Botnia 2008 Annual Report
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Annual Report for Metsa Botnia, Finland (2008). Text by Ad Hoc Communications.
Transcript of Botnia 2008 Annual Report
1
Annual Report
2
Oy Metsä-BOtniA AB
OY METSÄ-BOTNIA AB 02–09pages
PROCESSES 10–21pages
>12 MANAGEMENT >14 CUSTOMERSHIP >18 SOURCING AND OPERATIONS
RESPONSILIBITY 22–43pages
>24 CORPORATE RESPONSIBILITY >28 HUMAN RESOURCES >32 ENVIRONMENT
CORPORATE GOVERNANCE
pages
>44 CORPORATE GOVERNANCE >45 MANAGEMENT GROUP >46 OY METSÄ-BOTNIA AB’S BOARD OF DIRECTORS
FINANCIAL REVIEW
>50 REPORT OF THE BOARD OF DIRECTORS >54 FINANCIAL REVIEW
pages
>2 OY METSÄ-BOTNIA AB >4 KEY FIGURES OF THE GROUP >6 BOTNIA’S YEAR IN BRIEF >8 REVIEW BY THE PRESIDENT AND CEO
48–9244–47
Oy Metsä-Botnia Ab
Botnia is among the world’s top producers of chemical pulp and has a broad portfolio to offer its customers who make high-quality paper, packaging, and tissue products. Our aim is to be the world’s leading producer of fibre, fibre characteristics, and value-added services. Our company is part of the Metsäliitto Group, whose core business is forest products. Our shareholders are Metsäliitto Group (53%) and UPM-Kymmene Corporation (47%). When operating at full capacity, we produce 3.5 million tonnes of bleached softwood and hardwood pulps. Two-thirds of our production is sold to the paper mills of our shareholders. One-third is sold to the market, mainly to customers in Europe and Asia. Our basic products are valuable: they have a growing market, are sustainable and renewable, are produced in an environmentally sound manner, and they are utilized by a strong and diverse customer base.
2
Oy Metsä-BOtniA AB
OY METSÄ-BOTNIA AB 02–09pages
PROCESSES 10–21pages
>12 MANAGEMENT >14 CUSTOMERSHIP >18 SOURCING AND OPERATIONS
RESPONSILIBITY 22–43pages
>24 CORPORATE RESPONSIBILITY >28 HUMAN RESOURCES >32 ENVIRONMENT
CORPORATE GOVERNANCE
pages
>44 CORPORATE GOVERNANCE >45 MANAGEMENT GROUP >46 OY METSÄ-BOTNIA AB’S BOARD OF DIRECTORS
FINANCIAL REVIEW
>50 REPORT OF THE BOARD OF DIRECTORS >54 FINANCIAL REVIEW
pages
>2 OY METSÄ-BOTNIA AB >4 KEY FIGURES OF THE GROUP >6 BOTNIA’S YEAR IN BRIEF >8 REVIEW BY THE PRESIDENT AND CEO
48–9244–47
Oy Metsä-Botnia Ab
Botnia is among the world’s top producers of chemical pulp and has a broad portfolio to offer its customers who make high-quality paper, packaging, and tissue products. Our aim is to be the world’s leading producer of fibre, fibre characteristics, and value-added services. Our company is part of the Metsäliitto Group, whose core business is forest products. Our shareholders are Metsäliitto Group (53%) and UPM-Kymmene Corporation (47%). When operating at full capacity, we produce 3.5 million tonnes of bleached softwood and hardwood pulps. Two-thirds of our production is sold to the paper mills of our shareholders. One-third is sold to the market, mainly to customers in Europe and Asia. Our basic products are valuable: they have a growing market, are sustainable and renewable, are produced in an environmentally sound manner, and they are utilized by a strong and diverse customer base.
2 3
Oy Metsä-BOtniA AB Oy Metsä-BOtniA AB
Green and renewable
Concern over greenhouse gases and global warming has brought the pulp industry to the forefront as a major producer/consumer of renewable energy. the logs and chips that we take into our production process are approxi-mately 50% cellulose fibres. Much of the remainder is lignin, an en-ergy-rich substance that binds the fibres together. Our production process separates the fibres and burns the lignin in the recovery boiler. the steam is then used to generate green electricity. Fossil fuel use is confined to start-ups, process disturbances, and the lime reburning process. even here, we are making investments and trying to find new ways to reduce the amount of purchased fossil fuel . For example, our Rauma mill sells tall oil (a by- product from our pulp production process) to a nearby refinery and receives in return pitch from the refinery. the pitch is burned in our lime kiln as a replacement for fossil fuel.
Modern logistics
to the customer, the most impor-tant part of Botnia’s supply chain is the delivery of an agreed quan-tity of pulp, at the agreed quality, and at the agreed time. Botnia uses its own logistics planning and reporting system to manage its sizable flows of raw materi-als and products. the distribu-tion chain minimizes intermedi-ate storage points and utilizes an extensive range of transportation options: river barges, ocean ves-sels, coastal vessels, railways, and trucks.
Customer partnerships
each customer has a team of Botnia specialists responsible for managing and developing the relationship. technical customer service, as part of this team, is an important link between customer and Botnia. Customer service engineers bring their own exper-tise to the customer’s process and help customers find the best pos-sible pulp for their end product. in a spirit of true collaboration, the aim is to develop the technical fibre characteristics in addition to operating an efficient, yet flexible, logistics chain.
Green and renewable Modern logistics Customer partnerships
Efficient production
We earned our position as one of the most efficient pulp manu-facturers in scandinavia through continuous investments in innova-tive technologies and operational policies, as well as in our people. the total combined production capacity of our mills is 3.5 mil-lion tonnes per year of elemental Chlorine Free (eCF) bleached pulp. When it comes to environ-mental performance, Botnia mills are among the best in the world.
Developing fibre characteristics
Pulp is manufactured from vari-ous types of wood depending on the special properties required in the paper manufacturing proc-ess. in total, Botnia has a unique product range consisting of high-quality short-fibre and long-fibre pulps, from both northern and southern wood sources. successful development work is performed in close cooperation with customers: to obtain fibre characteristics that achieve the required characteristics for a specific end product.
Maximum energy recovery
Our pulp mills extract the maxi-mum value from wood fibres: taking the best part of the fibre for pulp production and using the rest for energy production. We utilize the heat that would be typically wasted by a standalone biomass boiler in our processes. We gen-erate more energy than we use, and we have an energy efficiency programme to continuously moni-tor and reduce our own energy consumption. the surplus green electricity produced in our mills is sold to industrial and other users. Heat and steam are sold to nearby integrated paper mills or to sur-rounding communities for district heating.
Developing fibre characteristics Efficient production Maximum energy recovery
2 3
Oy Metsä-BOtniA AB Oy Metsä-BOtniA AB
Green and renewable
Concern over greenhouse gases and global warming has brought the pulp industry to the forefront as a major producer/consumer of renewable energy. the logs and chips that we take into our production process are approxi-mately 50% cellulose fibres. Much of the remainder is lignin, an en-ergy-rich substance that binds the fibres together. Our production process separates the fibres and burns the lignin in the recovery boiler. the steam is then used to generate green electricity. Fossil fuel use is confined to start-ups, process disturbances, and the lime reburning process. even here, we are making investments and trying to find new ways to reduce the amount of purchased fossil fuel . For example, our Rauma mill sells tall oil (a by- product from our pulp production process) to a nearby refinery and receives in return pitch from the refinery. the pitch is burned in our lime kiln as a replacement for fossil fuel.
Modern logistics
to the customer, the most impor-tant part of Botnia’s supply chain is the delivery of an agreed quan-tity of pulp, at the agreed quality, and at the agreed time. Botnia uses its own logistics planning and reporting system to manage its sizable flows of raw materi-als and products. the distribu-tion chain minimizes intermedi-ate storage points and utilizes an extensive range of transportation options: river barges, ocean ves-sels, coastal vessels, railways, and trucks.
Customer partnerships
each customer has a team of Botnia specialists responsible for managing and developing the relationship. technical customer service, as part of this team, is an important link between customer and Botnia. Customer service engineers bring their own exper-tise to the customer’s process and help customers find the best pos-sible pulp for their end product. in a spirit of true collaboration, the aim is to develop the technical fibre characteristics in addition to operating an efficient, yet flexible, logistics chain.
Green and renewable Modern logistics Customer partnerships
Efficient production
We earned our position as one of the most efficient pulp manu-facturers in scandinavia through continuous investments in innova-tive technologies and operational policies, as well as in our people. the total combined production capacity of our mills is 3.5 mil-lion tonnes per year of elemental Chlorine Free (eCF) bleached pulp. When it comes to environ-mental performance, Botnia mills are among the best in the world.
Developing fibre characteristics
Pulp is manufactured from vari-ous types of wood depending on the special properties required in the paper manufacturing proc-ess. in total, Botnia has a unique product range consisting of high-quality short-fibre and long-fibre pulps, from both northern and southern wood sources. successful development work is performed in close cooperation with customers: to obtain fibre characteristics that achieve the required characteristics for a specific end product.
Maximum energy recovery
Our pulp mills extract the maxi-mum value from wood fibres: taking the best part of the fibre for pulp production and using the rest for energy production. We utilize the heat that would be typically wasted by a standalone biomass boiler in our processes. We gen-erate more energy than we use, and we have an energy efficiency programme to continuously moni-tor and reduce our own energy consumption. the surplus green electricity produced in our mills is sold to industrial and other users. Heat and steam are sold to nearby integrated paper mills or to sur-rounding communities for district heating.
Developing fibre characteristics Efficient production Maximum energy recovery
4 5
Key FiguRes OF tHe gROuP Key FiguRes OF tHe gROuP
Sales by market areas, euR M
2008 2007 Change %
Finland 796.7 813.8 -2.1 eu countries 457.2 299.2 52.8Other europe 90.1 95.0 -5.1Other countries 246.6 163.3 51.0total 1,590.7 1,371.3 16.0
0
50
100
150
200
250
Profit before extraordinary items EUR M
2004 2005 2006 2007 20080
200
400
600
800
1,000
1,200
1,400
1,600
Sales EUR M
2004 2005 2006 2007 2008
■ Pulp ■ Forestry■ Sawmill (mechanical) ■ Others
0
10
20
30
40
50
60
70
80
Equity ratio %
2004 2005 2006 2007 20080
5
10
15
ROCE %
2004 2005 2006 2007 2008
0
500
1,000
1,500
2,000
2,500
3,000
Pulp deliveries 1,000 tonnes
2004 2005 2006 2007 2008
■ Shareholders ■ Market pulp
0
100
200
300
400
500
600
0
10
20
30
40
50
60
2004 2005 2006 2007 2008
Sales %
InvestmentsEUR M %
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
-10
0
10
20
30
40
50
60
70
80
2004 2005 2006 2007 2008
■ Shareholders's equity■ Interest bearing liabilities
Net gearing %
Net gearingEUR M %
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Pulp production 1,000 tonnes
2004 2005 2006 2007 2008
Key figures of the group
2008 2007 2006 2005 2004
sales euR M 1,591 1,371 1,311 947 1,066
Change % 16 5 39 -11 6
exports % 50 41 42 37 40
eBitDA euR M 347 289 316 192 262
% 20 21 24 20 25
Operating profit euR M 209 186 212 80 142
% 12 14 16 8 13
Profit before extraordinary items euR M 176 173 202 80 135
Personnel at 31 Dec. 1,815 1,862 1,898 1,654 1,589
investments euR M 99 409 570 289 88
net liabilities / % of turnover % 35 36 20 8 -5
equity ratio % 63 61 66 72 73
net gearing % 37 37 20 6 -5
ROCe % 11 11 14 6 11
4 5
Key FiguRes OF tHe gROuP Key FiguRes OF tHe gROuP
Sales by market areas, euR M
2008 2007 Change %
Finland 796.7 813.8 -2.1 eu countries 457.2 299.2 52.8Other europe 90.1 95.0 -5.1Other countries 246.6 163.3 51.0total 1,590.7 1,371.3 16.0
0
50
100
150
200
250
Profit before extraordinary items EUR M
2004 2005 2006 2007 20080
200
400
600
800
1,000
1,200
1,400
1,600
Sales EUR M
2004 2005 2006 2007 2008
■ Pulp ■ Forestry■ Sawmill (mechanical) ■ Others
0
10
20
30
40
50
60
70
80
Equity ratio %
2004 2005 2006 2007 20080
5
10
15
ROCE %
2004 2005 2006 2007 2008
0
500
1,000
1,500
2,000
2,500
3,000
Pulp deliveries 1,000 tonnes
2004 2005 2006 2007 2008
■ Shareholders ■ Market pulp
0
100
200
300
400
500
600
0
10
20
30
40
50
60
2004 2005 2006 2007 2008
Sales %
InvestmentsEUR M %
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
-10
0
10
20
30
40
50
60
70
80
2004 2005 2006 2007 2008
■ Shareholders's equity■ Interest bearing liabilities
Net gearing %
Net gearingEUR M %
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Pulp production 1,000 tonnes
2004 2005 2006 2007 2008
Key figures of the group
2008 2007 2006 2005 2004
sales euR M 1,591 1,371 1,311 947 1,066
Change % 16 5 39 -11 6
exports % 50 41 42 37 40
eBitDA euR M 347 289 316 192 262
% 20 21 24 20 25
Operating profit euR M 209 186 212 80 142
% 12 14 16 8 13
Profit before extraordinary items euR M 176 173 202 80 135
Personnel at 31 Dec. 1,815 1,862 1,898 1,654 1,589
investments euR M 99 409 570 289 88
net liabilities / % of turnover % 35 36 20 8 -5
equity ratio % 63 61 66 72 73
net gearing % 37 37 20 6 -5
ROCe % 11 11 14 6 11
6 7
BOtniA’s yeAR in BRieF BOtniA’s yeAR in BRieF
JuLy August sePteMBeR OCtOBeR nOVeMBeR DeCeMBeR
1.9.Ilkka Hämälä started as new President and CEOilkka Hämälä was appointed President and CeO of Oy Metsä-Botnia Ab in April with the new role being effective as of 1 september. the company’s previ-ous President and CeO erkki Varis retired on 31 August 2008.
ilkka Hämälä obtained his M.sc. degree in engineering from Helsinki university of technology in 1986. He has since held ap-pointments with uPM and has held several posts within Botnia, most recently as senior Vice President with responsibility for pulp production and supply chain.
1.9.New management group announcedthe following persons form Botnia’s management group: ilkka Hämälä, President and CeO, timo Piilonen, Business Development, Ronald Beare, uruguay operations, Maarit Herranen, Human Resources, Ville Jaakonsalo, Finance, ismo nousiainen, Production and Jyrki yrjö-Koskinen, sales and Marketing.
2.9.Forestal Oriental issues corporate bondsForestal Oriental s.A., the for-estry company of Botnia in uruguay, received the approval of the Central Bank of uruguay regarding registration of its pro-gramme to issue corporate bonds for a nominal value of usD 100 million. the approval contains a first series emission under the programme for a nominal value of usD 35 million. through this programme, the company seeks to achieve a more efficient capital structure and be part in the devel-opment of local uruguayan long term investment instruments.
20.9. Forest industry opened doors in Rauma and JoutsenoAn open day was organised at Botnia Rauma mill together with Metsäliitto group wood procure-ment. Also, Joutseno mill opened its doors for the local citizens so they could see first-hand the mill processes and operations.
22.10.Javier Solari appointed Managing Director of Forestal OrientalJavier solari was appointed Managing Director of Forestal Oriental s.A as of november 1st, 2008. in his new role, Javier solari will be responsible for the overall management of Forestal Oriental operations and land base in uruguay.
23.10.Botnia announced market related downtime at its millsDue to weakening market condi-tions and growing pulp invento-ries Botnia announced to cur-tail production at its mills. the curtailments at Botnia’s Finnish mills cut the production with approximately 50,000 tons dur-ing the last quarter of 2008. in uruguay, Botnia’s Fray Bentos mill took downtime in order to cut the production with approximately 40,000 tons.
5.11. Botnia considering stopping production at Kaskinen millthe poor availability of wood raw material at prices that are competitive for the mills has led to production curtailments at Metsä-Botnia’s Finnish mills and eroded their profitability. the available supply of wood will not permit the mills to produce cost-competitively at full capacity in 2009. the company therefore con-siders a temporary shutdown of production at its mill at Kaskinen during the first quarter of 2009, or the closure of the mill. the com-pany commenced statutory coop-eration negotiations with the em-ployees accordingly.
13.11. Botnia recognized for quality excellenceBotnia participated in the qual-ity competition for large com-panies and business units held by excellence Finland (suomen Laatukeskus). Botnia was hon-oured with the “eFQM Recognised for excellence” recognition for its good operations and results. Botnia has been systematically developing its operations with an emphasis on long-term con-sistent quality management. Participation in quality competi-tion is a natural continuation of the development work.
27.11.Joutseno mill produced its 14th million ton of pulpthe 100-year-old Joutseno mill reached the production of 14 mil-lion tons.
1.12.Juha Mäntylä appointed Board memberJuha Mäntylä was appointed member of Botnia’s Board. He is group executive Vice President, Metsäliitto Wood supply.
12.12.Botnia granted a certificate of Energy Efficiency System (EES)Botnia was granted the certificate of energy efficiency system (ees) by inspecta. During 2008 approxi-mately 800 Botnia employees were trained in energy efficiency and the trainings will continue in 2009.
Botnia’s year in brief
JAnuARy FeBRuARy MARCH APRiL MAy June
15.1.More than 100,000 tonnes produced in Fray BentosAfter very successful start-up, the Fray Bentos mill exceeded 100,000 metric tonnes of produc-tion in January.
18.1.Joutseno mill’s 100th anniversarythe Joutseno mill was founded by a norwegian construction engi-neer Johan Christoffer Wiese in 1908, and started its operations in May 1909. At that time the ca-pacity of the mill was 6,000 tons unbleached pulp per year. today Joutseno mill produces annu-ally 645,000 tons of eCF bleached softwood pulp and is the world’s biggest producer of bleached softwood pulp with one produc-tion line.
29.1.Monitoring results showed that Fray Bentos complied with set targetsBotnia published the monitoring results for the first two months of operation. these results clearly showed that the mill is comply-ing with set targets and there are no noticeable changes in the sur-rounding environment.
