuse.

Where? North America and Europe. Growth in South America, the Middle East and Africa.

3 MUNICIPAL & INDUSTRIAL Enables municipal and industrial customers to improve their water treatment efficiency by providing expertise and chemicals for raw water and waste-water management.Where? Europe and North America. Selected emerging

markets are monitored for growth opportunities.

4 CHEMSOLUTIONS Produces formic acids and high-per-formance derivatives as well as environmentally sound bleaching agents. Where? Europe.

Segment by segment

Kemira

AT YOUR SERVICE

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Precisely targeted chemicals, advanced technologies and strong expertise enhance

the efficiency of tissue paper manufacturing, making the process more environmentally

sustainable. New technologies attract interest around the world, including China,

the market hot spot. T E X T P I R K K O K O S K I • P H O T O S 1 2 3 R F

paper technolog iesNEW TISSUE

Tissue paper manufacturing combines centuries of experience in bio-mass treatment with modern technology, process chemicals and strong application expertise. Kemira’s tissue paper customers use more than 20 different programs in their production lines.

Kemira’s innovative technologies create a competitive edge and boost market shares. These technologies include FennoClean PFA, a more environmentally sound process chemical, and the FennoRez and Fen-noBond strength technologies, which produce maximum wet and dry strength.


AT YOUR SERVICE

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“We are growing strongly in the tissue paper market, and its future prospects are promising,” says clay campbell, Senior Manager, Global Business & Application Development.

Over recent years, Kemira has increased its investment in the tissue paper sector in four strategic areas: NAFTA, EMEA, APAC and South America. At first, the company focused on North America, where the annual growth rate has been 20 percent for the last two years. In EMEA countries, sales grew by 20 percent year-on-year in the first quarter of 2013.

“Since last year, we have also been focusing on APAC counties, particularly China, where our strength and crêping technologies have been highly successful. In the second quarter of 2013, we will launch new production in the tissue paper sector in South America, where we will be focusing on Brazil,” says Campbell.

Naming the market hot spot is easy for him.“China, China, China. During the present four-

year period, 140 tissue paper machines will be built in China. The period runs until 2015.”

Tissue paper continues to be one of the fastest-growing segments of the pulp and paper market. Its average annual growth rate is expected to be 4.3 percent globally. In 2013, total tissue paper consumption will be more than 35 million tons.

“That is more than the annual consumption of newsprint,” Campbell points out.

Asia is predicted to represent 53 percent of the increase in tissue paper consumption until 2025, with China constituting 40 percent of the total growth. In 2011, tissue paper consump-tion in China increased by 12.5 percent, with the GDP growth rate being 8 percent. In 2013, tissue paper consumption in China is expected to grow by 10–11 percent. Growth will be strong in Brazil as well, about 7 percent.

“We have strong special expertise in water qual-ity and quantity management and fiber chemis-try. We offer a full range of products that create

added value in our customers’ processes. It could even be said that tissue paper cannot be made without water and Kemira,” says Campbell.

Kemira’s approach to tissue paper manu-facturing is Grade Specific Process Optimiza-tion, which is based on an understanding of the customer’s grade-specific needs. Optimization includes crêping control and wet-end manage-ment as well as fiber and water quality manage-ment. Kemira makes use of efficient diagnos-tics, monitoring and control in improving overall production efficiency and sheet properties.

“In wet-end optimization, for example, it is crucial to understand how process chemicals affect machine efficiency and paper properties,” says Campbell.

In addition, it is important to understand how different types of fiber as well as process chem-istry, such as process charge, conductivity and sulfites, may affect the efficiency of the func-tional chemical used in the production process.

The development of a new performic acid (PFA), a more environmentally sound biocide, and the creation of the chlorine-free FennoClean PFA program have been significant innovations on the way to cleaner and more efficient process technology. “These innovations set new stand-ards for sustainable solutions. We have proved that it is possible to combine the highest level of performance with sustainable development,” says mats berg, Director, Global Business & Application Development.

The PFA is a fully biodegradable product, with its breakdown products being water and car-bon dioxide. The end product and process water do not contain harmful residues of AOX com-pounds.

“The PFA has been very well received among our customers. Experience has already shown that it significantly improves machine produc-tivity and makes processes cleaner. The PFA is much more than just a biocide program. It also increases the useful life of paper machine felt by 50 percent,” says Berg.

Environmen-tal and corporate responsibility goals are driving the tis-sue paper industry toward a cleaner future.

FennoClean PFA is a technol-ogy for microbe prevention in tissue paper machines. Its effect is based on performic acid.

Performic acid is halogen-free and fully biodegrada-ble. It does not release harmful AOX compounds to the environ-ment.

FennoClean PFA keeps paper machines clean and end prod-ucts hygienic with no biocides.

Many tis-sue paper mills using primary fiber are already using FennoClean PFA.

5FACTS

THE PFA is a more environmentally sound bioc-ide used in paper machines. This highly effec-tive disinfectant is a reaction product of formic acid and hydrogen peroxide. Its biocide activ-

ity is based on active oxygen. The PFA does not cause corrosion and is halogen-free and fully biodegradable. The end product has no bioc-ide residues.

Paper is a growth and investment sector

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The future of tissue paper and innovations related to its pro-duction were showcased at Tissue World in Barcelona in March.