30.4. Botnia and OSE signed an agreement to treat Fray Bentos wastewater Ose (the uruguayan waterworks) and Botnia signed an agreement to start the works required to treat the municipal wastewater of the city of Fray Bentos at the ef-fluent treatment plant of Botnia´s mill. With this agreement, the wastewater will be biologically treated at the sludge plant of the mill. this will remarkably reduce the total amount of organic mate-rial and nutrients discharged into the River uruguay.
28.5. Fray Bentos bio-energy approved in UN’s climate change protocolthe Botnia Fray Bentos pulp mill power plant generates electricity from biomass, i.e. from dissolved wood material. Part of this energy is used for the pulp mill process-es. the production of surplus en-ergy was registered to the united nations Framework Convention on Climate Change (unFCCC) as a Clean Development Mechanism project.
10.7.Outside experts’ six-month performance review shows that Fray Bentos performs to standardsiFC (international Finance Corporation) publicly released the first environmental monitoring report for Botnia’s Fray Bentos pulp mill in uruguay since the mill began operating in november 2007. the assessment of operat-ing performance was prepared by ecoMetrix incorporated, an independent environmental con-sulting firm. the report finds that the mill is performing to the air and water quality standards pro-jected in the Cumulative impact study and environmental impact Assessment, as required by iFC, and well within the limits estab-lished by the environmental per-mits issued by the uruguayan regulator, DinAMA.
6.2.Martti Asunta new member of Botnia’s Board of DirectorsMr. Martti Asunta, M.sc. (Forestry) was elected to the Board of Directors.
18.2.Forestal Oriental recognized for its export activitiesBotnia’s subsidiary specializing in forestry operations and respon-sible for the wood procurement to the Fray Bentos mill was rec-ognised as the “Major exporter of the year 2007” and also won the award for the most “Dynamic ex-porter of the year 2007” in the an-nual competition promoted by the Banco de la República Oriental del uruguay and the uruguayan union of exporters.
1.3. Botnia organized a city festival in Fray BentosFray Bentos welcomed some of the most popular stars in uruguay, as Botnia, with the sup-port of local authorities, organ-ised a festival “sietetoques” with seven popular music groups. the entrance was free, but people were asked to bring food to be dis-tributed through the local charity organizations. Botnia volunteers assisted in food collection and distribution.
22.4. Botnia launched a traveling exhibition in UruguayA traveling exhibition called espacio móvil was launched in Fray Bentos. this exhibition ex-plains the entire pulp produc-tion process from the eucalyptus seedlings at the tree nursery, the tree plantations and the produc-tion of pulp until its final use to produce paper, cardboard and tissue paper at the mills in europe and Asia. espacio móvil visited 27 communities during the year, with more than 40,000 visitors.
23.4. Jyrki Salo appointed Board memberJyrki salo, executive Vice President and CFO from uPM-Kymmene was elected new mem-ber of the Board.
29.4.Fray Bentos mill achieved a world record in pulp productionBotnia’s pulp mill in Fray Bentos reached its nominal production capacity in only 145 days from start-up. this is a new world record in pulp production, the last two best marks being 171 and 174 days achieved by other mills of similar production technology and capacity. the nominal production capacity was achieved on a thirty-day rolling average basis.
6 7
BOtniA’s yeAR in BRieF BOtniA’s yeAR in BRieF
JuLy August sePteMBeR OCtOBeR nOVeMBeR DeCeMBeR
1.9.Ilkka Hämälä started as new President and CEOilkka Hämälä was appointed President and CeO of Oy Metsä-Botnia Ab in April with the new role being effective as of 1 september. the company’s previ-ous President and CeO erkki Varis retired on 31 August 2008.
ilkka Hämälä obtained his M.sc. degree in engineering from Helsinki university of technology in 1986. He has since held ap-pointments with uPM and has held several posts within Botnia, most recently as senior Vice President with responsibility for pulp production and supply chain.
1.9.New management group announcedthe following persons form Botnia’s management group: ilkka Hämälä, President and CeO, timo Piilonen, Business Development, Ronald Beare, uruguay operations, Maarit Herranen, Human Resources, Ville Jaakonsalo, Finance, ismo nousiainen, Production and Jyrki yrjö-Koskinen, sales and Marketing.
2.9.Forestal Oriental issues corporate bondsForestal Oriental s.A., the for-estry company of Botnia in uruguay, received the approval of the Central Bank of uruguay regarding registration of its pro-gramme to issue corporate bonds for a nominal value of usD 100 million. the approval contains a first series emission under the programme for a nominal value of usD 35 million. through this programme, the company seeks to achieve a more efficient capital structure and be part in the devel-opment of local uruguayan long term investment instruments.
20.9. Forest industry opened doors in Rauma and JoutsenoAn open day was organised at Botnia Rauma mill together with Metsäliitto group wood procure-ment. Also, Joutseno mill opened its doors for the local citizens so they could see first-hand the mill processes and operations.
22.10.Javier Solari appointed Managing Director of Forestal OrientalJavier solari was appointed Managing Director of Forestal Oriental s.A as of november 1st, 2008. in his new role, Javier solari will be responsible for the overall management of Forestal Oriental operations and land base in uruguay.
23.10.Botnia announced market related downtime at its millsDue to weakening market condi-tions and growing pulp invento-ries Botnia announced to cur-tail production at its mills. the curtailments at Botnia’s Finnish mills cut the production with approximately 50,000 tons dur-ing the last quarter of 2008. in uruguay, Botnia’s Fray Bentos mill took downtime in order to cut the production with approximately 40,000 tons.
5.11. Botnia considering stopping production at Kaskinen millthe poor availability of wood raw material at prices that are competitive for the mills has led to production curtailments at Metsä-Botnia’s Finnish mills and eroded their profitability. the available supply of wood will not permit the mills to produce cost-competitively at full capacity in 2009. the company therefore con-siders a temporary shutdown of production at its mill at Kaskinen during the first quarter of 2009, or the closure of the mill. the com-pany commenced statutory coop-eration negotiations with the em-ployees accordingly.
13.11. Botnia recognized for quality excellenceBotnia participated in the qual-ity competition for large com-panies and business units held by excellence Finland (suomen Laatukeskus). Botnia was hon-oured with the “eFQM Recognised for excellence” recognition for its good operations and results. Botnia has been systematically developing its operations with an emphasis on long-term con-sistent quality management. Participation in quality competi-tion is a natural continuation of the development work.
27.11.Joutseno mill produced its 14th million ton of pulpthe 100-year-old Joutseno mill reached the production of 14 mil-lion tons.
1.12.Juha Mäntylä appointed Board memberJuha Mäntylä was appointed member of Botnia’s Board. He is group executive Vice President, Metsäliitto Wood supply.
12.12.Botnia granted a certificate of Energy Efficiency System (EES)Botnia was granted the certificate of energy efficiency system (ees) by inspecta. During 2008 approxi-mately 800 Botnia employees were trained in energy efficiency and the trainings will continue in 2009.
Botnia’s year in brief
JAnuARy FeBRuARy MARCH APRiL MAy June
15.1.More than 100,000 tonnes produced in Fray BentosAfter very successful start-up, the Fray Bentos mill exceeded 100,000 metric tonnes of produc-tion in January.
18.1.Joutseno mill’s 100th anniversarythe Joutseno mill was founded by a norwegian construction engi-neer Johan Christoffer Wiese in 1908, and started its operations in May 1909. At that time the ca-pacity of the mill was 6,000 tons unbleached pulp per year. today Joutseno mill produces annu-ally 645,000 tons of eCF bleached softwood pulp and is the world’s biggest producer of bleached softwood pulp with one produc-tion line.
29.1.Monitoring results showed that Fray Bentos complied with set targetsBotnia published the monitoring results for the first two months of operation. these results clearly showed that the mill is comply-ing with set targets and there are no noticeable changes in the sur-rounding environment.
30.4. Botnia and OSE signed an agreement to treat Fray Bentos wastewater Ose (the uruguayan waterworks) and Botnia signed an agreement to start the works required to treat the municipal wastewater of the city of Fray Bentos at the ef-fluent treatment plant of Botnia´s mill. With this agreement, the wastewater will be biologically treated at the sludge plant of the mill. this will remarkably reduce the total amount of organic mate-rial and nutrients discharged into the River uruguay.
28.5. Fray Bentos bio-energy approved in UN’s climate change protocolthe Botnia Fray Bentos pulp mill power plant generates electricity from biomass, i.e. from dissolved wood material. Part of this energy is used for the pulp mill process-es. the production of surplus en-ergy was registered to the united nations Framework Convention on Climate Change (unFCCC) as a Clean Development Mechanism project.
10.7.Outside experts’ six-month performance review shows that Fray Bentos performs to standardsiFC (international Finance Corporation) publicly released the first environmental monitoring report for Botnia’s Fray Bentos pulp mill in uruguay since the mill began operating in november 2007. the assessment of operat-ing performance was prepared by ecoMetrix incorporated, an independent environmental con-sulting firm. the report finds that the mill is performing to the air and water quality standards pro-jected in the Cumulative impact study and environmental impact Assessment, as required by iFC, and well within the limits estab-lished by the environmental per-mits issued by the uruguayan regulator, DinAMA.
6.2.Martti Asunta new member of Botnia’s Board of DirectorsMr. Martti Asunta, M.sc. (Forestry) was elected to the Board of Directors.
18.2.Forestal Oriental recognized for its export activitiesBotnia’s subsidiary specializing in forestry operations and respon-sible for the wood procurement to the Fray Bentos mill was rec-ognised as the “Major exporter of the year 2007” and also won the award for the most “Dynamic ex-porter of the year 2007” in the an-nual competition promoted by the Banco de la República Oriental del uruguay and the uruguayan union of exporters.
1.3. Botnia organized a city festival in Fray BentosFray Bentos welcomed some of the most popular stars in uruguay, as Botnia, with the sup-port of local authorities, organ-ised a festival “sietetoques” with seven popular music groups. the entrance was free, but people were asked to bring food to be dis-tributed through the local charity organizations. Botnia volunteers assisted in food collection and distribution.
22.4. Botnia launched a traveling exhibition in UruguayA traveling exhibition called espacio móvil was launched in Fray Bentos. this exhibition ex-plains the entire pulp produc-tion process from the eucalyptus seedlings at the tree nursery, the tree plantations and the produc-tion of pulp until its final use to produce paper, cardboard and tissue paper at the mills in europe and Asia. espacio móvil visited 27 communities during the year, with more than 40,000 visitors.
23.4. Jyrki Salo appointed Board memberJyrki salo, executive Vice President and CFO from uPM-Kymmene was elected new mem-ber of the Board.
29.4.Fray Bentos mill achieved a world record in pulp productionBotnia’s pulp mill in Fray Bentos reached its nominal production capacity in only 145 days from start-up. this is a new world record in pulp production, the last two best marks being 171 and 174 days achieved by other mills of similar production technology and capacity. the nominal production capacity was achieved on a thirty-day rolling average basis.
8 9
ReVieW By tHe PResiDent AnD CeO
We are in a business of big volumes. Our mills operate most efficiently when they run continuously at design capacity. in november 2008, we announced a decision to start negotiations for the possible closure of our Kaskinen mill. the decision to shut down the mill completely during 1Q/2009 was made in January 2009. this decision will reduce Botnia’s overall fibre requirements, and will help us operate our most modern mills in Finland closer to their nominal design capacity.
Opportunitiesin the pulp market, there will be a long-term balance of supply and demand. Demand will slowly increase as the developing regions in Asia and south America continue to en-hance their standard of living – which will result in increased consumption of fibre-based products for communications, packaging, hygiene, and other needs.
We produce a fibre commodity that can be used in many, many different end products. it might be that the share of what we deliver to printing media will diminish, or the share that we deliver for packaging will increase, but the overall volume will stay at a good level.
Our basic product is valuable: it has a growing market, it is renewable, it is environ-mentally sound, and it goes to a strong and diverse customer base. We also have attrac-tive possibilities for additional revenue streams to support our traditional business: by-products of our production processes which can replace fossil fuels. today in Finland, close to 10% of our turnover comes from our by-products, like electricity, heating, bark fuels, crude tall oil, turpentine, etc.
Another opportunity for us is the environmental performance of our mills. there is always room for improvement even though, within our industry, we are one of the best environmental performers. As a responsible, sustainable supplier, we can’t just say we are better and leave it at that. Of course, the development work is long-term and requires resources, but to maintain our right to operate in the future, we must do that work.
Botnia is well-positioned to meet the challenges – and take advantage of the opportu-nities – in the future. Our mill efficiencies are good and our energy-efficiency is excellent. We have low capital costs. Our customer base is solid, and demand for our products will increase globally. Of course, we must be continually prepared to adjust our operations to meet changing conditions, and we intend to be successful.
ilkka Hämälä
An elite gymnast trains to improve balance and stability while running, jumping, and spinning through the air. Botnia approaches its business in much the same fashion – improving its core strength to stay on course even when external forces try to push it off-balance. Short-term, we have the strength to overcome obstacles. Longer term, we will exploit several opportunities for growth.
While pulp is a commodity, making pulp is not. there are critical variables that make it impossible for us to sit back, put our feet up, and run our business in autopilot.
Occasionally, like in 2008, these variables collide at the same time. Most notable are the continuation of wood shortages and fluctuations in global market demand. But, we are taking actions to manage these obstacles without losing long-term profitability.
For the majority of 2008, our business saw generally good market conditions, even with pulp prices decreasing slightly over the year. the last half of the year added the el-ement of reduced customer demand, as a result of global economic distress. inventory levels rose at the end of the year and many producers announced downtime.
Our position among pulp producers is strong and the long-term business is healthy, but these are times when our core strengths are vitally important.
Core strengthsWorld-class athletes train diligently to improve their “core strength” – a strong, yet flex-ible, torso that contributes to balance and stability. the stronger the core, the higher the likelihood of world-class performance. At Botnia’s very core, we are strong.
in the southern hemisphere, we have a good, modern mill producing high-quality short-fibre pulp with a very efficient cost structure. in addition, we have very efficient lo-gistic channels and a good customer base.
in Finland, we have solid and stable capacity, particularly with long-fibre grades, and our overall quality and customer base is very good. if we compare ourselves to other northern hemisphere producers, we are in a very competitive position.
Short-term challengesWe do, however, have short-term problems that have affected us throughout much of 2008. Our biggest challenge remains fibre availability and cost.
Historically, the Finnish wood industry has developed based upon a combination of domestic timber and the importing of wood resources, primarily from Russia and the Baltics. the imported proportion has been roughly 25-30%. nordic mills increased ca-pacity, assisted by this availability of wood.
now, domestic wood supply is limited and the volume of imported wood is in question as Russia contemplates increases in roundwood export duties. this has resulted in a rapid rise in the cost of wood over the last 12-18 months, deteriorating the profitability of our Finnish mills.
A potential risk is the competition for raw materials coming from outside our busi-ness. to be able to reach the eu targets for renewable energy, there will be additional national initiatives which may attempt to procure wood resources for burning that com-pete with sawmills and pulp producers trying to add value. then, prices will go up and the availability of wood raw materials will be reduced.
Review by the president and CEO
8 9
ReVieW By tHe PResiDent AnD CeO
We are in a business of big volumes. Our mills operate most efficiently when they run continuously at design capacity. in november 2008, we announced a decision to start negotiations for the possible closure of our Kaskinen mill. the decision to shut down the mill completely during 1Q/2009 was made in January 2009. this decision will reduce Botnia’s overall fibre requirements, and will help us operate our most modern mills in Finland closer to their nominal design capacity.
Opportunitiesin the pulp market, there will be a long-term balance of supply and demand. Demand will slowly increase as the developing regions in Asia and south America continue to en-hance their standard of living – which will result in increased consumption of fibre-based products for communications, packaging, hygiene, and other needs.
We produce a fibre commodity that can be used in many, many different end products. it might be that the share of what we deliver to printing media will diminish, or the share that we deliver for packaging will increase, but the overall volume will stay at a good level.
Our basic product is valuable: it has a growing market, it is renewable, it is environ-mentally sound, and it goes to a strong and diverse customer base. We also have attrac-tive possibilities for additional revenue streams to support our traditional business: by-products of our production processes which can replace fossil fuels. today in Finland, close to 10% of our turnover comes from our by-products, like electricity, heating, bark fuels, crude tall oil, turpentine, etc.
Another opportunity for us is the environmental performance of our mills. there is always room for improvement even though, within our industry, we are one of the best environmental performers. As a responsible, sustainable supplier, we can’t just say we are better and leave it at that. Of course, the development work is long-term and requires resources, but to maintain our right to operate in the future, we must do that work.
Botnia is well-positioned to meet the challenges – and take advantage of the opportu-nities – in the future. Our mill efficiencies are good and our energy-efficiency is excellent. We have low capital costs. Our customer base is solid, and demand for our products will increase globally. Of course, we must be continually prepared to adjust our operations to meet changing conditions, and we intend to be successful.
ilkka Hämälä
An elite gymnast trains to improve balance and stability while running, jumping, and spinning through the air. Botnia approaches its business in much the same fashion – improving its core strength to stay on course even when external forces try to push it off-balance. Short-term, we have the strength to overcome obstacles. Longer term, we will exploit several opportunities for growth.
While pulp is a commodity, making pulp is not. there are critical variables that make it impossible for us to sit back, put our feet up, and run our business in autopilot.
Occasionally, like in 2008, these variables collide at the same time. Most notable are the continuation of wood shortages and fluctuations in global market demand. But, we are taking actions to manage these obstacles without losing long-term profitability.
For the majority of 2008, our business saw generally good market conditions, even with pulp prices decreasing slightly over the year. the last half of the year added the el-ement of reduced customer demand, as a result of global economic distress. inventory levels rose at the end of the year and many producers announced downtime.
Our position among pulp producers is strong and the long-term business is healthy, but these are times when our core strengths are vitally important.
Core strengthsWorld-class athletes train diligently to improve their “core strength” – a strong, yet flex-ible, torso that contributes to balance and stability. the stronger the core, the higher the likelihood of world-class performance. At Botnia’s very core, we are strong.
in the southern hemisphere, we have a good, modern mill producing high-quality short-fibre pulp with a very efficient cost structure. in addition, we have very efficient lo-gistic channels and a good customer base.
in Finland, we have solid and stable capacity, particularly with long-fibre grades, and our overall quality and customer base is very good. if we compare ourselves to other northern hemisphere producers, we are in a very competitive position.