“The event was a huge success for Kemira. Interest among customers exceeded even our most optimistic expectations. Our message was clear: Kemira is strongly committed to the paper industry, and the tissue paper sector is an important area of growth and investment for us,” says Roberto Zulian, Manager, Tissue, EMEA, Kemira.

Kemira’s strong investment in research and development, new technologies and expertise has already helped the com-pany stand out from the competition. While many competitors are reconsidering their presence and investments in the paper industry, Kemira has gained a foothold as one of the most important operators in tissue paper industry chemicals.

In Barcelona, Kemira strengthened its position as a preferred chemical supplier among tissue paper customers. “We empha-sized our strong expertise in process efficiency and our wet-end applications. In line with our strategy, we showcased our inno-vative technologies that help us differentiate from our competi-tors and grow faster,” says Zulian.

FennoClean PFA and Kemira’s innovative strength technol-ogies prove that the efficiency of tissue paper production can be improved. “Manufacturers are facing severe price pressures, and our model to improve productivity while reducing over-all costs has been met with positive responses. We help tissue paper manufacturers innovate and continually improve their efficiency.”

Although the tissue paper sector is growing steadily, the number of major chemical suppliers in the field is decreasing. “We believe that the tissue paper sector is a profitable invest-ment—now and in the future,” says Zulian.


AGENDA

2 4 • W A T E R L I N K 1 • 2 0 1 3

After a five-month selection proce-dure, 30 participants were selected for the 2013 Millennium Youth Camp. In its third year, the event attracted more than 1600 applicants from more than 100 countries.

Kemira has contributed to the creation of the event all the way from the idea stage. MYCamp will take place in the Helsinki area on June 9 to 15. During the week, the participants will visit the Uni-versity of Helsinki and Aalto University

and participate in the prestigious Mil-lennium Technology Prize gala. They will also get a chance to meet the Technology Prize finalists.

The water team in the 2013 MYCamp has an exciting geographical makeup: two participants come from Africa, one from Australia, one from Canada, one from Thailand and one—the only boy this time—from Romania. In the last stage of the selection procedure, the applicants prepared project plans about

micropollutants in water systems.On June 12, the team will visit Kemi-

ra’s R&D Center in Espoo, where they will be instructed by professors tuula tuhkanen from the Tampere University of Technology and olli varis from Aalto University, supported by Dr. tatjana karpova and ilkka pollari, Director, IP Management, who is the chairman for the water team, among other Kemi-ra’s scientists.

MYCamp attracted wide interest KEM

IRA


The year 2013 has been declared the International Year of Water Cooperation by the UN General Assembly. The ques-tions to be addressed include: Why do we need to cooperate? On what, for what aim, at what level, with whom and how should we cooperate?

Our interdependence is increasing every day. With the world population expected to exceed 9 billion by 2050, we will be depending on the same finite and vulnerable water resources as today for sustaining life and well-being.

We need to understand how our water use affects other people’s water use and enter into meaningful and informed dia-logues with other people and commu-nities who are using, wasting or pol-luting our common and shared water resources. To create an environment that facilitates cooperation, we also need to understand how to identify and measure the quality, aim and benefits of coopera-tion and how to overcome obstacles.

In the following, the thematic scope of the 2013 World Water Week is formu-lated from the perspective of the “what” and “who” questions. However, in devel-oping the workshops, seminars and other events, the focus must be on the “how” questions. Perspectives for build-ing partnerships, advancing future water cooperation and finding solutions to the world’s water-related challenges will be explored.

Cooperation between different sectors is essential for proper water development and management, and water managers need to work closely with most sectors of society. Water as an important driver of economic and social development needs to be addressed by people both inside and outside of the water box.

With the global focus on the green economy and the challenge of meet-ing the increasing food and energy demands, the need to address water, energy and food security as a particu-larly important nexus has been high-lighted. This calls for increased cooper-ation between these fields, with an eco-system services perspective, sharing water benefits, costs and risks and coop-erating with the stakeholders concerned.

Access to safe drinking water and sani-tation has been recognised as a human right by the UN. For all other uses gov-ernment has a responsibility to ensure the optimum allocation and manage-ment of the water resource for the whole of society. This calls for the involve-ment of all relevant stakeholder groups, and for getting central and local govern-ments, civil society organisations, pri-vate sector, academia and practitioners to the same table.

In this process, the involvement of civil society organizations and the gen-eral public is not only a question of information. Transparency and inclu-

siveness in decision-making require early identification, consultation and the involvement of those who share the ben-efits, who lose, who bear the costs and who run the risks.

It is important to recognize that coop-eration needs to involve all people and cultures, ensure gender equality, work with and build on youth as the foun-dation of our future and respect cul-tural values while bridging to ethnic and tribal groups.

The private sector is an increasingly important stakeholder group for effec-tive water development and manage-ment. This includes large and small enterprises for which water-efficient production and reliable access to water are important in the face of the chal-lenges of increased water scarcity.

All of these communities address water as a vital resource for society, but they often live separate lives without much communication between them. Bridging these management divides is a major water cooperation challenge in achieving coherence in policies and practices.

The article is based on the thematic scope of the 2013 World Water Week in Stock-holm. The theme of the week is ”Water Cooperation – Building Partnerships.” The event is organised by the Stockholm International Water Institute (SIWI).

MYCAMP is a networking event for talented youth (16 to 19 years) within five fields of interest: climate change, renewable energy and resources, water, applied mathematics and ICT. Orga-

nized by the Technology Academy of Finland and the University of Helsinki, the camp will take place on June 9 to 15.

WATER COOPERATION CALLING

World Water Week 2013 in Stockholm is all about building partnerships and advance future water cooperation and finding solutions to the world’s water related challenges.

EUREKA!

2 6 • W A T E R L I N K 1 • 2 0 1 3


IN Kemira’s KemiCond method, sludge is first treated with sulfuric acid and then with hydro-gen peroxide. The gel-like structure of sludge is

then broken up, which means that the sludge can be dewatered to a higher dry solids content. The treatment also reduces odors and hygienizes the

sludge. Sludge treated with KemiCond can be used as a soil conditioner as it is or composted.

Plants can utilize the phosphorus in wastewater sludge treated with the KemiCond and ferric-coagulation meth-ods even more efficiently than they can make use of solu-ble mineral fertilizers. This information is based on initial research results from MTT Agrifood Research Finland.

A study supervised by Principal Research Scientist helena kahiluoto (left) at MTT examined how effec-tively plants use and store phosphorus from various organic sources, such as manure and wastewater sludge.

Phosphorus utilization was tested on Italian ryegrass and flax. The researchers sowed the plants and determined their phosphorus content.

The comparative study used wastewater sludge treated in various ways as well as digested, composted and untreated manure. These were compared with mineral fertilizers and unfertilized soil.

The study included pot experiments in a growth chamber as well as a two-year field experiment, which is still in pro-gress.

Kemira supplied the project with ferric-coagulated wastewater sludge samples that had been treated by means of the KemiCond method, digestion, composting, lime sta-bilization and ammonia hygienization. The samples were mixed in the sandy soil used as the substrate.

According to a recent study, plants can effectively utilize the phosphorus in sludge from

wastewater treatment plants.T E X T P I R K K O K O I V U · P H O T O S A N T T I V E T T E N R A N T A

Ef f ic ient phosphorus

RECYCLING

2 8 • W A T E R L I N K 2 • 2 0 1 2

EUREKA!

The field experiment is halfway through, but the final results of the pot experiment will soon be available.

According to Kahiluoto, treated sludge and other organic sources of phosphorus gave good results: the plants were able to utilize the phosphorus even more efficiently than they can use mineral fertilizers.

“In addition to composted wastewater sludge, the promising group of sources included sludge treated with KemiCond.”

The amount of iron seems to be key when using ferric-coagulated wastewater sludge. The effects of iron were studied by comparing sludge from wastewater treatment plants that use dif-ferent dosages of coagulants. Plants are able to utilize phosphorus efficiently even if the fer-ric coagulant dosage is at the level typically used in the Nothern Baltic area, which is higher than that in Central Europe.

Helena Kahiluoto has studied organic nutrient sources and nutrient recycling for a long time.

“I was not surprised by the results, even though the general belief still seems to be that plants are not able to utilize organic sources of phosphorus as efficiently as mineral fertilizers.”

Nutrients in organic soil conditioners have been thought to be less available and more slowly available for plants than those in mineral fertilizers.

“The results of our pot experiment do not sup-port this belief,” says Kahiluoto.

However, she points out that the pot experi-ment is only part of the results. The field experi-ment will provide more practical information.

“The results of the two-year field experiment will be interesting. The soil ecosystem serves as a buffer and contains interactions that are diffi-cult to predict. The pot experiment indicates the mechanisms involved more clearly.”

Senior Research Scientist outi grönfors (left), was responsible for project management at Kemira. She finds the initial results to be very interesting and is pleased with the way the study is producing profound information on how plants utilize phosphorus.

“It’s interesting to learn that wastewater sludge treated with the KemiCond method as well as ferric-coagulated wastewater sludge are highly available for plants”, says Grönfors.

“The initial results are encouraging in terms of using wastewater sludge as a phosphorus source.”

“Wastewater sludge should not be seen as waste, because it serves as a source of nutrient and organic matter essential for plant growth.”

When phosphorus becomes even more scarce, interest in recycling will increase. Phosphorus can be regarded as a strategically important raw material, as it is absolutely necessary in food pro-duction. Of the phosphorus used in Europe, 95 percent is imported. Phosphorus is extracted from phosphate rock, a non-renewable resource.

For all living organisms, phosphorus is an important building block. Phosphorus cycles in the food chain, and human and animal feces have high phosphorus content. Phosphorus emissions to water with wastewater and fertilizers cause eutrophication to a high degree.

According to Grönfors, the facts are in favor of phosphorus recycling.

“It’s fantastic that the phosphorus in wastewa-ter sludge can be recycled and reused virtually indefinitely.”

However, wastewater sludge must be treated appropriately to remove contaminants. “The sludge used as a fertilizer on fields must be safe and clean. The KemiCond treatment is used to disinfect the sludge and remove pathogens.”

Phosphorus is among the most important nutrients for plants. In addition, it is essential as animal feed in food production.

The global demand for phosphorus is increasing with population growth, the need for food and the use of fertilizers in agriculture.