Short-term challengesWe do, however, have short-term problems that have affected us throughout much of 2008. Our biggest challenge remains fibre availability and cost.
Historically, the Finnish wood industry has developed based upon a combination of domestic timber and the importing of wood resources, primarily from Russia and the Baltics. the imported proportion has been roughly 25-30%. nordic mills increased ca-pacity, assisted by this availability of wood.
now, domestic wood supply is limited and the volume of imported wood is in question as Russia contemplates increases in roundwood export duties. this has resulted in a rapid rise in the cost of wood over the last 12-18 months, deteriorating the profitability of our Finnish mills.
A potential risk is the competition for raw materials coming from outside our busi-ness. to be able to reach the eu targets for renewable energy, there will be additional national initiatives which may attempt to procure wood resources for burning that com-pete with sawmills and pulp producers trying to add value. then, prices will go up and the availability of wood raw materials will be reduced.
Review by the president and CEO
10 11
PROCesses
10 11
PROCesses
12 13
A CustOMeR-DRiVen Business A CustOMeR-DRiVen Business
marketing, production, business support and steering, etc. these company-wide organizations are physically distributed at our various locations, but are managed in a centralized way.
Botnia has systematically developed its operations with a focus on quality management within a long-term perspec-tive. in 2008, Botnia participated in the quality competition for large companies and business units held by excellence Finland (suomen Laatukeskus). in november, Botnia was honoured with the “eFQM Recognised for excellence” award for its good operations and results. the evaluation is based on european Foundation for Quality Management (eFQM) model widely used in europe. the evaluation covers all business operations in both qualitative and quantitative terms. to be “Recognised for excellence” requires that the company amass more than 400 points during the evaluation.
the newest Competence Centre, formed in september, is Business Development. in larger or more traditional companies, this function is focused on finding and devel-oping new business opportunities – through partnerships, acquisitions, alliances, or other strategic ventures.
in Botnia, the Business Development Competence Centre comprises a group of specialists working on two fronts: exploring business opportunities, but more impor-tantly, improving the efficiency of the existing business. Of the 55 people working in this Centre, the majority are working on developmental improvement projects: de-veloping better fibre characteristics and better quality of technical service to customers; analyzing new technolo-gies that can be applied in Botnia’s mills; sharpening the focus and management of investment projects; and per-forming R&D in the areas of mill process improvements and fibre development.
in addition, there is active work on finding and evalu-ating new business opportunities globally as well as the expertise to implement major investment projects. the Russian sawmill and timber harvesting subsidiaries are also included in the Business Development function, since they are non-core activities for Botnia and are intended to better understand this important market.
One business unit and one waythough we are comprised of different legal entities, we op-erate our businesses as one unit. We have one expansive product portfolio. We have one sales network. We can ef-ficiently supply different pulp products from different mills to a single customer, and it is transparent to the customer how we achieve this.
We support our customers in terms of the correct fibre selection, scheduling, delivery, logistics, storage, and product development. Whenever possible, we enter into joint development projects with customers to help them improve their competitiveness. Customer assessments of Botnia operations and performance are measured regu-larly and systematically to ensure we focus on continuous improvement of our core processes.
In pursuit of our strategy to be the world’s leading supplier of fibres, we began converting our structure from production-centred to customer-centred in 2001. We looked at what we were doing and compared that to what our customers needed us to do. We have today a structure that is driven by customer requirements, and which is as simple and as uniform as possible.
Botnia’s aim is to be the leading producer of fibre, fibre char-acteristics, and value-added services for its customers. to achieve this goal, we must fully understand our customers’ needs and follow the changes in their business environ-ment. this is not just the task of our sales and marketing people, or customer service engineers. every employee is empowered to keep the customer at the centre of focus.
Our strategy is implemented through continuous busi-ness development. We support the strategy through three Core Processes that direct our operations, and strategy-supporting targets are set on an annual basis. these Core Processes are:
A customer-driven business
• ManagementWe manage the company by creating a strategy and, after approval by the Board, implementing that strat-egy. Our strategy starts with defining who are our customers, how they are developing, and what they need to succeed.
• Customershipthis covers the full range of activities about how we interface with customers, how we service them, and how we supply them – and everything related to this.
• SourcingandOperationsthis process covers how we “run the machine” inside our company: how we source raw materials, how we physically produce our products, and everything that we must do in order to be an effective engine of production.
the other dimension in our structure is the concept of Competence Centres which support our business and implement set targets: business development, sales and
Management Strategy and Structure
CUSTOMER
MANAGEMENT
CUSTOMERSHIP
SOURCING AND OPERATIONS
Business development
Business support and steering
Production Finland Uruguay
Sales and marketing
Botnia’s Core Processes and Competence Centres
0
100
200
300
400
500
600
0
10
20
30
40
50
60
2004 2005 2006 2007 2008
Sales %
InvestmentsEUR M %
12 13
A CustOMeR-DRiVen Business A CustOMeR-DRiVen Business
marketing, production, business support and steering, etc. these company-wide organizations are physically distributed at our various locations, but are managed in a centralized way.
Botnia has systematically developed its operations with a focus on quality management within a long-term perspec-tive. in 2008, Botnia participated in the quality competition for large companies and business units held by excellence Finland (suomen Laatukeskus). in november, Botnia was honoured with the “eFQM Recognised for excellence” award for its good operations and results. the evaluation is based on european Foundation for Quality Management (eFQM) model widely used in europe. the evaluation covers all business operations in both qualitative and quantitative terms. to be “Recognised for excellence” requires that the company amass more than 400 points during the evaluation.
the newest Competence Centre, formed in september, is Business Development. in larger or more traditional companies, this function is focused on finding and devel-oping new business opportunities – through partnerships, acquisitions, alliances, or other strategic ventures.
in Botnia, the Business Development Competence Centre comprises a group of specialists working on two fronts: exploring business opportunities, but more impor-tantly, improving the efficiency of the existing business. Of the 55 people working in this Centre, the majority are working on developmental improvement projects: de-veloping better fibre characteristics and better quality of technical service to customers; analyzing new technolo-gies that can be applied in Botnia’s mills; sharpening the focus and management of investment projects; and per-forming R&D in the areas of mill process improvements and fibre development.
in addition, there is active work on finding and evalu-ating new business opportunities globally as well as the expertise to implement major investment projects. the Russian sawmill and timber harvesting subsidiaries are also included in the Business Development function, since they are non-core activities for Botnia and are intended to better understand this important market.
One business unit and one waythough we are comprised of different legal entities, we op-erate our businesses as one unit. We have one expansive product portfolio. We have one sales network. We can ef-ficiently supply different pulp products from different mills to a single customer, and it is transparent to the customer how we achieve this.
We support our customers in terms of the correct fibre selection, scheduling, delivery, logistics, storage, and product development. Whenever possible, we enter into joint development projects with customers to help them improve their competitiveness. Customer assessments of Botnia operations and performance are measured regu-larly and systematically to ensure we focus on continuous improvement of our core processes.
In pursuit of our strategy to be the world’s leading supplier of fibres, we began converting our structure from production-centred to customer-centred in 2001. We looked at what we were doing and compared that to what our customers needed us to do. We have today a structure that is driven by customer requirements, and which is as simple and as uniform as possible.
Botnia’s aim is to be the leading producer of fibre, fibre char-acteristics, and value-added services for its customers. to achieve this goal, we must fully understand our customers’ needs and follow the changes in their business environ-ment. this is not just the task of our sales and marketing people, or customer service engineers. every employee is empowered to keep the customer at the centre of focus.
Our strategy is implemented through continuous busi-ness development. We support the strategy through three Core Processes that direct our operations, and strategy-supporting targets are set on an annual basis. these Core Processes are:
A customer-driven business
• ManagementWe manage the company by creating a strategy and, after approval by the Board, implementing that strat-egy. Our strategy starts with defining who are our customers, how they are developing, and what they need to succeed.
• Customershipthis covers the full range of activities about how we interface with customers, how we service them, and how we supply them – and everything related to this.
• SourcingandOperationsthis process covers how we “run the machine” inside our company: how we source raw materials, how we physically produce our products, and everything that we must do in order to be an effective engine of production.
the other dimension in our structure is the concept of Competence Centres which support our business and implement set targets: business development, sales and
Management Strategy and Structure
CUSTOMER
MANAGEMENT
CUSTOMERSHIP
SOURCING AND OPERATIONS
Business development
Business support and steering
Production Finland Uruguay
Sales and marketing
Botnia’s Core Processes and Competence Centres
0
100
200
300
400
500
600
0
10
20
30
40
50
60
2004 2005 2006 2007 2008
Sales %
InvestmentsEUR M %
14 15
CustOMeRsHiP ensuRes ReLiABiLity OF suPPLy CustOMeRsHiP ensuRes ReLiABiLity OF suPPLy
is a significant market pulp supplier. A long-term presence in the pulp market underpins the company’s sustainable quality and cost competitiveness. Pulp marketing is han-dled by our marketing organization through sales offices in germany and China.
Continuing weak paper price development plagues our customer base. Pulp prices, denominated in us dollars, declined slowly during the year. With the rise in strength of the dollar, the impact on pricing became more significant as the year progressed.
slower economic growth is predicted globally. in ad-dition, the rising price of wood is a matter of concern for the whole pulp and paper industry.
Product developmentBotnia allocates substantial resources to research and product development. Development work is focused both improving our mill processes as well as improving the way pulp is used in our customers’ processes.
Mill processes are improved taking customer needs into account. Our focus is on optimizing the raw material mix and modifying fibre characteristics to meet anticipated customer requirements. improving the consistency of pulp quality is an on-going priority. the measure of success is a higher proportion of prime quality in total output, lower incidence of quality deviations in products delivered, and positive feedback from customers.
For development work done jointly with customers, the aim is the same: to increase cost-efficiency and to pro-duce specific pulp characteristics that offer an advantage.
in Finland, the focus of fibre development has been reinforcement pulp, which gives paper desirable strength characteristics. the modernization of the bleaching process at the Rauma mill from tCF to eCF bleaching, strengthens Botnia’s ability to serve customers who make magazine paper.
Collaboration with customers has aided us in success-fully developing the technical characteristics of uruguayan plantation trees for papermaking. european customers were able to begin their first test runs of Fray Bentos pulp
in January, while Asian test runs commenced in March. While much of the current development work is aimed at efficient plantation wood production, it will also be possi-ble over the longer term to improve the technical charac-teristics of the pulp through a development process that commences with plant breeding. this opens entirely new development opportunities.
Technical servicesBy focusing its resources on customer-oriented develop-ment work, we offer our customers in-depth fibre expertise and services related to the use of fibre. this is the role of the specialists in our technical Customer service organization.
the customer service engineer is one important link between customer and Botnia. to work effectively, the serv-ice engineers needs to be aware of what his/her assigned customers are doing in terms of production, grades, and future plans. With a wide portfolio of pulp products avail-able, service engineers bring their own expertise to the cus-tomer’s process and help customers find the best possible pulp for their end product. in a spirit of true collaboration, the aim is to develop the technical fibre characteristics in addition to operating an efficient, yet flexible, logistics chain.
Customer satisfactionsince 2000, Botnia has used an outside expert to monitor the development of its customer-driven business model with annual surveys.
A survey conducted in October 2008 shows that cus-tomer confidence in Botnia has not been shaken by tight supply conditions. Botnia received high grades in key cri-teria measured by customers. in fact, in the 2008 survey, the customer rating for Reliability improved despite the tight delivery situation during the beginning of the year.
The Customership process is responsible for developing customer relationships, marketing and selling pulp, delivering pulp, and providing customers with technical support services. The key driver for customers is reliability: on-time delivery of pulp that is of consistent, high quality.
in developing core customerships, Botnia aims at establish-ing and maintaining long-term partnerships that create the right conditions for joint development. each customer is served by Botnia specialists responsible for managing and developing the relationship: deeper and broader than just the sales and marketing representative. in order to ensure that Botnia’s total expertise is available to that customer, the customer team also consists of production, research and development, technical service, and logistics professionals.
The Botnia brandthe Botnia brand is being purposefully built among pulp-using companies. Botnia has an excellent name among paper and board customers and, with the new eucalyptus pulp, there are opportunities for increasing brand aware-ness among a new customer base.
the more long-term the customer is to Botnia, and the more significant a supplier that Botnia is to the cus-tomer, the more important it becomes to find innovative and lasting methods of cooperation. A sustained partner-
ship creates a solid foundation for managing fluctuations in market conditions. For example, frame agreements for Fray Bentos pulp were signed with customers at a time when three million tonnes of bleached hardwood pulp, mainly eucalyptus, came on-stream from south America, demonstrating the value of customership.
Product portfolioBotnia’s product range extends from northern softwood grades (reinforcement and commodity grade softwood pulps) to northern hardwood (Birch) grades, and to southern hardwood (eucalyptus) grades produced from fast-growing plantations. now that the uruguay mill is in full opera-tion, Botnia is the only pulp company in the market with a product portfolio of all the pulps that customers require.
Producers of magazine paper need reinforcement pulp to give their paper the necessary strength characteristics. Ordinary softwood pulp produced from northern conifer-ous wood is a versatile raw material for paper and packag-ing products. short-fibre northern birch pulp is a special product suitable for making board, specialty papers, and other products. eucalyptus pulp has uniform quality and good fibre characteristics which make it especially suitable for fine papers and tissue.
Market developmentthe rapid rate of restructuring within the pulp industry continues. in europe and north America, old capacity that has become unprofitable is being shut down. the new capacity is primarily being built in the southern hemi-sphere adjacent to fast-growing plantation wood. in the wider perspective, the trend is from north to south, and from natural forests to plantations. As a result, capac-ity increases have transitioned from long-fibre to short-fibre pulps.
two-thirds of our production is directed to the paper mills of our shareholders (uPM-Kymmene, M-real, and Metsä tissue). One-third is sold on the market, mainly to customers in europe and in Asia. in selected sectors, Botnia
Customership ensures reliability of supplyThe Customership Process
■ Finland■ EU countries■ Rest of Europe■ Rest of the world
Sales by market areas, EUR M
14 15
CustOMeRsHiP ensuRes ReLiABiLity OF suPPLy CustOMeRsHiP ensuRes ReLiABiLity OF suPPLy
is a significant market pulp supplier. A long-term presence in the pulp market underpins the company’s sustainable quality and cost competitiveness. Pulp marketing is han-dled by our marketing organization through sales offices in germany and China.
Continuing weak paper price development plagues our customer base. Pulp prices, denominated in us dollars, declined slowly during the year. With the rise in strength of the dollar, the impact on pricing became more significant as the year progressed.
slower economic growth is predicted globally. in ad-dition, the rising price of wood is a matter of concern for the whole pulp and paper industry.
Product developmentBotnia allocates substantial resources to research and product development. Development work is focused both improving our mill processes as well as improving the way pulp is used in our customers’ processes.
Mill processes are improved taking customer needs into account. Our focus is on optimizing the raw material mix and modifying fibre characteristics to meet anticipated customer requirements. improving the consistency of pulp quality is an on-going priority. the measure of success is a higher proportion of prime quality in total output, lower incidence of quality deviations in products delivered, and positive feedback from customers.
For development work done jointly with customers, the aim is the same: to increase cost-efficiency and to pro-duce specific pulp characteristics that offer an advantage.
in Finland, the focus of fibre development has been reinforcement pulp, which gives paper desirable strength characteristics. the modernization of the bleaching process at the Rauma mill from tCF to eCF bleaching, strengthens Botnia’s ability to serve customers who make magazine paper.
Collaboration with customers has aided us in success-fully developing the technical characteristics of uruguayan plantation trees for papermaking. european customers were able to begin their first test runs of Fray Bentos pulp
in January, while Asian test runs commenced in March. While much of the current development work is aimed at efficient plantation wood production, it will also be possi-ble over the longer term to improve the technical charac-teristics of the pulp through a development process that commences with plant breeding. this opens entirely new development opportunities.
Technical servicesBy focusing its resources on customer-oriented develop-ment work, we offer our customers in-depth fibre expertise and services related to the use of fibre. this is the role of the specialists in our technical Customer service organization.
the customer service engineer is one important link between customer and Botnia. to work effectively, the serv-ice engineers needs to be aware of what his/her assigned customers are doing in terms of production, grades, and future plans. With a wide portfolio of pulp products avail-able, service engineers bring their own expertise to the cus-tomer’s process and help customers find the best possible pulp for their end product. in a spirit of true collaboration, the aim is to develop the technical fibre characteristics in addition to operating an efficient, yet flexible, logistics chain.
Customer satisfactionsince 2000, Botnia has used an outside expert to monitor the development of its customer-driven business model with annual surveys.
A survey conducted in October 2008 shows that cus-tomer confidence in Botnia has not been shaken by tight supply conditions. Botnia received high grades in key cri-teria measured by customers. in fact, in the 2008 survey, the customer rating for Reliability improved despite the tight delivery situation during the beginning of the year.
The Customership process is responsible for developing customer relationships, marketing and selling pulp, delivering pulp, and providing customers with technical support services. The key driver for customers is reliability: on-time delivery of pulp that is of consistent, high quality.
in developing core customerships, Botnia aims at establish-ing and maintaining long-term partnerships that create the right conditions for joint development. each customer is served by Botnia specialists responsible for managing and developing the relationship: deeper and broader than just the sales and marketing representative. in order to ensure that Botnia’s total expertise is available to that customer, the customer team also consists of production, research and development, technical service, and logistics professionals.
The Botnia brandthe Botnia brand is being purposefully built among pulp-using companies. Botnia has an excellent name among paper and board customers and, with the new eucalyptus pulp, there are opportunities for increasing brand aware-ness among a new customer base.
the more long-term the customer is to Botnia, and the more significant a supplier that Botnia is to the cus-tomer, the more important it becomes to find innovative and lasting methods of cooperation. A sustained partner-
ship creates a solid foundation for managing fluctuations in market conditions. For example, frame agreements for Fray Bentos pulp were signed with customers at a time when three million tonnes of bleached hardwood pulp, mainly eucalyptus, came on-stream from south America, demonstrating the value of customership.
Product portfolioBotnia’s product range extends from northern softwood grades (reinforcement and commodity grade softwood pulps) to northern hardwood (Birch) grades, and to southern hardwood (eucalyptus) grades produced from fast-growing plantations. now that the uruguay mill is in full opera-tion, Botnia is the only pulp company in the market with a product portfolio of all the pulps that customers require.
Producers of magazine paper need reinforcement pulp to give their paper the necessary strength characteristics. Ordinary softwood pulp produced from northern conifer-ous wood is a versatile raw material for paper and packag-ing products. short-fibre northern birch pulp is a special product suitable for making board, specialty papers, and other products. eucalyptus pulp has uniform quality and good fibre characteristics which make it especially suitable for fine papers and tissue.
Market developmentthe rapid rate of restructuring within the pulp industry continues. in europe and north America, old capacity that has become unprofitable is being shut down. the new capacity is primarily being built in the southern hemi-sphere adjacent to fast-growing plantation wood. in the wider perspective, the trend is from north to south, and from natural forests to plantations. As a result, capac-ity increases have transitioned from long-fibre to short-fibre pulps.
two-thirds of our production is directed to the paper mills of our shareholders (uPM-Kymmene, M-real, and Metsä tissue). One-third is sold on the market, mainly to customers in europe and in Asia. in selected sectors, Botnia
Customership ensures reliability of supplyThe Customership Process
■ Finland■ EU countries■ Rest of Europe■ Rest of the world
Sales by market areas, EUR M
16 17
inCReAsing eFFiCienCies, ReDuCing COsts OF DeLiVeRies CeRtiFieD eneRgy-eFFiCienCy systeM
Sale of energy by-products from the pulping process (bark, electricity, thermal heat, etc.) represent about 10% of the company’s total turnover in Finland. The process itself is energy self-sufficient, generating green energy from renewable resources. Botnia’s programme to improve the production of energy while decreasing its energy consumption has been verified and certified by Inspecta of Finland. Botnia is the first company to receive this certification, which covers all its Finnish mills.
Botnia mills use wood-based fuels to generate power far in excess of their own needs. As a major producer of bioenergy, Botnia guards its energy efficiency by steadily improving its processes. the general approach is known as energy efficiency Optimization (eeO).
in December 2007, the Finnish Ministry of employment and economy announced a programme of voluntary report-ing about energy efficiencies by the industrial sector and encouraged company’s to develop their own energy efficiency system (ees). Botnia volunteered to be a participant.
Botnia has been an active participant in the Metsäliitto group’s energy efficiency programme – implementing vari-ous projects at each mill to boost their power output and curb consumption. the company is also isO 14001 certi-fied. so the basic elements were in place.
Certified energy-efficiency systemFirst certificate for Energy Efficiency
By combining the reports, actions, and projects from the eeO programme with the structure of isO 14001, Botnia was able to create its ees – a programme for continuous improvement in terms of energy efficiency.
this ees has been verified by third-party inspectors/auditors and a certificate was granted to all Botnia’s Finnish mills on 12 December. Botnia was the first company to be audited and certified by inspecta in Finland.
in 2008, Botnia’s generation of heat energy was 17,145 gWh. Almost 98% of this is generated with renewable en-ergy resources.
As part of the ees, each mill location defines specific projects to increase energy production or reduce consump-tion. the action plans are reviewed and updated four times a year. these projects are identified as the result of millwide energy analyses performed by outside consultants. these analyses have been completed at our Rauma, Kemi, and äänekoski mills. the Joutseno mill will complete its millwide energy analysis in 2009. typically, the economic payback on these energy investment projects is one year or less.
The term “logistics” originates from the ancient Greek – where special military officers (Logistikas) were responsible for the movement of arms and rations from the base to forward positions. Today, we think of logistics as the time-related positioning of resources. Mastering logistics is vital for any company in the pulp business due to the volumes and costs involved.
to any customer, the most important part of our supply chain is the faultless delivery of pulp – with the right quantity and quality, and at the right time. However, there is much more involved from Botnia’s side, including pulp volume control, raw materials management, logistics planning, pulp storage, and environmental concerns.
Botnia uses its own logistics planning and reporting system to keep service at a high level in a cost-efficient way. the distribution chain targets to minimize intermediate storage points and utilizes an extensive range of transpor-tation options: river barges, ocean vessels, coastal vessels, railways, and trucks.
Fray Bentos integrationintegrating the uruguay mill into Botnia’s supply chain has been one of the major activities in the year under review. Mill operations at Fray Bentos got off to an excellent start and delivery volumes have exceeded the targeted level. Deliveries of pulp to europe and Asia have been secured by a long-term ocean carriage agreements. this safeguards the cost-competitiveness of the new product.
At the Fray Bentos mill, pulp bales are loaded directly onto river barges, which carry it about 100 km to the ocean port of nueva Palmira. the port was modernized and enlarged for pulp traffic and a new 30,000 square metre warehouse and a 180 metre long peer were built. Operative management of the port is the responsibility of Ontur s.A., which is 40% owned by Botnia.
At nueva Palmira, the bales are secured in a warehouse to await loading into ocean-going vessels. each month, two ships leave for europe and one for Asia. the pulp is shipped to Botnia’s main delivery ports in Flushing, Holland and Changshu, China. From the ports of arrival, the pulp is warehoused and delivered to customers through the same channels as pulp supplied from Finnish mills.
Logistics planningin 2008, logistics was integrated into Botnia’s Customership process due to the close communications and cooperation required with the sales/marketing team. An Advanced Planning Optimization (APO) software system aids Botnia in calculating customer demand and planning the loading from its production units.
Increasing efficiencies, reducing costs of deliveries
Pulp deliveries in Finland, tons/km
■ Truck■ Train
Export shipments
■ Conventional■ Containers
Shipments by origin
■ From Finland■ From Uruguay
16 17
inCReAsing eFFiCienCies, ReDuCing COsts OF DeLiVeRies CeRtiFieD eneRgy-eFFiCienCy systeM
Sale of energy by-products from the pulping process (bark, electricity, thermal heat, etc.) represent about 10% of the company’s total turnover in Finland. The process itself is energy self-sufficient, generating green energy from renewable resources. Botnia’s programme to improve the production of energy while decreasing its energy consumption has been verified and certified by Inspecta of Finland. Botnia is the first company to receive this certification, which covers all its Finnish mills.
Botnia mills use wood-based fuels to generate power far in excess of their own needs. As a major producer of bioenergy, Botnia guards its energy efficiency by steadily improving its processes. the general approach is known as energy efficiency Optimization (eeO).
in December 2007, the Finnish Ministry of employment and economy announced a programme of voluntary report-ing about energy efficiencies by the industrial sector and encouraged company’s to develop their own energy efficiency system (ees). Botnia volunteered to be a participant.
Botnia has been an active participant in the Metsäliitto group’s energy efficiency programme – implementing vari-ous projects at each mill to boost their power output and curb consumption. the company is also isO 14001 certi-fied. so the basic elements were in place.
Certified energy-efficiency systemFirst certificate for Energy Efficiency
By combining the reports, actions, and projects from the eeO programme with the structure of isO 14001, Botnia was able to create its ees – a programme for continuous improvement in terms of energy efficiency.
this ees has been verified by third-party inspectors/auditors and a certificate was granted to all Botnia’s Finnish mills on 12 December. Botnia was the first company to be audited and certified by inspecta in Finland.
in 2008, Botnia’s generation of heat energy was 17,145 gWh. Almost 98% of this is generated with renewable en-ergy resources.
As part of the ees, each mill location defines specific projects to increase energy production or reduce consump-tion. the action plans are reviewed and updated four times a year. these projects are identified as the result of millwide energy analyses performed by outside consultants. these analyses have been completed at our Rauma, Kemi, and äänekoski mills. the Joutseno mill will complete its millwide energy analysis in 2009. typically, the economic payback on these energy investment projects is one year or less.
The term “logistics” originates from the ancient Greek – where special military officers (Logistikas) were responsible for the movement of arms and rations from the base to forward positions. Today, we think of logistics as the time-related positioning of resources. Mastering logistics is vital for any company in the pulp business due to the volumes and costs involved.
to any customer, the most important part of our supply chain is the faultless delivery of pulp – with the right quantity and quality, and at the right time. However, there is much more involved from Botnia’s side, including pulp volume control, raw materials management, logistics planning, pulp storage, and environmental concerns.
Botnia uses its own logistics planning and reporting system to keep service at a high level in a cost-efficient way. the distribution chain targets to minimize intermediate storage points and utilizes an extensive range of transpor-tation options: river barges, ocean vessels, coastal vessels, railways, and trucks.
Fray Bentos integrationintegrating the uruguay mill into Botnia’s supply chain has been one of the major activities in the year under review. Mill operations at Fray Bentos got off to an excellent start and delivery volumes have exceeded the targeted level. Deliveries of pulp to europe and Asia have been secured by a long-term ocean carriage agreements. this safeguards the cost-competitiveness of the new product.
At the Fray Bentos mill, pulp bales are loaded directly onto river barges, which carry it about 100 km to the ocean port of nueva Palmira. the port was modernized and enlarged for pulp traffic and a new 30,000 square metre warehouse and a 180 metre long peer were built. Operative management of the port is the responsibility of Ontur s.A., which is 40% owned by Botnia.
At nueva Palmira, the bales are secured in a warehouse to await loading into ocean-going vessels. each month, two ships leave for europe and one for Asia. the pulp is shipped to Botnia’s main delivery ports in Flushing, Holland and Changshu, China. From the ports of arrival, the pulp is warehoused and delivered to customers through the same channels as pulp supplied from Finnish mills.
Logistics planningin 2008, logistics was integrated into Botnia’s Customership process due to the close communications and cooperation required with the sales/marketing team. An Advanced Planning Optimization (APO) software system aids Botnia in calculating customer demand and planning the loading from its production units.
Increasing efficiencies, reducing costs of deliveries
Pulp deliveries in Finland, tons/km
■ Truck■ Train
Export shipments
■ Conventional■ Containers
Shipments by origin
■ From Finland■ From Uruguay
18 19
sOuRCing AnD OPeRAtiOns sOuRCing AnD OPeRAtiOns
the atmosphere. in äänekoski, investments were made to modernize the chlorine dioxide plant to reduce the amount of AOX in bleach plant effluents.
Russian sawmillOOO svir timber, Botnia’s Russian subsidiary, has a modern sawmill located at Podporozhye in the Leningrad adminis-trative district. the project began in 2004 and the sawmill started up in 2006. Botnia also owns two wood harvesting companies to supply svir timber with roundwood.
the sawmill investment is part of Botnia’s strategy to become familiar with the forest resources in north-west Russia as a precursor for a possible mill installation at some time in the future. By starting with mechanical wood production, the company is learning how to man-age and operate a production facility in Russia and how to ensure the availability of high-quality raw materials for reinforcement pulp.
svir timber’s nominal design capacity is 200,000 cubic metres of spruce sawn goods per year. the market situation for sawn goods has turned down in 2008. Actual produc-tion of the sawmill in the year was 170,747 cubic metres.
Looking forwardForecasts are that raw material supply and market condi-tions will not allow all our Finnish mills to operate cost-
competitively at full capacity in 2009. We must adjust our production accordingly. spreading production cutbacks across all five of our mills in Finland would lower the ef-ficiency at each mill and significantly weaken the profit-ability of the company.
therefore, the company announced in november a decision to temporarily shut down the production of the Kaskinen mill during the first quarter of 2009 or closing of the mill. Kaskinen is the oldest of Botnia’s mills as far as technology is concerned, and it has the highest production costs. it has also been using greater quantities of imported wood than other Botnia mills. A formal proposal for the start of statutory negotiations as required by Finland’s Act on Cooperation in Companies was given in november 2008. the negotiations included 223 employees.the decision to shut down the mill completely during the first quarter of 2009 was made in January 2009.
several concurrent efficiency programmes are underway to decrease chemical consumption in the mills, e.g. precise process control of the bleaching operation and nominal wood consumption from the mill gate to the fin-ished goods warehouse, e.g. woodyard control and yield improvements in the pulp cooking process.
Production 2008Pulp mills, 1,000 tonnes Capacity Personnel*Year 2006 2007 2008 2008Fray Bentos 99 935 1,100 187Joutseno 571 583 523 650 174Kaskinen 413 404 400 450 191Kemi 533 550 515 575 206Rauma 532 519 493 630 121äänekoski 471 462 432 500 164Total 2,520 2,616 3,298 3,905 1,043Capacity utilization % 92 92 87Svir Timber sawn goods 1,000 m3 188 171 200 132
* Mill manning
Sourcing and Operations is responsible for procuring raw materials and producing products that meet customer quality requirements. Raw material shortages in Finland have made this a challenging year in terms of productive output and profitability.
the shortage of wood raw materials at competitive prices again led to production curtailments at our Finnish mills and eroded their profitability. Finnish mills fell short of their 2008 production target of 247,000 tonnes or about 8%. Actual production of the five mills in Finland was 2,363,086 tonnes (compared to 2,516,935 tonnes in 2007). Capacity utilization of the mills was 87% (compared to 92% for 2007). At the end of the year, all mills curtailed production due to the weak market situation.
Production in uruguay exceeded the first year’s target by 85,000 tonnes. Actual production of Fray Bentos for 2008 was 935,000 tonnes of bleached eucalyptus pulp.
sales to shareholders accounted for 60 percent of to-tal production, with the remaining 40 percent being sold on the market.
After the start-up of Rauma’s modernized bleaching process, the mill ceased to produce tCF pulp and now produces eCF pulp. By doing so, the pulp characteristics, particularly the strength characteristics, were signifi-cantly improved. this conversion of bleaching processes strengthens Botnia’s ability to serve magazine paper pro-ducers by increasing our reinforcement pulp capacity. it also improves dependability of supply for this important pulp product, since the Rauma and Joutseno mills can serve as backups for each other.
With Rauma switching to eCF pulp production, the Kaskinen mill began to produce tCF softwood pulp for certain customers. this pulp constituted about 25% of Kaskinen’s output in 2008, however the demand is not suf-ficient. the production will be discontinued as the Kaskinen mill will be shut down. the low-AOX pulps produced today are elemental chlorine free. eCF is the preferred bleach-
Sourcing and operationsThe Sourcing and Operations Process
ing process today in terms of environmental safety and bleached pulp quality.
Efficiency, quality, and safetythe key to successful pulp production is maintaining a consistently high production rate with minimal distur-bances. One of the main metrics we use to monitor this is overall process availability, i.e. the percentage of time that the production systems are online and available for pulp production. in 2008, overall process availability was 95%. We have programmes underway to increase this to over 98%. the programmes are focused on minimizing process disturbances, on steady-state production and on improving the uptime of the production equipment.
Botnia has developed a quality management system that complements the mills’ certified quality systems. the main goal is to decrease deviations in prime quality pulps even during fluctuations in raw material quality or produc-tion starts and stops.
in terms of safety, Botnia has been average among Finnish pulp producers (21.8 work-related accidents per million working hours). since workplace safety is a major concern, we have chosen to focus on significant improve-ment in this area. We have initiated a company-wide safety programme which heightens our employees’ attitude and awareness about safety to reach our target of zero work-related accidents by the year 2012.
InvestmentsBotnia’s Fray Bentos mill is a showcase in the world for best available technologies and techniques. the Finnish mills also are in good technical shape. Consequently, investments made during the year were mostly normal development or environmentally centred. A new wash-ing system was installed at the Kemi mill to decrease the wastewater load and also to marginally increase the line’s capacity. At Rauma, an investment was made to eliminate flue gases from the smelt dissolving tank in the recovery boiler, which consequently reduces odours released to
18 19
sOuRCing AnD OPeRAtiOns sOuRCing AnD OPeRAtiOns
the atmosphere. in äänekoski, investments were made to modernize the chlorine dioxide plant to reduce the amount of AOX in bleach plant effluents.
Russian sawmillOOO svir timber, Botnia’s Russian subsidiary, has a modern sawmill located at Podporozhye in the Leningrad adminis-trative district. the project began in 2004 and the sawmill started up in 2006. Botnia also owns two wood harvesting companies to supply svir timber with roundwood.
the sawmill investment is part of Botnia’s strategy to become familiar with the forest resources in north-west Russia as a precursor for a possible mill installation at some time in the future. By starting with mechanical wood production, the company is learning how to man-age and operate a production facility in Russia and how to ensure the availability of high-quality raw materials for reinforcement pulp.
svir timber’s nominal design capacity is 200,000 cubic metres of spruce sawn goods per year. the market situation for sawn goods has turned down in 2008. Actual produc-tion of the sawmill in the year was 170,747 cubic metres.
Looking forwardForecasts are that raw material supply and market condi-tions will not allow all our Finnish mills to operate cost-
competitively at full capacity in 2009. We must adjust our production accordingly. spreading production cutbacks across all five of our mills in Finland would lower the ef-ficiency at each mill and significantly weaken the profit-ability of the company.
therefore, the company announced in november a decision to temporarily shut down the production of the Kaskinen mill during the first quarter of 2009 or closing of the mill. Kaskinen is the oldest of Botnia’s mills as far as technology is concerned, and it has the highest production costs. it has also been using greater quantities of imported wood than other Botnia mills. A formal proposal for the start of statutory negotiations as required by Finland’s Act on Cooperation in Companies was given in november 2008. the negotiations included 223 employees.the decision to shut down the mill completely during the first quarter of 2009 was made in January 2009.
several concurrent efficiency programmes are underway to decrease chemical consumption in the mills, e.g. precise process control of the bleaching operation and nominal wood consumption from the mill gate to the fin-ished goods warehouse, e.g. woodyard control and yield improvements in the pulp cooking process.