Phospho-rus is extracted from phos-phate rock, a non-renewa-ble resource. Major phos-phorus depos-its are located in China, Morocco and the United States, among other coun-tries.

Human and animal feces have high phosphorus content.

4FACTS


Research results confirm that the commonly used ferric coag-ulation is a sustainable solu-tion for collecting phospho-rus from wastewater, says aija jantunen, General Man-ager, Municipal & Industrial, Kemira.

“The results speak in favor of considering ferric coagula-tion for manure in areas where more manure is produced than is needed.”

According to Jantunen, ear-lier studies carried out by Kemira have shown that plants can utilize iron-bound phos-phorus, even though it has low water solubility.

The study carried out by MTT included various types of fertilizers as well as organic byproducts used as fertilizers, which had been treated using a variety of methods.

“The results serve to refute popular beliefs. Iron-bound phosphorus will not wash away from fields with first rain. Instead, it will last until the end of the growing season.”

Ferric coagulation is a sustainable solution

WE PROUDLY PRESENT

3 0 • W A T E R L I N K 1 • 2 0 1 3

NEW TECHNOLOGYThis year, Kemira will launch a series of products that enable on-site measurement of residual scale inhibitor levels at oil and gas wells.T E X T R A N D E L W E L L S • P H O T O 1 2 3 R F

br ings laborator ies to o i l and gas wel ls


Mineral deposition is a major concern for the oil and gas industry. Mineral deposits can lead to severe disruptions in production and failure of safety-critical components. That is why control-ling the amount of scale inhibitor, such as Kem-Guard® 269, is critical for operators.

KemGuard targets barium sulfate scaling, which is the predominant scaling problem in offshore production. “If you allow that type of scale to build up, it can cost tens of millions of dollars to get the affected well back to normal production,” says james johnstone, Specialist, Oil & Gas.

Determining residual scale inhibitor levels is a costly and time-consuming undertaking. A typi-cal production platform has several wells feeding the process facility. To check residual inhibitor concentration, the well has to be isolated to col-lect the water sample. In a subsea installation, that means closing other wells feeding the pro-duction line.

Tagging allows well operators to identify a spe-cific chemical by the amount of the tag present, and thus effectively manage current and future treatment programs.

Using its advanced know-how in polymer synt-hesis, Kemira has upgraded KemGuard 269 with tagging technology that brings new, simplified and much needed inhibitor control for operators.

The phosphorus tag of KemGuard 2490 offers easy, reliable and cost-effective inhibitor detec-tion. KemGuard 2420 brings the added benefit of offshore testing with its fluorescent tagging.“Our ability to have several different tags on the same base chemistry is unique,” adds katarzyna

millan, Marketing Manager for Kemira Oil & Gas. “KemGuard 2490 and 2420 allow us to deploy the base inhibitor with different tags for a number of oilfield applications where detection in comingled waters is needed.”

Accurate onsite analysis is a game changer. Testing residual inhibitor levels typically requi-red several days, if not weeks, because it could only be done at offshore labs. The fluorescent tags of KemGuard 2420 can be tested on the platform within a matter of hours using a simple spectrofluorometer.

“Take a case like a well that has to be shut off for a few months, for whatever reason,” explains Johnstone. “When restarting that well, the level of inhibitor is unknown. If the only way to find out is through onshore analysis, that means they are potentially operating at high risk for weeks.”

Inhibitor tagging also gives customers more ope-rational flexibility. For instance, new discoveries can now be served using existing installations because operators can dose inhibitors preci-sely for each well, new and old. Onshore, scaling issues are arising as more water is being used.

“Hydraulic fracturing, for example, relies on the high pressure injection of inert particles [proppant] to create and hold open fractures,” explains Millan. “KemGuard can be used to pro-vide controlled protection from scaling in the formation through impregnation of the prop-pant with the tagged scale inhibitor.”

In the end, whatever the application, Kem-Guard is about allowing production people to do their job. Correct and timely management of scale inhibitors ensures that oil and gas keeps flowing.

THIS year, Kemira is launching this year two prod-ucts for the oil and gas sector. The KemGuard® tagged scale inhibitor product line allows for differ-entiation and detection of inhibitor levels in individ-

ual wells using the widely accepted, top-performing KemGuard® 269. The new technology is target-ing offshore wells where accurate, timely control of inhibitor concentrations is vital to maintain efficient

Mineral deposition or scaling in wells can cause safety concerns and severe disruptions to production.

Measur-ing the resid-ual level of scale inhibitor is a costly and time-consuming procedure.

KemGuard® 2490 and 2420 are tagged variants of the widely used KemGuard®269 scale inhibitor. Tagging is used to quickly and effectively determine the level of scale inhibitor in a given well.

KemGuard® tagged scale inhibitors can be used for both offshore and onshore oil and gas applications.

5FACTS

3 2 • W A T E R L I N K 1 • 2 0 1 3

WE PROUDLY PRESENT

3 2 • W A T E R L I N K 2 • 2 0 1 3

Fiber gives paper strength and printability. In the past, less fiber meant lower strength and poor printability.

KemForm is changing the equation. T E X T R A N D E L W E L L S • P H O T O K E M I R A

STRENGTH and qual i ty


Two trends continue to cause headaches for the paper industry: recycled water and reused fiber. Both are creating problems with the strength and quality of the end product. Traditional chemistries struggle in closed systems. Kem-Form, however, thrives.