Production 2008Pulp mills, 1,000 tonnes Capacity Personnel*Year 2006 2007 2008 2008Fray Bentos 99 935 1,100 187Joutseno 571 583 523 650 174Kaskinen 413 404 400 450 191Kemi 533 550 515 575 206Rauma 532 519 493 630 121äänekoski 471 462 432 500 164Total 2,520 2,616 3,298 3,905 1,043Capacity utilization % 92 92 87Svir Timber sawn goods 1,000 m3 188 171 200 132
* Mill manning
Sourcing and Operations is responsible for procuring raw materials and producing products that meet customer quality requirements. Raw material shortages in Finland have made this a challenging year in terms of productive output and profitability.
the shortage of wood raw materials at competitive prices again led to production curtailments at our Finnish mills and eroded their profitability. Finnish mills fell short of their 2008 production target of 247,000 tonnes or about 8%. Actual production of the five mills in Finland was 2,363,086 tonnes (compared to 2,516,935 tonnes in 2007). Capacity utilization of the mills was 87% (compared to 92% for 2007). At the end of the year, all mills curtailed production due to the weak market situation.
Production in uruguay exceeded the first year’s target by 85,000 tonnes. Actual production of Fray Bentos for 2008 was 935,000 tonnes of bleached eucalyptus pulp.
sales to shareholders accounted for 60 percent of to-tal production, with the remaining 40 percent being sold on the market.
After the start-up of Rauma’s modernized bleaching process, the mill ceased to produce tCF pulp and now produces eCF pulp. By doing so, the pulp characteristics, particularly the strength characteristics, were signifi-cantly improved. this conversion of bleaching processes strengthens Botnia’s ability to serve magazine paper pro-ducers by increasing our reinforcement pulp capacity. it also improves dependability of supply for this important pulp product, since the Rauma and Joutseno mills can serve as backups for each other.
With Rauma switching to eCF pulp production, the Kaskinen mill began to produce tCF softwood pulp for certain customers. this pulp constituted about 25% of Kaskinen’s output in 2008, however the demand is not suf-ficient. the production will be discontinued as the Kaskinen mill will be shut down. the low-AOX pulps produced today are elemental chlorine free. eCF is the preferred bleach-
Sourcing and operationsThe Sourcing and Operations Process
ing process today in terms of environmental safety and bleached pulp quality.
Efficiency, quality, and safetythe key to successful pulp production is maintaining a consistently high production rate with minimal distur-bances. One of the main metrics we use to monitor this is overall process availability, i.e. the percentage of time that the production systems are online and available for pulp production. in 2008, overall process availability was 95%. We have programmes underway to increase this to over 98%. the programmes are focused on minimizing process disturbances, on steady-state production and on improving the uptime of the production equipment.
Botnia has developed a quality management system that complements the mills’ certified quality systems. the main goal is to decrease deviations in prime quality pulps even during fluctuations in raw material quality or produc-tion starts and stops.
in terms of safety, Botnia has been average among Finnish pulp producers (21.8 work-related accidents per million working hours). since workplace safety is a major concern, we have chosen to focus on significant improve-ment in this area. We have initiated a company-wide safety programme which heightens our employees’ attitude and awareness about safety to reach our target of zero work-related accidents by the year 2012.
InvestmentsBotnia’s Fray Bentos mill is a showcase in the world for best available technologies and techniques. the Finnish mills also are in good technical shape. Consequently, investments made during the year were mostly normal development or environmentally centred. A new wash-ing system was installed at the Kemi mill to decrease the wastewater load and also to marginally increase the line’s capacity. At Rauma, an investment was made to eliminate flue gases from the smelt dissolving tank in the recovery boiler, which consequently reduces odours released to
20 21
WOOD AVAiLABiLity AnD PRiCing ReMAins CRitiCAL issue WOOD AVAiLABiLity AnD PRiCing ReMAins CRitiCAL issue
in 2008, certified wood accounted for approximately 70% of wood consumed by Botnia’s mills. Verifying the origin of imported wood used by Finnish mills is the responsibility of Metsäliitto, which tracks the origin of all wood ship-ments that it delivers.
Sustainable, fast-growing plantationsBotnia produces and supplies most of the wood used by its Fray Bentos mill in uruguay through its subsidiary Forestal Oriental. Forestal Oriental’s activities cover plant breeding, forest establishment and management, wood harvest-ing and delivery to the mill. it is one of the major forestry companies in uruguay and its plantations are located at an economical transport distance from Fray Bentos. At the end of 2008, the company owned 191,595 hectares of land, of which about 60% has been planted or is suitable for planting. Plantings have been sustained in recent years at the rate of 15,000–17,000 hectares a year. the rate of planting exceeds the wood supply target.
the foundation of its sustainable development is its nursery, located about 100 kilometres north of Fray Bentos. the nursery can produce twenty million plants a year. the plants are produced from seeds and, to an increasing ex-tent, as clones from cuttings. the use of clones (vegetative propagation) offers opportunities for controlled develop-ment of both the growth characteristics of the trees and their technical fibre characteristics in papermaking.
the Fomento programme is aimed at private land owners who wish to diversify their enterprises to include forestry. it is expected that these land owners will produce about 20% of the mill’s raw material in the future. the farmers receive plants from Forestal Oriental’s nursery and Botnia contracts to buy their wood. Forestal Oriental offers sup-port in forest management, harvesting, and certification.
in 2001, the company was the first uruguayan com-pany to have its operations certified according to Forest stewardship Council (FsC) standard. Forestal Oriental has a major influence on the local economy and employment. it directly employs 350 people. A study in 2007 showed that in addition to direct jobs, some 2,000 indirect but permanent supplier jobs have been created.
Future prospectsDuring 2008, several closures of pulping capacity were announced in the nordic region. in addition, several more mills announced temporary curtailments of production. the impact of this is difficult to assess, but such actions will help restore a balance between available wood sup-plies and amount of pulp produced.
Russia’s intention to further increase the export duties for roundwood will significantly impair the cost-competi-tiveness of exported Russian wood in the future.
the remaining factor influencing wood procurement is the increased use of wood for energy production. Publicly subsidized projects that encourage the burning of biomass will inevitably raise the demand for wood. even though the decisions are considered national or local, they have im-pact throughout europe. Virgin wood resources procured for bioenergy compete directly with sawmills and pulp producers who are trying to first add value to the raw ma-terial, before later opportunities for energy generation and recycling, with the consequence that prices increase and availability decreases.
At full capacity, Botnia’s Finnish mills need 13.5 million cubic metres of wood per year. Fluctuations in the supply of wood raw materials, and corre-spond ing high prices, have a direct impact on Botnia’s entire delivery chain and the profitability of its operations. Meanwhile, fast-growing plantation wood supplies in Uruguay are sufficient for the Fray Bentos mill’s operations at full capacity.
Reserving and procuring wood for planned production is an important part of Botnia’s production planning sys-tem. the wood used by Botnia’s Finnish mills is procured and delivered by Metsäliitto Cooperative. the bulk of it is obtained from Finnish forests. in 2008, Botnia’s Finnish mills consumed 12.2 million cubic metres of wood (13.1 million cubic metres in 2007), of which wood from Finland accounted for 79% (82% in 2007). this supply has not been adequate to achieve our production targets. in addition, the supply shortages have caused a rapid rise in the cost of wood, which adversely impacted the profitability of our Finnish mills.
there was a pronounced shortage of birch, a large proportion of which is imported. the supply situation for birch is not expected to improve significantly in the near future. imported wood has come principally from Russia, the Baltic states, and sweden. two years ago, Russia began the process of increasing the export taxes on wood and the amount of wood imported from Russia is quickly decreasing.
the wood supply situation in uruguay is much more positive. Over the long term, about 70% of the wood used by the Fray Bentos mill will be obtained from Botnia’s own
plantations. the remainder will be purchased from planta-tions of private forest owners with long-term agreements.
Wood supply is going to be a limiting factor in the nordic countries for a number of years. this highlights the increasingly important role of ensuring adequacy of wood supplies and managing fluctuations in its availability.
Certified woodOf Botnia’s markets, europe regards the certification of wood raw material as very important. european customers generally require that their pulp is produced from certified wood and that the chain of custody is also certified. the Metsäliitto Cooperative, which supplies wood for Botnia, is one of the forerunners in promoting forest certification.
Most of the wood procured from Finland for Botnia’s Finnish mills is certified according to the Finnish Forest Certification system (FFCs) standard, which is endorsed by the international organization Programme for endorsement of Forest Certification (PeFC). in addition to the PeFC Chain of Custody, both Metsäliitto and Botnia have been awarded an FsC Chain of Custody and Controlled Wood certificate. the certificate covers Metsäliitto’s operations in all wood supply areas. it provides third-party verification that all wood raw material supplied by Metsäliitto meets FsC controlled wood standard criteria. With this certification, Botnia is able to report the share of FsC certified wood in its products.
Additionally, the wood procurement for svir timber was audited and received chain of custody certification. the sawmill provides wood chips to Joutseno mill’s produc-tion. in uruguay Botnia’s forest management operations are FsC certified and both Forestal Oriental and Botnia s.A. have FsC chain of custody certification that links the entire supply chain from wood production to the sale of eucalyptus pulp.
Wood availability and pricing remains critical issueWood Procurement
Wood consumption 2008 - Botnia pulp mills
1,000 m3
softwood pulpwood 7,024.5
Hardwood pulpwood 6,229.7
sawmill chips 2,169.3
sawdust 57.6
total consumption 15,481.1
20 21
WOOD AVAiLABiLity AnD PRiCing ReMAins CRitiCAL issue WOOD AVAiLABiLity AnD PRiCing ReMAins CRitiCAL issue
in 2008, certified wood accounted for approximately 70% of wood consumed by Botnia’s mills. Verifying the origin of imported wood used by Finnish mills is the responsibility of Metsäliitto, which tracks the origin of all wood ship-ments that it delivers.
Sustainable, fast-growing plantationsBotnia produces and supplies most of the wood used by its Fray Bentos mill in uruguay through its subsidiary Forestal Oriental. Forestal Oriental’s activities cover plant breeding, forest establishment and management, wood harvest-ing and delivery to the mill. it is one of the major forestry companies in uruguay and its plantations are located at an economical transport distance from Fray Bentos. At the end of 2008, the company owned 191,595 hectares of land, of which about 60% has been planted or is suitable for planting. Plantings have been sustained in recent years at the rate of 15,000–17,000 hectares a year. the rate of planting exceeds the wood supply target.
the foundation of its sustainable development is its nursery, located about 100 kilometres north of Fray Bentos. the nursery can produce twenty million plants a year. the plants are produced from seeds and, to an increasing ex-tent, as clones from cuttings. the use of clones (vegetative propagation) offers opportunities for controlled develop-ment of both the growth characteristics of the trees and their technical fibre characteristics in papermaking.
the Fomento programme is aimed at private land owners who wish to diversify their enterprises to include forestry. it is expected that these land owners will produce about 20% of the mill’s raw material in the future. the farmers receive plants from Forestal Oriental’s nursery and Botnia contracts to buy their wood. Forestal Oriental offers sup-port in forest management, harvesting, and certification.
in 2001, the company was the first uruguayan com-pany to have its operations certified according to Forest stewardship Council (FsC) standard. Forestal Oriental has a major influence on the local economy and employment. it directly employs 350 people. A study in 2007 showed that in addition to direct jobs, some 2,000 indirect but permanent supplier jobs have been created.
Future prospectsDuring 2008, several closures of pulping capacity were announced in the nordic region. in addition, several more mills announced temporary curtailments of production. the impact of this is difficult to assess, but such actions will help restore a balance between available wood sup-plies and amount of pulp produced.
Russia’s intention to further increase the export duties for roundwood will significantly impair the cost-competi-tiveness of exported Russian wood in the future.
the remaining factor influencing wood procurement is the increased use of wood for energy production. Publicly subsidized projects that encourage the burning of biomass will inevitably raise the demand for wood. even though the decisions are considered national or local, they have im-pact throughout europe. Virgin wood resources procured for bioenergy compete directly with sawmills and pulp producers who are trying to first add value to the raw ma-terial, before later opportunities for energy generation and recycling, with the consequence that prices increase and availability decreases.
At full capacity, Botnia’s Finnish mills need 13.5 million cubic metres of wood per year. Fluctuations in the supply of wood raw materials, and corre-spond ing high prices, have a direct impact on Botnia’s entire delivery chain and the profitability of its operations. Meanwhile, fast-growing plantation wood supplies in Uruguay are sufficient for the Fray Bentos mill’s operations at full capacity.
Reserving and procuring wood for planned production is an important part of Botnia’s production planning sys-tem. the wood used by Botnia’s Finnish mills is procured and delivered by Metsäliitto Cooperative. the bulk of it is obtained from Finnish forests. in 2008, Botnia’s Finnish mills consumed 12.2 million cubic metres of wood (13.1 million cubic metres in 2007), of which wood from Finland accounted for 79% (82% in 2007). this supply has not been adequate to achieve our production targets. in addition, the supply shortages have caused a rapid rise in the cost of wood, which adversely impacted the profitability of our Finnish mills.
there was a pronounced shortage of birch, a large proportion of which is imported. the supply situation for birch is not expected to improve significantly in the near future. imported wood has come principally from Russia, the Baltic states, and sweden. two years ago, Russia began the process of increasing the export taxes on wood and the amount of wood imported from Russia is quickly decreasing.
the wood supply situation in uruguay is much more positive. Over the long term, about 70% of the wood used by the Fray Bentos mill will be obtained from Botnia’s own
plantations. the remainder will be purchased from planta-tions of private forest owners with long-term agreements.
Wood supply is going to be a limiting factor in the nordic countries for a number of years. this highlights the increasingly important role of ensuring adequacy of wood supplies and managing fluctuations in its availability.
Certified woodOf Botnia’s markets, europe regards the certification of wood raw material as very important. european customers generally require that their pulp is produced from certified wood and that the chain of custody is also certified. the Metsäliitto Cooperative, which supplies wood for Botnia, is one of the forerunners in promoting forest certification.
Most of the wood procured from Finland for Botnia’s Finnish mills is certified according to the Finnish Forest Certification system (FFCs) standard, which is endorsed by the international organization Programme for endorsement of Forest Certification (PeFC). in addition to the PeFC Chain of Custody, both Metsäliitto and Botnia have been awarded an FsC Chain of Custody and Controlled Wood certificate. the certificate covers Metsäliitto’s operations in all wood supply areas. it provides third-party verification that all wood raw material supplied by Metsäliitto meets FsC controlled wood standard criteria. With this certification, Botnia is able to report the share of FsC certified wood in its products.
Additionally, the wood procurement for svir timber was audited and received chain of custody certification. the sawmill provides wood chips to Joutseno mill’s produc-tion. in uruguay Botnia’s forest management operations are FsC certified and both Forestal Oriental and Botnia s.A. have FsC chain of custody certification that links the entire supply chain from wood production to the sale of eucalyptus pulp.
Wood availability and pricing remains critical issueWood Procurement
Wood consumption 2008 - Botnia pulp mills
1,000 m3
softwood pulpwood 7,024.5
Hardwood pulpwood 6,229.7
sawmill chips 2,169.3
sawdust 57.6
total consumption 15,481.1
22 23
ResPOnsiBiLity
22 23
ResPOnsiBiLity
24 25
ResPOnsiBLe steWARDs OF iMPORtAnt Assets ResPOnsiBLe steWARDs OF iMPORtAnt Assets
by the Asamblea in Argentina after the mill’s start-up, but the general view of Argentina’s citizens seems to be more moderate as the mill has lived up to its environmental com-mitments. Botnia continues to do its best in giving informa-tion to all related stakeholders regarding its operations.
immediately after the mill started up in late 2007, a press centre was established in Fray Bentos to serve the media. During the first week, almost 100 interviews were given. We have had more than 1,800 visitors to the mill dur-ing the first year of operation, many also from Argentina. Visitors have included local and foreign universities; local and international journalists; local and foreign authorities; and local residents from Fray Bentos during special “open house” days. two displays were installed at Botnia’s office in the city centre of Fray Bentos where local people can follow changes in air quality in real-time.
the environmental and social Action Plan, issued to-gether with the international Finance Corporation (iFC), can be found at the Botnia website (www.botnia.com).
in August 2006, the uruguayan environmental authori-ties (DinAMA) issued a preliminary compliance monitor-ing plan for the Fray Bentos mill. Part of this plan included the formation of a Follow-up Commission to monitor the environmental performance of the mill. this commission includes the local municipality of Río negro, authorities, non governmental organizations (ngOs), citizens of the region, and representatives from Botnia. the commission can suggest any additional information to be reported and the means to make it available to the public.
Botnia’s subsidiary Forestal Oriental has also been at the forefront of raising the working conditions for forest workers, which have in general a poor reputation in south America. the trade union solidarity Centre of Finland (sAsK) conducted a study in cooperation with the uruguayan trade union Centre of Paper and Cellulose Workers (CuOPyC), the Chemical Workers’ union (stiQ), the national Construction and Allied trades union (sunCA), the union of Workers in the timber and Allied industries (sOiMA), and the uruguayan trade union Centre Pit-Cnt about the employment condi-tions of Forestal Oriental workers in uruguay. the report is quite positive regarding Botnia’s efforts. More information can be found at www.sask.fi.
the same open approach applies to our Finnish mills. We work to keep our stakeholders aware of what is happening at the mills at all times. in 2008, our Rauma and Joutseno mills organized “open house” days for local citizens. it is planned that the Kemi and äänekoski mills will sponsor similar programmes in 2009. All mill locations maintain a sponsorship budget which supports programmes for youth and sports teams.
EnvironmentalWe follow a strategy that links financial and environmental performance to create more value with less ecological im-pact. eco-efficiency allows us to use our resources more productively – from raw materials through energy to labour – thus offsetting the cost of reducing environmental impact. this makes us more competitive, not less.
Botnia’s approach to Corporate Social Responsibility (CSR) refers to our commitment to operate our businesses in a manner that recognizes the impact we have on employees, communities, and the environment. CSR includes a commitment to develop policies that integrate responsible practices into daily business operations, and to report on progress made toward implementing these practices. The foundation for this is the ability to make a sustainable profit in an ethical and productive way.
the forest products industry is an important basic industry, providing thousands of jobs that support several local commu-nities and producing paper and wood products which are vital to the growth and development of every country in the world.
the industry is also one of the users of renewable raw materials such as fresh water, energy, and forest fibres. sustainably managing raw materials to meet the demands of the world’s six billion people, while also meeting demands for renewable and greenhouse-neutral energy; ecosystem services; healthy livelihoods; wildlife habitat; climate pro-tection; recreation, and the cultural survival of indigenous peoples is not an easy undertaking. it requires cooperation, collaboration, firm policies, and a holistic view.