It is a solution concept that uses Kemira’s Fennosil micropolymers, linear polymers and sil-ica or clay to create an application-specific solu-tion perfectly suited for the mill.

This year, KemForm is being relaunched with new silica that has smaller particle dimensions, making it work more effectively with the other new component, a new micropolymer. Com-bined, these upgrades bring even better perfor-mance to the concept.

“We are targeting productivity and the qual-ity of the customers end product,” says marco polverari, Sr Manager, Marketing, Paper.

“KemForm overcomes the limitations of cur-rent paper making technology for sheets with high ash or filler content,” he says. “Normally, adding more filler reduces the paper quality. With KemForm, less fiber is needed to maintain or increase paper quality.”

Typically, inorganic fillers, such as clay and cal-cium carbonates, are large particles that do not penetrate the organic fiber matrix of the paper

well. KemForm allows the filler particles to be incorporated into the fiber matrix more thor-oughly and evenly throughout the sheet.

In the board industry, KemForm is used pri-marily for improving strength and board sheet formation, allowing better bending and folding of the consumer product package.

In the paper industry, speed and quality are the key factors. Productivity gains come from the improved dewatering of the sheets with KemForm, allowing the paper machines to run faster.

“When the fiber layout in the paper sheet is optimized, we get better dewatering,” explains Polverari. “This reduces the amount of water needed to produce each ton of paper.”

More and more paper mills are closing their water cycle. Combined with recycled fiber, these closed systems experience high levels of con-tamination. Under these conditions, traditional chemistries no longer work. KemForm, on the other hand, performs like a charm.

It has been developed on the back of Kemi-ra’s decades of hands-on experience in paper and board production. “Here we have a concept that caters specifically to the needs of our paper and board customers,” ends Polverari.

KemForm allows papermakers to add value for their customers through better sheet surface properties and printability.

By using KemForm, paper mills can reach a sheet ash con-tent of 35% without lower-ing strength or printability.

KemForm not only improves machine effi-ciency, but also improves end-product properties.

3FACTS

KEMFORM overcomes the challenges faced by the paper and board industry when recycling fiber and water. For printing paper grades, KemForm allows higher filler content while delivering better strength

and printability. For board production, where recy-cled fiber is becoming the norm, it maintains board strength and improves formation qualities.

3 4 • W A T E R L I N K 1 • 2 0 1 3

NUMEROLOGY

On April 23, Kemira published its first-quarter numbers and presented its sharpened strat-egy, From Redesign to Expansion.

In the results release, Kemira kept its 2013 outlook unchanged, expecting its revenue in local currencies and excluding divestments to be 0–5% higher and its operative EBIT to be more than 15% higher than in 2012.

The first-quarter results were pretty much in line with analyst expectations. Kemira’s revenue increased by 1% to EUR 560.9 mil-lion, with an organic growth of 3%. Its opera-tive EBIT increased by 9% to EUR 42.2 million (38.6), with a margin of 7.5% (7.0%).

Sales volume growth and cost savings gen-erated by the Fit for Growth restructuring program were the main drivers of improved profitability. In the first quarter of 2013, the program resulted in EUR 9 million in cost sav-ings compared to the targeted EUR 15 million full quarterly run rate. The restructuring pro-gram proceeded as planned and, as has been communicated before, its ultimate goal is to achieve an EBIT margin of 10% in 2014.

Kemira also announced new financial tar-gets for 2016:

- Revenue EUR 2.6–2.7 billion- EBITDA margin: 15%- Gearing: <60%In conjunction with the new financial tar-

gets, Kemira presented its sharpened strategy. By the end of 2020, Kemira aims to become the industry and technology leader in its cho-sen target markets. The strategy was sharp-ened in four key areas: business focus, growth, geographical focus and innovation. Read more about the strategic choices at www.kemira.com/about-us/strategy.

Continuous efficiency improvement will remain key for successful strategy implemen-tation. On April 23, additional cost-saving measures were initiated. Kemira is planning to establish a multifunction business service center in Gdansk in Poland, with an expected annual savings impact of close to EUR 10 mil-lion. Kemira is also planning to close a pro-cess chemical site in Vaasa in Finland, with an expected annual savings impact of EUR 5 mil-lion.

Kemira’s Capital Markets Day will be held in London on September 10, 2013. The event is intended for analysts, professional investors and financial media. Kemira’s management will give presentations and attend small group meetings. A link to a webcast of the event will be available at www.kemira.com.

Check out the investor section of Kemira’s revamped website at www.kemira.com/en/investors.

A webcast and a transcript of the first-quarter press and analyst conference is available at www.kemira.com/en/inves-tors > Financial information.

WHERE WATER MEETS CHEMISTRYTM PRESS RELEASES

JANUARY 2013

January 21 Kemira strengthens its global polymer product line, positioning for future growth.

FEBRUARY 2013

February 14 Kemira further increases its focus on water-intensive industries by selling its stake in Sachtleben to Rockwood.

February 28 Kemira publishes its annual and sustainability reports for 2012.

MARCH 2013

March 1 Kemira comp-letes the divestment of its ChemSolutions food and pharmaceutical businesses.

March 25 Kemira pub-lishes restated segment information for 2012 in accordance with its new organizational structure.