The basis for responsibilitysustainable development means meeting the needs of the present without compromising the ability of future genera-tions to meet their needs. there are three fundamental
pillars for sustainable development: economic growth, ecological balance, and social progress.
economic growth is essential. sustainable enterprises generate profits, which in turn generate the resources for re-ducing environmental impact and improving living standards. the structure of the forest products industry – a highly capital-intensive industry with long lead times – is a reflection of long-term measures and sustainability through economic cycles.
From a “big picture” perspective, the decision to close the Kaskinen mill is a matter of economic sustainability. While it may have a negative local impact for the work-ers involved in the short term, it is essential in terms of strengthening the economic position of the whole com-pany. Responsibility comes from the way that we handle these negotiations and take actions that are sensitive to the needs of workers and local communities.
Socialin a global market, all businesses have to deal with more, and potentially conflicting, demands from stakeholders: customers, shareholders, regulators, employees, finan-ciers, pressure groups, and members of the general public.
We intend to live up to our responsibilities as a global citizen and a local neighbour in the communities where we operate. integrity, sound values, and a long-term approach offer clear business benefits.
Open dialogue with our stakeholders is essential. nowhere has this been more evident than at our Fray Bentos mill in uruguay. Active opposition to the mill project has continued
Responsible stewards of important assetsCorporate Social Responsibility
Amount of stakeholders visiting Botnia mills in 2008 (persons)Fray Bentos 1,860Joutseno 420Kaskinen 460Kemi 407Rauma 3,500äänekoski 820
24 25
ResPOnsiBLe steWARDs OF iMPORtAnt Assets ResPOnsiBLe steWARDs OF iMPORtAnt Assets
by the Asamblea in Argentina after the mill’s start-up, but the general view of Argentina’s citizens seems to be more moderate as the mill has lived up to its environmental com-mitments. Botnia continues to do its best in giving informa-tion to all related stakeholders regarding its operations.
immediately after the mill started up in late 2007, a press centre was established in Fray Bentos to serve the media. During the first week, almost 100 interviews were given. We have had more than 1,800 visitors to the mill dur-ing the first year of operation, many also from Argentina. Visitors have included local and foreign universities; local and international journalists; local and foreign authorities; and local residents from Fray Bentos during special “open house” days. two displays were installed at Botnia’s office in the city centre of Fray Bentos where local people can follow changes in air quality in real-time.
the environmental and social Action Plan, issued to-gether with the international Finance Corporation (iFC), can be found at the Botnia website (www.botnia.com).
in August 2006, the uruguayan environmental authori-ties (DinAMA) issued a preliminary compliance monitor-ing plan for the Fray Bentos mill. Part of this plan included the formation of a Follow-up Commission to monitor the environmental performance of the mill. this commission includes the local municipality of Río negro, authorities, non governmental organizations (ngOs), citizens of the region, and representatives from Botnia. the commission can suggest any additional information to be reported and the means to make it available to the public.
Botnia’s subsidiary Forestal Oriental has also been at the forefront of raising the working conditions for forest workers, which have in general a poor reputation in south America. the trade union solidarity Centre of Finland (sAsK) conducted a study in cooperation with the uruguayan trade union Centre of Paper and Cellulose Workers (CuOPyC), the Chemical Workers’ union (stiQ), the national Construction and Allied trades union (sunCA), the union of Workers in the timber and Allied industries (sOiMA), and the uruguayan trade union Centre Pit-Cnt about the employment condi-tions of Forestal Oriental workers in uruguay. the report is quite positive regarding Botnia’s efforts. More information can be found at www.sask.fi.
the same open approach applies to our Finnish mills. We work to keep our stakeholders aware of what is happening at the mills at all times. in 2008, our Rauma and Joutseno mills organized “open house” days for local citizens. it is planned that the Kemi and äänekoski mills will sponsor similar programmes in 2009. All mill locations maintain a sponsorship budget which supports programmes for youth and sports teams.
EnvironmentalWe follow a strategy that links financial and environmental performance to create more value with less ecological im-pact. eco-efficiency allows us to use our resources more productively – from raw materials through energy to labour – thus offsetting the cost of reducing environmental impact. this makes us more competitive, not less.
Botnia’s approach to Corporate Social Responsibility (CSR) refers to our commitment to operate our businesses in a manner that recognizes the impact we have on employees, communities, and the environment. CSR includes a commitment to develop policies that integrate responsible practices into daily business operations, and to report on progress made toward implementing these practices. The foundation for this is the ability to make a sustainable profit in an ethical and productive way.
the forest products industry is an important basic industry, providing thousands of jobs that support several local commu-nities and producing paper and wood products which are vital to the growth and development of every country in the world.
the industry is also one of the users of renewable raw materials such as fresh water, energy, and forest fibres. sustainably managing raw materials to meet the demands of the world’s six billion people, while also meeting demands for renewable and greenhouse-neutral energy; ecosystem services; healthy livelihoods; wildlife habitat; climate pro-tection; recreation, and the cultural survival of indigenous peoples is not an easy undertaking. it requires cooperation, collaboration, firm policies, and a holistic view.
The basis for responsibilitysustainable development means meeting the needs of the present without compromising the ability of future genera-tions to meet their needs. there are three fundamental
pillars for sustainable development: economic growth, ecological balance, and social progress.
economic growth is essential. sustainable enterprises generate profits, which in turn generate the resources for re-ducing environmental impact and improving living standards. the structure of the forest products industry – a highly capital-intensive industry with long lead times – is a reflection of long-term measures and sustainability through economic cycles.
From a “big picture” perspective, the decision to close the Kaskinen mill is a matter of economic sustainability. While it may have a negative local impact for the work-ers involved in the short term, it is essential in terms of strengthening the economic position of the whole com-pany. Responsibility comes from the way that we handle these negotiations and take actions that are sensitive to the needs of workers and local communities.
Socialin a global market, all businesses have to deal with more, and potentially conflicting, demands from stakeholders: customers, shareholders, regulators, employees, finan-ciers, pressure groups, and members of the general public.
We intend to live up to our responsibilities as a global citizen and a local neighbour in the communities where we operate. integrity, sound values, and a long-term approach offer clear business benefits.
Open dialogue with our stakeholders is essential. nowhere has this been more evident than at our Fray Bentos mill in uruguay. Active opposition to the mill project has continued
Responsible stewards of important assetsCorporate Social Responsibility
Amount of stakeholders visiting Botnia mills in 2008 (persons)Fray Bentos 1,860Joutseno 420Kaskinen 460Kemi 407Rauma 3,500äänekoski 820
26 27
ResPOnsiBLe steWARDs OF iMPORtAnt Assets “A VeRy nOBLe PuRPOse”
Botnia recognizes that it plays a significant role in the communities in which it operates: not only as a generator of jobs, but also as a catalyst for development in the surrounding communities. For the Fray Bentos region in Uruguay, we formed the Botnia Foundation (Fundación Botnia) to implement actions focused on respect for ethics, workers, communities, health, environment, and sustainable development. Roberto Symonds is Chairman of the Board of Directors of Fundación Botnia and gives his views about the exciting work being done.
“My name is Roberto symonds. i was born in Montevideo 66 years ago. i am married, have four grown children and eight grandchildren.
i have spent my entire career in agriculture. i hold a university degree as an Agricultural engineer and then worked for 15 years at our national Agriculture Research Centre (La estanzuela). During this time, i completed post-degree courses at several universities in the usA. i am a director of the uruguay Farmers Association (Asociación Rural del uruguay) and have also been the association’s president. i am also a director of our national seed institute (inAse) and was a member of the Board of our national Agriculture Research institute (iniA) among other activities.
i own a farm in Río negro, near Fray Bentos. i was in-vited to join the Board of Fundación Botnia as an independ-ent Director. i accepted the invitation because i believe the Fundación has very noble purposes which will contribute to the social and economic development of this area – an area where i have my farm and where i have lived great part of my life.
the main purpose of the Fundación is to promote em-ployment opportunities through education and training; while fostering a healthy lifestyle. My main responsibility as a Board member is to help decide and prioritize which projects will be supported by the Fundación, and to ensure that we make efficient use of available resources.
We do our work by coordinating with “local agents,” which are the social organizations, public institutions, and other authorities which act within the communities. it is not our intent to lead these processes, since the commu-nities themselves know what is best for their growth and development.
today, the most pressing issue facing the region is education and training. With proper education, local peo-ple will be able to seek better job opportunities and will help promote commercial activities and tourism in the area. Fundación Botnia is helping to provide solutions by prioritizing projects, partly funding them, and monitoring the effectiveness of this support.
i am very proud that Fundación Botnia has supported programmes which have been able to reach more than 60 different localities in this area. the Fundación is becoming well known in the region.
We are always looking to uncover that really important and transcendent project which will benefit the region for many years to come. My personal dream for the Fundacion is that we can help develop the rural areas of our region so that they can have the same social, economic, and edu-cational opportunities as our urban populations. this is a long-term activity, but we are working on it.”
“A very noble purpose”
CAseBotnia Foundation
Botnia is helping to achieve ecological balance and economic growth through: 1) technologies which move from costly end-of-pipe solutions to approaches that pre-vent pollution in the first place; 2) processes that use the by-products of one process as raw materials for another, thus creating zero waste; and 3) new approaches which al-low more efficient utilization of labour. the products made from our pulp are, to a large extent, recyclable.
Wastewater discharges, emissions to the air, and solid waste generation are the main environmental issues for the pulping sector. While our production systems re-use process chemicals, wood residues, and energy, it is inevi-table that our mills will have some impact on the environ-ment. We take extensive measures to contain processes, clean emissions, and minimize the environmental impact.
in Forestal Oriental, we are working together with a local ngO to find non-chemical ways to fight the infestation of ants, which eat the leaves of young eucalyptus plants, causing them to die. By cooperating to find other solutions, we can reduce the use of agricultural chemicals in our forestry operations.
Transparent reportingthe united nations global Compact (ungC) is a strategic initiative for businesses that are committed to aligning their operations with universally accepted principles in the areas of human rights, labour, environment, and anti-corruption. By doing so, businesses can help ensure that markets, commerce, technology, and finance advance in ways that benefit economies and societies everywhere. Botnia is com-mitted to supporting the 10 universally accepted principles (www.unglobalcompact.org) and we expect the same level of commitment from our suppliers and partners.
Wherever possible, we follow the global Reporting initiative (gRi) guidelines and protocols for reporting en-vironmental and personnel information. gRi is a multi-stakeholder process which publishes a set of common, globally applicable CsR/sustainability reporting guidelines. A comparison of Botnia’s reporting and gRi recommenda-tions can be found in the table on page 42 of this report.
Botnia issues information about its activities and objec-tives through several platforms. its customer magazine, Botnia echo, appeared three times in 2008 in Finnish, english, and
german. its staff magazine, Me Botnialaiset, appeared six times in Finnish. Both publications are available from Botnia’s web site, where the company’s press releases are also published. in 2009 the magazine concept will be renewed to better meet the needs of a more international audience. the web pages can be read in Finnish, english, spanish, and Russian.
espacio, a spanish-language publication for stakehold-ers, has conveyed a broad spectrum of information about the Fray Bentos project and its regional impact. supporting the magazine has been the monthly espacio television pro-gramme, which is also visible in the entre Rios province in Argentina. Communications in uruguay have included regu-lar releases to the media, events for public education and discussion, and timely responses to any inquiries.
in April, Botnia launched a travelling exhibition called espacio móvil in Fray Bentos. this exhibition provides and shares information about the entire pulp production proc-ess: from the planting of eucalyptus seedlings at the tree nursery to the utilization of pulp in paper, tissue, and board products at paper mills in europe and Asia. espacio Ciencia at the LAtu (technical Research institute in uruguay) was in charge of the development and implementation of the project, which includes games, explanations and recreational activities so that all visitors learn about the pulp production process and also about environmental care. During the year, espacio móvil visited 27 communities and the number of visitors exceeded 40,000 people.
in Russia a magazine for employees and stakeholders is produced jointly by svir timber and the local organiza-tion of the Metsäliitto group. svir timber participates in activities with the surrounding communities in the same way as Botnia does in Finland and uruguay.
the principles and commitment of Botnia for corporate responsibility, as well as our policies can be found on our web pages www.botnia.com.
26 27
ResPOnsiBLe steWARDs OF iMPORtAnt Assets “A VeRy nOBLe PuRPOse”
Botnia recognizes that it plays a significant role in the communities in which it operates: not only as a generator of jobs, but also as a catalyst for development in the surrounding communities. For the Fray Bentos region in Uruguay, we formed the Botnia Foundation (Fundación Botnia) to implement actions focused on respect for ethics, workers, communities, health, environment, and sustainable development. Roberto Symonds is Chairman of the Board of Directors of Fundación Botnia and gives his views about the exciting work being done.
“My name is Roberto symonds. i was born in Montevideo 66 years ago. i am married, have four grown children and eight grandchildren.
i have spent my entire career in agriculture. i hold a university degree as an Agricultural engineer and then worked for 15 years at our national Agriculture Research Centre (La estanzuela). During this time, i completed post-degree courses at several universities in the usA. i am a director of the uruguay Farmers Association (Asociación Rural del uruguay) and have also been the association’s president. i am also a director of our national seed institute (inAse) and was a member of the Board of our national Agriculture Research institute (iniA) among other activities.
i own a farm in Río negro, near Fray Bentos. i was in-vited to join the Board of Fundación Botnia as an independ-ent Director. i accepted the invitation because i believe the Fundación has very noble purposes which will contribute to the social and economic development of this area – an area where i have my farm and where i have lived great part of my life.
the main purpose of the Fundación is to promote em-ployment opportunities through education and training; while fostering a healthy lifestyle. My main responsibility as a Board member is to help decide and prioritize which projects will be supported by the Fundación, and to ensure that we make efficient use of available resources.
We do our work by coordinating with “local agents,” which are the social organizations, public institutions, and other authorities which act within the communities. it is not our intent to lead these processes, since the commu-nities themselves know what is best for their growth and development.
today, the most pressing issue facing the region is education and training. With proper education, local peo-ple will be able to seek better job opportunities and will help promote commercial activities and tourism in the area. Fundación Botnia is helping to provide solutions by prioritizing projects, partly funding them, and monitoring the effectiveness of this support.
i am very proud that Fundación Botnia has supported programmes which have been able to reach more than 60 different localities in this area. the Fundación is becoming well known in the region.
We are always looking to uncover that really important and transcendent project which will benefit the region for many years to come. My personal dream for the Fundacion is that we can help develop the rural areas of our region so that they can have the same social, economic, and edu-cational opportunities as our urban populations. this is a long-term activity, but we are working on it.”
“A very noble purpose”
CAseBotnia Foundation
Botnia is helping to achieve ecological balance and economic growth through: 1) technologies which move from costly end-of-pipe solutions to approaches that pre-vent pollution in the first place; 2) processes that use the by-products of one process as raw materials for another, thus creating zero waste; and 3) new approaches which al-low more efficient utilization of labour. the products made from our pulp are, to a large extent, recyclable.
Wastewater discharges, emissions to the air, and solid waste generation are the main environmental issues for the pulping sector. While our production systems re-use process chemicals, wood residues, and energy, it is inevi-table that our mills will have some impact on the environ-ment. We take extensive measures to contain processes, clean emissions, and minimize the environmental impact.
in Forestal Oriental, we are working together with a local ngO to find non-chemical ways to fight the infestation of ants, which eat the leaves of young eucalyptus plants, causing them to die. By cooperating to find other solutions, we can reduce the use of agricultural chemicals in our forestry operations.
Transparent reportingthe united nations global Compact (ungC) is a strategic initiative for businesses that are committed to aligning their operations with universally accepted principles in the areas of human rights, labour, environment, and anti-corruption. By doing so, businesses can help ensure that markets, commerce, technology, and finance advance in ways that benefit economies and societies everywhere. Botnia is com-mitted to supporting the 10 universally accepted principles (www.unglobalcompact.org) and we expect the same level of commitment from our suppliers and partners.
Wherever possible, we follow the global Reporting initiative (gRi) guidelines and protocols for reporting en-vironmental and personnel information. gRi is a multi-stakeholder process which publishes a set of common, globally applicable CsR/sustainability reporting guidelines. A comparison of Botnia’s reporting and gRi recommenda-tions can be found in the table on page 42 of this report.
Botnia issues information about its activities and objec-tives through several platforms. its customer magazine, Botnia echo, appeared three times in 2008 in Finnish, english, and
german. its staff magazine, Me Botnialaiset, appeared six times in Finnish. Both publications are available from Botnia’s web site, where the company’s press releases are also published. in 2009 the magazine concept will be renewed to better meet the needs of a more international audience. the web pages can be read in Finnish, english, spanish, and Russian.
espacio, a spanish-language publication for stakehold-ers, has conveyed a broad spectrum of information about the Fray Bentos project and its regional impact. supporting the magazine has been the monthly espacio television pro-gramme, which is also visible in the entre Rios province in Argentina. Communications in uruguay have included regu-lar releases to the media, events for public education and discussion, and timely responses to any inquiries.
in April, Botnia launched a travelling exhibition called espacio móvil in Fray Bentos. this exhibition provides and shares information about the entire pulp production proc-ess: from the planting of eucalyptus seedlings at the tree nursery to the utilization of pulp in paper, tissue, and board products at paper mills in europe and Asia. espacio Ciencia at the LAtu (technical Research institute in uruguay) was in charge of the development and implementation of the project, which includes games, explanations and recreational activities so that all visitors learn about the pulp production process and also about environmental care. During the year, espacio móvil visited 27 communities and the number of visitors exceeded 40,000 people.
in Russia a magazine for employees and stakeholders is produced jointly by svir timber and the local organiza-tion of the Metsäliitto group. svir timber participates in activities with the surrounding communities in the same way as Botnia does in Finland and uruguay.
the principles and commitment of Botnia for corporate responsibility, as well as our policies can be found on our web pages www.botnia.com.
28 29
OPening DOORs tO A LARgeR POint OF VieW OPening DOORs tO A LARgeR POint OF VieW
manage our expanding global business, Botnia needs in-creasingly in-depth business skills and managerial talent.