March 25 Kemira starts a new AKD emulsion line at its Helsingborg site in Sweden.

March 26 Kemira’s Annual General Meeting approves a dividend of EUR 0.53.

APRIL 2013

April 23 Kemira’s inte-rim report for January–March 2013: Improved profitability supported by organic growth.

April 23 Kemira sharpens its strategy in four key areas and publishes new financial targets for 2016.

April 23 Kemira plans to establish a multifunction Business Service Center in EMEA.

April 23 Kemira will start codetermination negotiations and transfer its production in Vaasa to other units.

Tero Huovinen is Kemira’s Director, Investor Relations, t. +358 (0)10 862 1980

FINANCIAL CALENDAR Nordic Small & Mid Cap Seminar, Stockholm June 17, 2013

Interim report: January-June 2013July 23, 201, at around 2.30 pm (CET+1) Kemira Capital Markets Day 2013, LondonSeptember 10, 2013

Interim report: January-September 2013 October 22, 2013

ALE

KSI

NIE

MEL

Ä


KEMIRA’S OUTLOOK FOR 2013 AND FINANCIAL TARGETS

KEY FIGURES

Revenue (local currencies and excl. divestments)

MEUR, except ratios 1-3/2013 1-3/2012

Revenue 560.9 552.9

Operative EBIT 42.2 38.6

Operative EBIT % 7.5 7.0

EPS (EUR) 0.17 0.19

CAPEX excl. acquisitions 29.0 19.4

Cash flow after investments 189.9 -8.1

Gearing, %, end of period 30 45

Equity ratio, %, end of period 50 51

Personnel, end of period 4,662 5,051

2013 2014 2016

0–5% growth vs. 2012

EUR 2.6–2.7 billion

increase 15% > 2012

15%

below 60%

10%

Operative EBIT

EBIT margin

Revenue

EBITDA margin

Gearing

100%

0%

2009 2010 2011 2012 2013

RECOMMENDATIONS ON KEMIRA SHARES

Q2Q1Q3 Q4 Q1 Q3Q2 Q4 Q1 Q1Q3 Q3Q2 Q2Q4 Q4

Buy

Hold

Sell

SHARE PRICE VS INDEX

OWNERSHIP Oras Invest Oy 18.2% Solidium Oy 16.7% Varma 7.4% Ilmarinen 2.7% Other Finnish inst. 18.0%

KEMIRA GROUP REVENUE EUR MILLION

Q112 Q212 Q312 Q412 Q113

580

560

540

520

500

480

460

OPERATIVE EBIT EUR MILLION

Q112 Q212 Q312 Q412 Q113

50

45

40

35

30

25

20

Non-Finnish owners, incl. nominee-registered 19.6% Households 15.3% Kemira 2.1%

January 2011 May 2013

120

100

80

60

Kemira OMX Helsinki

3 6 • W A T E R L I N K 1 • 2 0 1 3

NUMEROLOGY

ANALYST ESTIMATES POST Q1 2011–Q1 2013

Revenue FY 2013 2014 2015 Operative EBIT=% 2013 2014 2015

Disclaimer: The data in the graph has been issued by Vara Research GmbH for information purposes only and is not intended to constitute investment advice. It is based on estimates and forecasts of various analysts regarding revenues, earnings and business developments of the relevant company. The company did not participate in the compilation of the estimates, and it does not endorse them. Such estimates and forecasts cannot be independently verified by reason of their subjective character. Vara Research GmbH gives no guarantee , representation or warranty and is not responsible or liable for their accuracy and completeness.

4/12 5/12 7/12 8/12 10/12 11/12 1/13 3/13 4/13 5/13

2,5002,4502,4002,3502,3002,2502,2002,1502,100

4/12 5/12 7/12 8/12 10/12 11/12 1/13 3/13 4/13 5/13

10.0%

9.0%

8.0%

7.0%

6.0%

KEMIRA SHAREHOLDER TREND 2011–2013

KEMIRA CREATING SHAREHOLDER VALUESUBSTANTIAL EARNINGS IMPROVEMENT POTENTIAL

ORGANIC GROWTH STRONG BALANCE SHEET

• Fit for Growth program• New organization fosters growth in high-margin business• Strict cash flow management

• Leverage mature markets with existing strengths • Well-established position in the US oil and gas markets, particularly in shale gas• Packaging, board and tissue paper driving growth in Asia

• Excellent funding position• Relevant financial assets• M&A possible also in the short term, if all profitability and synergy criteria are met

• Strong focus on improving shareholder returns• Stable dividend yield

January 2011 May 2013

50%

40%

30%

20%

10%

Oras Invest and Solidium Varma and Ilmarinen Other Finnish shareholders Non-Finnish shareholders

POREITA


Dr. Peter Morgan has been named the 2013 Stockholm Water Prize Laureate for his work to protect the health and lives of millions of peo-ple through improved sanitation and water technologies.

Over the past four decades, he has invented and advanced low-cost practical solu-tions to provide access to safe sanitation and clean water that are being used by millions of people worldwide.

“Many currently exist-ing solutions to provide clean water and san-itation are unafforda-ble, impractical and out of reach for the world’s poorest people,” said the Stockholm Water Prize Committee in its citation. “As a result of Dr. Morgan’s pioneering work to develop practi-cal water and sanitation technologies for those most in need, countless communities now enjoy safer water, a cleaner environment and quality of life.”

FIND ALSO

• H.MKingCarlXVIGustafofSwedenwillpresenttheprizetoDr.MorganataRoyalAwardCer-emonyduringthe2013WorldWaterWeekinStockholmonSeptember5.

• Moreaboutthe2013StockholmWaterPrizeatsiwi.org/prize

Antiscalants are organic compounds that effi-ciently prevent scale formation. Calcium carbon-ate, calcium sulfate, barium sulfate and stron-tium sulfate accumulate on membranes in water treatment, hindering filtration and increasing costs.

Kemira has introduced KemGuard 5835 and KemGuard 5836, new antiscalants for reverse osmosis and nanomembrane filtration.

“The new products are based on existing chem-istry, but we have optimized them for membrane-based systems,” says sangeeta dixit, Product

and Marketing Manager, Municipal & Industrial, Kemira.

The new products are intended for desalination in industrial and drinking water treatment.

“Their neutral pH value and low viscosity make them easy to use and dose. Acid is not required, which improves safety,” says Dixit.

Antiscalants optimize plant recovery, allowing longer cleaning intervals and reducing downtime and costs.

helen moster

And the winner is...

New, safer antiscalants

KEM

IRA

KEMFORM overcomes the challenges faced by the paper and board industry when recycling fiber and water. For printing paper grades, KemForm allows higher filler content while delivering better strength

and printability. For board production where recy-cled fiber is becoming the norm, it maintains board strength and improves formation qualities.

AVEC

3 8 • W A T E R L I N K 1 • 2 0 1 3

A successful company continually develops its competences and ways of working.

Mistakes and successes are major learning opportunities, says Raisa Jyrkinen.

T E X T A N N A V Ä R E ∧ P H O T O S A N T T I V E T T E N R A N T A

Toward common

GOALSHow to interest a child in studying? How to kindle a desire to learn in an expert? raisa jyrkinen, Vice President, Talent Development, believes that both children and adults learn best by doing. Children are driven by curiosity. Adults want to apply their knowledge in prac-tice and create something new and real.

“Here at Kemira, we have clearly defined common goals. For us, flexibility means an ability to rapidly respond to changes in the mar-ket and within the company. Our people are highly committed to their work and customers, and we enjoy working together,” says Jyrkinen.

She joined Kemira in 2007. Over the years, competence develop-ment has become a more and more integral part of the company’s strategy.

“The most challenging and rewarding part of my job is to create solutions that work for people with various cultural and professional backgrounds.”

AVEC

4 0 • W A T E R L I N K 1 • 2 0 1 3

“We want to eliminate silos and bring people together. New ideas emerge when everyone contributes.”

Jyrkinen has studied learning from many perspec-tives.

In the 1990s, she studied educational sciences at the University of Joensuu, completing part of her degree as an exchange student in Spain and Great Britain. She graduated as a teacher in 1996 and taught comprehensive school for five years before being hired by IBM for learning and change manage-ment consultancy.

Her job with a global company involved a great deal of traveling and international projects. Jyrkinen became familiar with the world of international busi-ness and communication. In 2007, she became head of talent development at Kemira’s Pulp & Paper busi-ness unit.

“The new job offered fascinating new challenges, as chemistry was never one of my strong points at school. However, as a consultant, I had worked in many forest industry projects.”

Jyrkinen finds her job to be meaningful and reward-ing, particularly because Human Resources is a natu-ral and integral part of business operations at Kemira, instead of merely being a support function. Human Resources is also represented in the Management Board.

Clearly defined roles, responsibilities and goals con-stituted one of the key areas of the organizational change at Kemira in 2012. “We wanted to give all employees the opportunity and responsibility of thinking about how they could continually improve their ways of working as part of the workplace com-munity.”

Regular one-on-one target setting and devel-opment discussions play an important role in this respect. This year, the process will already cover 98 percent of all employees in an expert role. The goal is to expand the process to cover 95 percent of all employees by 2015. Kemira has a total of about 4,600 employees in 40 countries.

In a company of thousands of employees, collab-oration and common ways of working are impor-tant areas for development. Kemira has established groups that invite people to solve problems together.

“We want to eliminate silos and bring people together. Entirely new ideas emerge when every-one contributes. People have been enthusiastic about these collaboration opportunities.”

Leadership development is another important aspect of strategy implementation.

Favourite relax and recharge?Exercise and nature are important to me. My hob-bies include ski-ing, hiking and going to the gym.

You love traveling. Favorite destinations? I love the Alps, and my favorite cities are Berlin and New York. In the summer, nothing beats our summer place in Puumala.

What type of music do you to listen to?I love female singers with incredible voices and meaningful songs. Adele and Jenni Vartiainen are two of my favorites

Which books have touched you?Paolo Coelho’s and Gabriel García Márquez’s works offer deep wisdom, peace and profound perspectives.

4DROPS

“We want to become known for good leadership. Leadership is largely about self-knowledge. Good managers are aware of their strengths and develop-ment needs and are able to learn from their mistakes. Learning from successes as well as mistakes is one of our leading principles. You cannot create anything new without taking risks,” says Jyrkinen

Leadership development includes continuous eval-uation, training and personal development plans. Training at Kemira also covers global team leader-ship, including cultural and personality differences. Methods include the Myers-Briggs Type Indicator (MBTI), which helps people identify and understand diversity and apply this understanding to communi-cation situations.