Key personnel, as identified by Competence Centre man-agers based upon certain criteria, are invited to participate in an extensive development programme to improve their competence in the areas of leadership, communications, and values. the first step is an evaluation and assessment process for each individual. From this, we draw up devel-opment plans and succession plans so that each person has defined developmental targets for the next three to five years. in Russia, we started this programme in september with the evaluation of 10 key persons, and in uruguay the process will be started in 2009.
From a development point of view, the most impor-tant target is to improve the business understanding of our people. the Botnia Business Academy, which was initiated in 2007 and continued this year, is designed to ac-complish this. there are two versions of the Academy: one for key personnel and company managers, and a second for mill locations.
Academy sessions for key personnel are divided into four sections of two days each: global business from a customer’s perspective; resources; environmental issues; management model of strategic partners; economics; financial and cost-efficient pulp production; customer
service; and management/leadership issues. Botnia’s top managers are actively involved as are outside experts who give the participants fresh perspectives. A two-day course is held for people at all mill locations.
in Finland, about 150 people have participated in the development programme. At each mill site, a two-day ver-sion of the Academy was conducted, where several dozen more participants were included. in 2009, we plan to extend the programme to our uruguayan operations.
Job rotationWith the goal of circulating knowledge and learning inside the company, we actively encourage job rotation to expose our people to various operations and situations. this en-courages company-wide cooperation and a broader view of our business – in addition to offering new challenges and opportunities for our individuals.
Support for multi-skilling in the millsAll of Botnia’s mills utilize the concept of multi-skilling – where production workers are responsible for running a broader range of processes and also carry out defined maintenance and repair tasks.
Human Resources supports this multi-skilling effort with a training programme which is conducted outside
Human Resource development supports the business strategy and helps to lay the foundation for Botnia’s growth as an international operation. With 50% of Botnia’s employees now located outside of Finland, employees need new skills and new perspectives in order to excel.
the key areas of focus within the Human Resources or-ganization are the planning and allocation of resources; and the systematic development of competence through-out the organization at all levels. We set yearly targets for personnel development in cooperation with our managers and supervisors.
One business operating modelthe greatest challenge continues to be putting the Botnia operating model fully into practice in uruguay. in principal, the same Core Processes, Competence Centres, and tools are applied in uruguay. Practically speaking, more train-ing and communications are required to fully integrate the model due to the challenges of time, distance, language, and culture. Front-line supervisors have a most important role to play in anchoring the model in everyday operations. these supervisors have witnessed Botnia’s operating model firsthand during their training in Finland.
since the start-up of the Fray Bentos mill, responsi-bility for running the mill has been systematically trans-ferred to uruguayan managers and supervisors. Only four members of the Finnish project team remain in uruguay to provide transitional support. the remainder have re-turned to Finland.
the inclusion of Forestal Oriental, Botnia’s forest plantation and wood supply subsidiary in uruguay, brings new skills to the Botnia organization. the development of competence in the forestry operations follows the same principles and tools as at Botnia mills.
Botnia is participating with others in developing for-est industry training in uruguay. together with the state of uruguay and Finland’s Finnpartnership programme and other forest cluster companies, a masters study pro-gramme in pulp and paper technology is being financed. instruction is being conducted in cooperation with the Helsinki university of technology and uruguay’s nation-al universidad de la República. Botnia and other forest cluster companies provide experts who are responsible for some of the teaching.
Development of key personnelHuman Resources is continuing its programme to recruit and develop key personnel for future business needs. to
Opening doors to a larger point of viewHuman Resources
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Personnel
2004 2005 2006 2007 2008
■ Pulp, Finland ■ Pulp, Uruguay■ Forestry ■ Sawmill (mechanical)■ Others
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Personnel survey, overall index %
2004 2005 2006* 2007 2008
the personnel survey measures the standard of the work of superiors and the success of the working community.
* the small decrease is partly caused by new, more challenging questions
0
5
10
15
20
25
21–2
5
26–3
0
31–3
5
36–4
0
41–4
5
46–5
0
51–5
5
56–6
0
> 60
Age structure of employees* %
* Only permanent employees in Finland * Average number / million work hours, includes also 0-work accidents (mills)
0
5
10
15
20
25
30
35
40
Number of accidents at work/on work-related journeys*
2004 2005 2006 2007 20080
100
200
300
400
500
600
Trainees and summer workers
2004 2005 2006* 2007 2008
■ Long-term ■ Short-term
* Decrease in number is caused by the transfer of maintenance services to BMs
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Safety observations and near misses* Average
2004 2005 2006 2007 2008
* new safety monitoring system adopted in 2007 to pre-emptively record even minor risk factors. since 2008 also safety observations are recorded.
28 29
OPening DOORs tO A LARgeR POint OF VieW OPening DOORs tO A LARgeR POint OF VieW
manage our expanding global business, Botnia needs in-creasingly in-depth business skills and managerial talent.
Key personnel, as identified by Competence Centre man-agers based upon certain criteria, are invited to participate in an extensive development programme to improve their competence in the areas of leadership, communications, and values. the first step is an evaluation and assessment process for each individual. From this, we draw up devel-opment plans and succession plans so that each person has defined developmental targets for the next three to five years. in Russia, we started this programme in september with the evaluation of 10 key persons, and in uruguay the process will be started in 2009.
From a development point of view, the most impor-tant target is to improve the business understanding of our people. the Botnia Business Academy, which was initiated in 2007 and continued this year, is designed to ac-complish this. there are two versions of the Academy: one for key personnel and company managers, and a second for mill locations.
Academy sessions for key personnel are divided into four sections of two days each: global business from a customer’s perspective; resources; environmental issues; management model of strategic partners; economics; financial and cost-efficient pulp production; customer
service; and management/leadership issues. Botnia’s top managers are actively involved as are outside experts who give the participants fresh perspectives. A two-day course is held for people at all mill locations.
in Finland, about 150 people have participated in the development programme. At each mill site, a two-day ver-sion of the Academy was conducted, where several dozen more participants were included. in 2009, we plan to extend the programme to our uruguayan operations.
Job rotationWith the goal of circulating knowledge and learning inside the company, we actively encourage job rotation to expose our people to various operations and situations. this en-courages company-wide cooperation and a broader view of our business – in addition to offering new challenges and opportunities for our individuals.
Support for multi-skilling in the millsAll of Botnia’s mills utilize the concept of multi-skilling – where production workers are responsible for running a broader range of processes and also carry out defined maintenance and repair tasks.
Human Resources supports this multi-skilling effort with a training programme which is conducted outside
Human Resource development supports the business strategy and helps to lay the foundation for Botnia’s growth as an international operation. With 50% of Botnia’s employees now located outside of Finland, employees need new skills and new perspectives in order to excel.
the key areas of focus within the Human Resources or-ganization are the planning and allocation of resources; and the systematic development of competence through-out the organization at all levels. We set yearly targets for personnel development in cooperation with our managers and supervisors.
One business operating modelthe greatest challenge continues to be putting the Botnia operating model fully into practice in uruguay. in principal, the same Core Processes, Competence Centres, and tools are applied in uruguay. Practically speaking, more train-ing and communications are required to fully integrate the model due to the challenges of time, distance, language, and culture. Front-line supervisors have a most important role to play in anchoring the model in everyday operations. these supervisors have witnessed Botnia’s operating model firsthand during their training in Finland.
since the start-up of the Fray Bentos mill, responsi-bility for running the mill has been systematically trans-ferred to uruguayan managers and supervisors. Only four members of the Finnish project team remain in uruguay to provide transitional support. the remainder have re-turned to Finland.
the inclusion of Forestal Oriental, Botnia’s forest plantation and wood supply subsidiary in uruguay, brings new skills to the Botnia organization. the development of competence in the forestry operations follows the same principles and tools as at Botnia mills.
Botnia is participating with others in developing for-est industry training in uruguay. together with the state of uruguay and Finland’s Finnpartnership programme and other forest cluster companies, a masters study pro-gramme in pulp and paper technology is being financed. instruction is being conducted in cooperation with the Helsinki university of technology and uruguay’s nation-al universidad de la República. Botnia and other forest cluster companies provide experts who are responsible for some of the teaching.
Development of key personnelHuman Resources is continuing its programme to recruit and develop key personnel for future business needs. to
Opening doors to a larger point of viewHuman Resources
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Personnel
2004 2005 2006 2007 2008
■ Pulp, Finland ■ Pulp, Uruguay■ Forestry ■ Sawmill (mechanical)■ Others
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
Personnel survey, overall index %
2004 2005 2006* 2007 2008
the personnel survey measures the standard of the work of superiors and the success of the working community.
* the small decrease is partly caused by new, more challenging questions
0
5
10
15
20
25
21–2
5
26–3
0
31–3
5
36–4
0
41–4
5
46–5
0
51–5
5
56–6
0
> 60
Age structure of employees* %
* Only permanent employees in Finland * Average number / million work hours, includes also 0-work accidents (mills)
0
5
10
15
20
25
30
35
40
Number of accidents at work/on work-related journeys*
2004 2005 2006 2007 20080
100
200
300
400
500
600
Trainees and summer workers
2004 2005 2006* 2007 2008
■ Long-term ■ Short-term
* Decrease in number is caused by the transfer of maintenance services to BMs
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Safety observations and near misses* Average
2004 2005 2006 2007 2008
* new safety monitoring system adopted in 2007 to pre-emptively record even minor risk factors. since 2008 also safety observations are recorded.
30 31
OPening DOORs tO A LARgeR POint OF VieW eMPLOyees DisCuss inDiViDuAL AnD COLLeCtiVe ResPOnsiBiLities
Each year, Botnia conducts a survey of personnel in its Finnish operations. This year, it was extended to the Russian subsidiary, Svir Timber. The target is to improve work processes by better understanding employee attitudes. Svir Timber’s employees embraced the process and are actively engaged in optimizing their work processes and performance.
FeniX Consulting of Finland has helped Botnia conduct personnel surveys and present the results to employees and management for several years. By using an outside consultant, Botnia employees are guaranteed confidentiality and feel secure to openly express their opinions.
this type of employee involvement is not so common in Russian companies, but is fully supported by Botnia’s principles regarding open dialogue and creating meaningful work opportunities throughout the company’s operations.
the main purpose of the annual survey is to under-stand shifts in employee attitudes about the company and to uncover potential problem areas that might detract from optimum work processes. since this was the first survey of svir timber’s 130 employees, it set the benchmark for future measurements.
Phase one of the survey consisted of a written question-naire that was completed anonymously by all svir timber employees in January. Certain themes emerged which were probed deeper in personal interviews:
• Attitudes about the future of the company• understanding of the company’s mission and targets• How to improve work processes and methods• Readiness to improve individual skills• Collective and individual responsibilities• Working environment and atmosphere
in February and March, FeniX conducted interviews with an employee from each production department and the general office to clarify the issues and gather more de-tailed responses. Again, these interviews were conducted confidentially.
survey results showed that there was a very good working atmosphere between workers, but as might be predicted due to Russian history, the work emphasis at svir was more focused on collective, rather than individual, responsibility. striking the right balance between individual contributions and working cooperatively in a team was chosen as an area for improvement.
Managers of the nine departments held meetings with their employees in April to decide upon three to five improvement actions that they could take over the next 12 months. Responsibilities were assigned, timetables were agreed upon, and ways to measure progress were defined.
employees were fully engaged in the discussions – sug-gesting new ideas and looking for solutions. they viewed this process as very positive and now better understand the direct impact that each person has on the overall suc-cess of their company.
employees discuss individual and collective responsibilities
CAsePersonnel survey in Russia
of normal working hours. During 2008, about 295 people received this training. Participants can choose specific courses or can elect to complete the entire programme, which leads to further vocational qualifications and has a positive impact on salary.
Organization functionality measurementsince 2003, we have conducted annual personnel surveys to measure how effectively we have implemented our strategy and how employees feel about their operating conditions and development targets. Botnia employees are asked to evaluate matters such as the quality of development dis-cussions, feedback on management practices, and how well their team is functioning.
the collective feedback from these surveys gives us an increasingly precise measure of our continuing devel-opment. the critical strengths and areas for improvement are identified and management selects the key themes and measures to monitor the results. One area identified is improving the quality of development discussions. With the generational change occurring in industry, another
important area is improving the transfer of knowledge to the next generation of Botnia’s workers. Mentoring is an important way of transferring tacit knowledge and has been actively utilized in uruguay as the original project team returns to Finland.
Vocational safetyAll Botnia mills have defined safety targets and use unified criteria for monitoring workplace safety. the programmes are effective in that, on average, Botnia’s work-related accidents are within the range of other pulp producers. However, being average in this regard is not acceptable within the overall vision of being the world’s best producer.
Late in 2008, we began a new initiative to drive the frequency of work-related accidents to zero by the year 2012. this is an extremely ambitious goal. to support this, a new safety observation system has been employed that seeks to pre-emptively detect even small sources of potential danger and prevent accidents before they occur. Accompanying this are programmes to reinforce positive attitudes and actions of all employees.
0
1
2
3
4
5
6
Sickness leave* %
2004 2005 2006 2007 2008
* Percentage of the theoretical regular working hours
* Average number of training days per employee
0
1
2
3
4
5
6
Training days*
2004 2005 2006 2007 2008
30 31
OPening DOORs tO A LARgeR POint OF VieW eMPLOyees DisCuss inDiViDuAL AnD COLLeCtiVe ResPOnsiBiLities
Each year, Botnia conducts a survey of personnel in its Finnish operations. This year, it was extended to the Russian subsidiary, Svir Timber. The target is to improve work processes by better understanding employee attitudes. Svir Timber’s employees embraced the process and are actively engaged in optimizing their work processes and performance.
FeniX Consulting of Finland has helped Botnia conduct personnel surveys and present the results to employees and management for several years. By using an outside consultant, Botnia employees are guaranteed confidentiality and feel secure to openly express their opinions.
this type of employee involvement is not so common in Russian companies, but is fully supported by Botnia’s principles regarding open dialogue and creating meaningful work opportunities throughout the company’s operations.
the main purpose of the annual survey is to under-stand shifts in employee attitudes about the company and to uncover potential problem areas that might detract from optimum work processes. since this was the first survey of svir timber’s 130 employees, it set the benchmark for future measurements.
Phase one of the survey consisted of a written question-naire that was completed anonymously by all svir timber employees in January. Certain themes emerged which were probed deeper in personal interviews:
• Attitudes about the future of the company• understanding of the company’s mission and targets• How to improve work processes and methods• Readiness to improve individual skills• Collective and individual responsibilities• Working environment and atmosphere
in February and March, FeniX conducted interviews with an employee from each production department and the general office to clarify the issues and gather more de-tailed responses. Again, these interviews were conducted confidentially.
survey results showed that there was a very good working atmosphere between workers, but as might be predicted due to Russian history, the work emphasis at svir was more focused on collective, rather than individual, responsibility. striking the right balance between individual contributions and working cooperatively in a team was chosen as an area for improvement.
Managers of the nine departments held meetings with their employees in April to decide upon three to five improvement actions that they could take over the next 12 months. Responsibilities were assigned, timetables were agreed upon, and ways to measure progress were defined.
employees were fully engaged in the discussions – sug-gesting new ideas and looking for solutions. they viewed this process as very positive and now better understand the direct impact that each person has on the overall suc-cess of their company.
employees discuss individual and collective responsibilities
CAsePersonnel survey in Russia
of normal working hours. During 2008, about 295 people received this training. Participants can choose specific courses or can elect to complete the entire programme, which leads to further vocational qualifications and has a positive impact on salary.
Organization functionality measurementsince 2003, we have conducted annual personnel surveys to measure how effectively we have implemented our strategy and how employees feel about their operating conditions and development targets. Botnia employees are asked to evaluate matters such as the quality of development dis-cussions, feedback on management practices, and how well their team is functioning.
the collective feedback from these surveys gives us an increasingly precise measure of our continuing devel-opment. the critical strengths and areas for improvement are identified and management selects the key themes and measures to monitor the results. One area identified is improving the quality of development discussions. With the generational change occurring in industry, another
important area is improving the transfer of knowledge to the next generation of Botnia’s workers. Mentoring is an important way of transferring tacit knowledge and has been actively utilized in uruguay as the original project team returns to Finland.
Vocational safetyAll Botnia mills have defined safety targets and use unified criteria for monitoring workplace safety. the programmes are effective in that, on average, Botnia’s work-related accidents are within the range of other pulp producers. However, being average in this regard is not acceptable within the overall vision of being the world’s best producer.
Late in 2008, we began a new initiative to drive the frequency of work-related accidents to zero by the year 2012. this is an extremely ambitious goal. to support this, a new safety observation system has been employed that seeks to pre-emptively detect even small sources of potential danger and prevent accidents before they occur. Accompanying this are programmes to reinforce positive attitudes and actions of all employees.
0
1
2
3
4
5
6
Sickness leave* %
2004 2005 2006 2007 2008
* Percentage of the theoretical regular working hours
* Average number of training days per employee
0
1
2
3
4
5
6
Training days*
2004 2005 2006 2007 2008
32 33
enViROnMentAL PeRFORMAnCe suPPORts eCOnOMiC PeRFORMAnCe enViROnMentAL PeRFORMAnCe suPPORts eCOnOMiC PeRFORMAnCe
the mills themselves are energy self-sufficient (pur-chasing fossil fuels only for start-up situations until the in-mill production systems reach normal operating levels and also for the lime reburning process). surplus energy in the form of electricity, heat, and bark fuels are sold to industrial and other users.
the energy efficiency system (ees) referenced on page 17 in this report is the first to be certified by inspecta in Finland and is an indication of Botnia’s leadership posi-tion in this important area.
Training and improved process controlWith all major production systems in place in our mills, and the majority of it representing the best available technolo-gies for environmental performance, the emphasis now has shifted to tighter process control and continued em-ployee diligence. in 2008, we invested in the development of continous emission control equipment. the new system follows-up emissions in real time thus shortening the re-sponse time of corrective actions in case of disturbances.
A necessity is that the mills operate near their designed nominal capacities and in a steady-state condition. in case the production has to be stopped, the extraordinary emis-sions can be eliminated through improved management of disturbance situations and development models for the shut-down and start-up process.
in 2008, the employees working at the effluent treatment plants of Botnia’s Finnish mills received additional train-ing. At the same time, a simulation model for the effluent plant to analyze process conditions and any disturbances was taken into use. the benchmarking of best practices will improve the performance of the treatment plants.