“All cultures have their norms, which affect how people see and value independence, communality, position, status and other factors. We always respect local practices, but our work as a community is guided by Kemira’s strategy and values.”

Among other practical issues, time differences pre-sent challenges in an international company. Many employees in Europe start their working day with a virtual meeting with Asian colleagues and end it with a discussion with American colleagues. In addition, the work includes traveling.

Over the recent years, Kemira has fine-tuned its virtual conferencing technologies to reduce busi-ness travel. However, communicating major changes requires face-to-face interaction.

Present challenges include communicating the sharpened strategy globally and consistently. Kemira has trained 20 internal strategy ambassadors, who help convey and implement the new strategy locally.

Jyrkinen sees no major signs of the much-discussed labor shortage.

“Chemistry and other natural sciences are global fields in terms of expertise. Local labor shortages are possible in the future, particularly in China and South America. However, Kemira is an internation-ally attractive employer. We have a low level of hier-archy, which means excellent career opportunities even for recent graduates.”

In addition, Kemira’s strengths include sustainable products and environmentally considerate produc-tion. According to Jyrkinen, customers increasingly value responsibly manufactured products.

“Experts and other operators in the field place high priority on sustainable development and efficient water and energy use.”


COMPANIONS

4 2 • W A T E R L I N K 1 • 2 0 1 3

PÄIVI JOKINEN Kemira joined the WBCSD in 2010. The WBCSD’s Vision 2050 program aims to create sustaina-ble living conditions for a world of nine billion people by the middle of this century. Water is integral to well-being, which is why the council has a dedicated water program, promoting water reuse across industries. In the summer of 2012, we invited water experts to Finland to discuss oppor-tunities for innovation. As a result of this two-day work-shop, we launched the Water Reuse project, which is man-aged by Kemira in collaboration with the WBCSD and the International Water Association (IWA).

Many of the largest companies in the world are participat-ing in the project, including Shell, Veolia Water, Coca-Cola and UPM. Collaboration with these companies helps us broaden our water expertise. Kemira’s role is to steer the work toward practical measures for improving water reuse.

Next, we intend to launch pilot projects. I have suggested a project in China, where the need for water is immense. In northern China, access to water is already presenting prob-lems, as water is in short supply and most of the ground-water is polluted. Some industrial companies are being forced to relocate because of water shortages. Recycling water between industrial companies and between industry, agriculture and municipalities would create better operat-ing conditions for all.

Reuse helps save resources JOPPE CRAMWINCKEL According to current estimates, as much as 80 percent of used water is returned to nature untreated. With the global need for water constantly increasing, we must find more efficient ways to reuse waste-water. The WBCSD works to improve awareness of water reuse among companies, organizations and other operators. We are compiling research information and best practices and making them available on our website. Our goal is to offer innovative solutions for sustainable water reuse in and between industry, agriculture and municipalities.

So far, water reuse across traditional sector boundaries has presented difficulties in practice, particularly between industry and agriculture. However, companies would be able to make better use of their investments in wastewater treatment if they shared the water with other operators.

We already have examples of successful water management solutions between companies. The construction materi-als company Cemex was looking for new water acquisi-tion methods for its Colombia plant because of increasing water prices and polluted reserves. It decided to cooperate with the nearby food industry company Meals de Colom-bia, using treated wastewater from the company in its pro-cesses. This enabled Cemex to increase its water acquisi-tion by nearly 30 percent at a cost equaling only 20 per-cent of the cost of municipal water acquisition.

Water reuse offers a great deal of untapped potential. Instead of returning treated water to nature, water could be recycled between industries. Agriculture and municipalities should also be included in water reuse across sectors.T E X T H E L E N M O S T E R • P H O T O S D A V I D L I N T O N A N D K E M I R A


WITH close to 200 member companies, the World Business Council for Sustainable Development (WBCSD) is an organization that galvanizes the global business community to create a sustainable

future for business, society and the environment. Its Vision 2050 program calls for a new agenda for busi-ness, laying out a pathway to a world in which nine billion people can live well and within the planet’s

resources. Its Water Project seeks to ensure good management of water resources and provide solu-tions to water challenges faced by businesses, peo-ple and ecosystems.

Päivi is head of Kemira’s global Think Tank. Think Tank, which aims to find new business opportu-nities related to water quality and quantity management, particu-larly in emerging mar-kets. Päivi is responsible for Kemira’s collaboration with the WBCSD on the Water Project.

Joppe joined the WBCSD in 2010 to lead the expan-sion of its Water Program. This included the estab-lishment of a leadership group of 26 member com-panies to steer the Water Program. Under his lead-ership, a work program focusing on stewardship, water value, energy, food and water linkages, access to water and sanitation and water reuse has been

developed and is currently being implemented.

E3 helps save energy 135 improvements in 2012 p. 8

Sustainability 2.0It starts from the product p. 8

Managing talent Raisa Jyrkinen knows how p. 38

In this issue ...

”Where water meets chemistry” is the essence of Kemira’s sharpened strategy. Read all about it on page 12.

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