Environmental performance in sawn goodsin 2008, the svir timber sawmill in Russia implemented an isO 14001 environmental management system similar to the one used at Fray Bentos. svir timber adheres to all of Botnia’s environmental principles.
Future challengesWe are beginning to receive the first inquiries from custom-ers and other interested parties about the cradle-to-grave carbon dioxide output (the “carbon footprint”) for paper products, and are actively involved in helping these custom-ers calculate the footprint for their specific paper profile.
the calculation is not as simple as it might first seem. since pulp is only one part of the paper value chain, our input must be integrated with the rest of the chain to arrive at an accurate and meaningful number. then, too, there are several variables to take into account – fibre source, the individual mill that the fibre was processed at, the mode and distance for transportation, and other factors. Much more work can be done in this area.
in doing this work, we follow the framework put forth by the Confederation of european Paper industries (CePi). the starting point is the capacity of forests – the very origin of paper and board raw materials – to bind carbon dioxide while positively contributing to the mitigation of climate change. several different tools exist, but there is currently no pan-european standardised approach.
in uruguay, we are participating in a pilot project to-gether with nCAsi (national Council for Air and stream improvement) and iFC (international Finance Corporation) from the us to calculate the carbon footprint for eucalyptus plantations and for pulp and paper made from this fibre.
On the forestry side, work continues on forest certi-fication and chain-of-custody documentation in Finland and uruguay. it is important for our customers to know that Botnia follows the principles of sustainable forestry and wood procurement and that we develop our opera-tions continously.
Other work is being done on finding productive uses for the by-products obtained from pulp production, once considered waste. there is promise for certain cellulosic chemicals within, for example, the pharmaceutical industry, and for composites which can replace fossil fuels.
A constant challenge for us is to prove the environmental acceptability of pulp mills. When we compare ourselves to other producers, we see that our mills are among the best environmental performers in the world. However, we strive to continually improve. We must be alert all the time, developing processes and structures to significantly reduce any environmental impact.
Part of Botnia’s competitive advantage is our determination to be a forerunner in environmental performance. this is a positive position on at least two levels: it makes us much more compatible with the surrounding communities, and it makes good economic sense as well. internal bench-marking with our other mills makes target setting easier.
the economics come from a reduction in waste and discharges, as well as prudent use of the resources. By recovering and reusing, we get maximum yield from the fibre, chemicals, energy, and water that we consume. High operational efficiency in our mills ensures good perform-ance – and low emissions.
By making investments tailored to the life cycle of each mill, we are efficiently using our capital to get the best available technology, from an environmental viewpoint, applied at each location. in 2008, the environmental per-formance of Botnia’s mills in Finland was improved through an investment of euR 10 million. the largest investments were the modernization of the chlorine dioxide plant at our äänekoski mill to reduce emissions of organic chlorine compounds (AOX), and the system to treat gases from the recovery boiler smelt dissolving tank at the Rauma mill to reduce dust and malodorous emissions.
in addition to technology, people make a vital con-tribution to the environmental impact of our production operations. Botnia’s environmental policy commits every employee to knowing how his or her own actions affect the environment, and what can and should be done. to prop-erly equip our employees with knowledge, all mills conduct regular training about working practices and processes.
the proactive way of working in preventing spills, and fast implementation of corrective actions, make a large impact on each mill’s environmental performance.
As more support services were outsourced to subcon-tractors and partners in 2008, we increased emphasis on training our partners to manage and monitor their opera-tions to completely comply with Botnia’s environmental responsibility principles.
Best performance in the world?From its start-up in november 2007 through its first full year of operation, Botnia’s mill in Fray Bentos, uruguay has demonstrated superb environmental performance – perhaps the best of any large-scale pulp production facil-ity in the world.
the mill’s impact on the environment is monitored using a system approved by uruguayan environmental authori-ties and consistent with global standards. After one year of operation – and throughout the production of 935,000 tonnes of bleached pulp – the Fray Bentos mill averaged COD discharge of less than 5 kg/t and an AOX level of 0,05 kg/t of pulp. the most important environmental tar-get of the year, starting the mill without any extraordinary emissions was fully achieved, and the mill reached 98% operational efficiency.
the importance of transparent information and open communications is a priority for the operations in uruguay, and has enlightened us to improve our environmental communications in Finland as well. the most important messages to convey include actual mill performance, the importance of sustainability in the entire value chain, and Botnia’s contributions in terms of green energy production and energy efficiency.
Energy surplusBotnia has significantly strengthened its position with re-gards to increased production of green energy (i.e. energy production from renewable resources) and in its programmes to reduce energy consumption.
Environmental performance supports economic performance
32 33
enViROnMentAL PeRFORMAnCe suPPORts eCOnOMiC PeRFORMAnCe enViROnMentAL PeRFORMAnCe suPPORts eCOnOMiC PeRFORMAnCe
the mills themselves are energy self-sufficient (pur-chasing fossil fuels only for start-up situations until the in-mill production systems reach normal operating levels and also for the lime reburning process). surplus energy in the form of electricity, heat, and bark fuels are sold to industrial and other users.
the energy efficiency system (ees) referenced on page 17 in this report is the first to be certified by inspecta in Finland and is an indication of Botnia’s leadership posi-tion in this important area.
Training and improved process controlWith all major production systems in place in our mills, and the majority of it representing the best available technolo-gies for environmental performance, the emphasis now has shifted to tighter process control and continued em-ployee diligence. in 2008, we invested in the development of continous emission control equipment. the new system follows-up emissions in real time thus shortening the re-sponse time of corrective actions in case of disturbances.
A necessity is that the mills operate near their designed nominal capacities and in a steady-state condition. in case the production has to be stopped, the extraordinary emis-sions can be eliminated through improved management of disturbance situations and development models for the shut-down and start-up process.
in 2008, the employees working at the effluent treatment plants of Botnia’s Finnish mills received additional train-ing. At the same time, a simulation model for the effluent plant to analyze process conditions and any disturbances was taken into use. the benchmarking of best practices will improve the performance of the treatment plants.
Environmental performance in sawn goodsin 2008, the svir timber sawmill in Russia implemented an isO 14001 environmental management system similar to the one used at Fray Bentos. svir timber adheres to all of Botnia’s environmental principles.
Future challengesWe are beginning to receive the first inquiries from custom-ers and other interested parties about the cradle-to-grave carbon dioxide output (the “carbon footprint”) for paper products, and are actively involved in helping these custom-ers calculate the footprint for their specific paper profile.
the calculation is not as simple as it might first seem. since pulp is only one part of the paper value chain, our input must be integrated with the rest of the chain to arrive at an accurate and meaningful number. then, too, there are several variables to take into account – fibre source, the individual mill that the fibre was processed at, the mode and distance for transportation, and other factors. Much more work can be done in this area.
in doing this work, we follow the framework put forth by the Confederation of european Paper industries (CePi). the starting point is the capacity of forests – the very origin of paper and board raw materials – to bind carbon dioxide while positively contributing to the mitigation of climate change. several different tools exist, but there is currently no pan-european standardised approach.
in uruguay, we are participating in a pilot project to-gether with nCAsi (national Council for Air and stream improvement) and iFC (international Finance Corporation) from the us to calculate the carbon footprint for eucalyptus plantations and for pulp and paper made from this fibre.
On the forestry side, work continues on forest certi-fication and chain-of-custody documentation in Finland and uruguay. it is important for our customers to know that Botnia follows the principles of sustainable forestry and wood procurement and that we develop our opera-tions continously.
Other work is being done on finding productive uses for the by-products obtained from pulp production, once considered waste. there is promise for certain cellulosic chemicals within, for example, the pharmaceutical industry, and for composites which can replace fossil fuels.
A constant challenge for us is to prove the environmental acceptability of pulp mills. When we compare ourselves to other producers, we see that our mills are among the best environmental performers in the world. However, we strive to continually improve. We must be alert all the time, developing processes and structures to significantly reduce any environmental impact.
Part of Botnia’s competitive advantage is our determination to be a forerunner in environmental performance. this is a positive position on at least two levels: it makes us much more compatible with the surrounding communities, and it makes good economic sense as well. internal bench-marking with our other mills makes target setting easier.
the economics come from a reduction in waste and discharges, as well as prudent use of the resources. By recovering and reusing, we get maximum yield from the fibre, chemicals, energy, and water that we consume. High operational efficiency in our mills ensures good perform-ance – and low emissions.
By making investments tailored to the life cycle of each mill, we are efficiently using our capital to get the best available technology, from an environmental viewpoint, applied at each location. in 2008, the environmental per-formance of Botnia’s mills in Finland was improved through an investment of euR 10 million. the largest investments were the modernization of the chlorine dioxide plant at our äänekoski mill to reduce emissions of organic chlorine compounds (AOX), and the system to treat gases from the recovery boiler smelt dissolving tank at the Rauma mill to reduce dust and malodorous emissions.
in addition to technology, people make a vital con-tribution to the environmental impact of our production operations. Botnia’s environmental policy commits every employee to knowing how his or her own actions affect the environment, and what can and should be done. to prop-erly equip our employees with knowledge, all mills conduct regular training about working practices and processes.
the proactive way of working in preventing spills, and fast implementation of corrective actions, make a large impact on each mill’s environmental performance.
As more support services were outsourced to subcon-tractors and partners in 2008, we increased emphasis on training our partners to manage and monitor their opera-tions to completely comply with Botnia’s environmental responsibility principles.
Best performance in the world?From its start-up in november 2007 through its first full year of operation, Botnia’s mill in Fray Bentos, uruguay has demonstrated superb environmental performance – perhaps the best of any large-scale pulp production facil-ity in the world.
the mill’s impact on the environment is monitored using a system approved by uruguayan environmental authori-ties and consistent with global standards. After one year of operation – and throughout the production of 935,000 tonnes of bleached pulp – the Fray Bentos mill averaged COD discharge of less than 5 kg/t and an AOX level of 0,05 kg/t of pulp. the most important environmental tar-get of the year, starting the mill without any extraordinary emissions was fully achieved, and the mill reached 98% operational efficiency.
the importance of transparent information and open communications is a priority for the operations in uruguay, and has enlightened us to improve our environmental communications in Finland as well. the most important messages to convey include actual mill performance, the importance of sustainability in the entire value chain, and Botnia’s contributions in terms of green energy production and energy efficiency.
Energy surplusBotnia has significantly strengthened its position with re-gards to increased production of green energy (i.e. energy production from renewable resources) and in its programmes to reduce energy consumption.
Environmental performance supports economic performance
34 35
enViROnMentAL BALAnCe“WORLD-CLAss is An ACHieVABLe gOAL”
Environmental balance“World-class is an achievable goal”
Certain predictions and promises were made as the Fray Bentos mill went through the permitting process. Now that the mill is in full operation, have the environmental predictions and promises held true? We spoke with two people in the know.
Carlos SaizarLATU“LAtu serves as the independent laboratory that carries out most of the environmental monitoring procedures of the Botnia mill required by our national environmental protection agency (DinAMA). i began working at LAtu in 1992 and have been Chief of the environmental Department since 1998.
From an environmental view, the mill’s start-up was very efficient. it has already reached a level of perform-ance that normally is achieved in about three years after a start-up. there were some initial challenges to control the load of phosphorus and solids, but improvements to the activated sludge system lowered discharges to the point where they are now below the long-term limits.
the projections that were made regarding the impact that the mill would have on the quality of the water in the uruguay River have been confirmed. in general, no changes have taken place with respect to the values of the baseline, apart from ones caused by the natural flow of certain bio-logical communities.
the levels of the main atmospheric pollutants (nitrogen oxide, sulphur dioxide, carbon monoxide, and total par-ticulate matter) have been kept well below international DinAMA standards at all times. total Reduced sulphur compounds, responsible for the odour events of the mill, have increased after the mill’s start-up, as anticipated in the environmental impact study. nevertheless, they have been kept within the limits allowed by DinAMA.
this is the first time in uruguay that monitoring informa-tion is available on-line and practically in real-time. Whenever we detect something that can be improved, Botnia has been very responsive to our suggestions. Communications has been free-flowing at all times.
We are planning to broaden our services to include stack emission measuring and sensory evaluation of odours, in compliance with the standards of the european Community. Botnia will provide assistance for us to develop these skills locally through the technical Research Centre of Finland.”
Constante MendiondoFollow-up Committee“i work in the institute for social security and am also a member of the Follow-up Committee representing Río negro instituto de estudios Artigas. instituto de estudios Artigas is a non-governmental organization (ngO) that was founded in 2005 to improve knowledge of Río negro citizens with regards to their rights and encourage their participation.
i represent the general society around the mill as i am not a scientist or a Botnia employee; and i want to make a positive contribution to enriching our society’s knowledge regarding environmental issues through truthful informa-tion and actions.
Our role on the Committee is to act as mediators be-tween the local citizens’ doubts and the actions of the mill itself. the environmental performance of the mill is a task shared by Botnia and us. We have to ask, and keep asking, the important questions and continually report our find-ings to the people.
Botnia set the following targets: 1) to begin production in Fray Bentos without unusual emissions, and 2) build solid trust and working relationships with the main interest groups in the area. With regards to environmental issues, the performance has been as planned. there has been no measurable impact on the air or water. i think that living so close to the mill, we expected stronger smells. some smells have been noticed on very few occasions.
Botnia’s communications have been timely and have flowed efficiently. no information has been withheld. Botnia is committed to reaching excellence in its environmental performance. i believe that within such commitment lies the future development of uruguay. We must all make an effort to prioritise our social responsibilities – economic and social, as well as environmental.”
CAseFray Bentos environmental performance
Joutseno Kaskinen Kemi Rauma Äänekoski Fray Bentos Total 2008 Svir Timber
Annual productionPulp t/a 522,515 399,953 515,488 493,153 431,978 935,288 3,298,374saw mill m3/a 170,747
Wood consumptiontotal wood consumption 1,000 k-m3/a 2,903 1,795 2,695 2,682 2,103 3,166 15,344 362Certificated wood % 51 68 79 51 88 80 69 2.8
Effluents
Waste waterFlow 1,000 m3/a 16,575 20,776 24,171 13,779 13,650 26,105 115,056 140solids t/a 117 511 431 157 516 441 2,173CODCr t/a 5,432 6,335 6,484 5,518 6,014 5,623 35,406BOD7 t/a 96 127 157 187 142 235 944total P kg/a 4,037 7,831 5,841 3,215 7,491 12,814 41,229total n t/a 96 72 66 25 55 63 378AOX t/a 85 17 63 77 91 30 363
AirProcess*sO2 t sO2/a 144 96 98 324 548 238 1,449tRs t s/a 35 48 34 55 16 7 195nOX t nO2/a 1,078 1,158 1,066 854 706 1,722 6,584CO2 - fossil 1,000 t/a 72 53 62 36 181) 145 386 - biofuel 1,000 t/a 1,088 741 1,218 1,322 802 2,403 7,574Dust t/a 106 165 16 184 364 85 920Energy generation**sO2 t sO2/a Bark for sale 179 6 Bark for sale Bark for sale 0 62 0.4nOX t nO2/a 0 340 168 0 0 0 508 28CO2 - fossil*** 1,000 t/a 0 5 1 0 0 0 6 0.5 - biofuel 1,000 t/a 0 192 229 0 0 0 421 19Particles t/a 0 56 3 0 0 0 59 50
Waste (dry tonnes)to landfills t/a 6,569 14,230 5,163 11,383 6,416 17,164 60,925 7,195Hazardous waste t/a 43 45 102 14 89 54 326 16
Process fuelsLime kiln and torch/hk gWh/a 274 150 190 160 152 354 1,279 - oil gWh/a 0 150 190 69 152 354 914 - natural gas gWh/a 274 0 0 0 0 0 274 - tar oil (biofuel) gWh/a 0 0 0 91 0 0 91
EnergyHeat production tJ/a 10,151 8,565 10,747 8,746 6,447 16,709 61,364 170.2 - black liquor tJ/a 9,888 6,621 8,858 8,447 6,306 16,002 56,122 - bark / malodorous gases tJ/a 0 1,216 1,570 5 0 76 2,867 170.1 - bought fuel tJ/a 263 727 320 294 141 631 2,375 0.1Biofuel tJ/a 9,888 8,374 10,636 8,566 6,344 16,078 59,886 99.9Biofuel % % 97 98 99 98 98 96 98Power production gWh/a 547 386 552 415 247 815 2,962Power consumption gWh/a 323 319 363 344 260 499 2,107 11self-sufficiency rate of pulp mill % 170 121 152 121 95 163 137
*) recovery boiler, lime kiln and other process**) primary boilers***) peat considered as fossil fuel 1) CO2 is used to produce PCC
34 35
enViROnMentAL BALAnCe“WORLD-CLAss is An ACHieVABLe gOAL”
Environmental balance“World-class is an achievable goal”
Certain predictions and promises were made as the Fray Bentos mill went through the permitting process. Now that the mill is in full operation, have the environmental predictions and promises held true? We spoke with two people in the know.
Carlos SaizarLATU“LAtu serves as the independent laboratory that carries out most of the environmental monitoring procedures of the Botnia mill required by our national environmental protection agency (DinAMA). i began working at LAtu in 1992 and have been Chief of the environmental Department since 1998.
From an environmental view, the mill’s start-up was very efficient. it has already reached a level of perform-ance that normally is achieved in about three years after a start-up. there were some initial challenges to control the load of phosphorus and solids, but improvements to the activated sludge system lowered discharges to the point where they are now below the long-term limits.
the projections that were made regarding the impact that the mill would have on the quality of the water in the uruguay River have been confirmed. in general, no changes have taken place with respect to the values of the baseline, apart from ones caused by the natural flow of certain bio-logical communities.
the levels of the main atmospheric pollutants (nitrogen oxide, sulphur dioxide, carbon monoxide, and total par-ticulate matter) have been kept well below international DinAMA standards at all times. total Reduced sulphur compounds, responsible for the odour events of the mill, have increased after the mill’s start-up, as anticipated in the environmental impact study. nevertheless, they have been kept within the limits allowed by DinAMA.
this is the first time in uruguay that monitoring informa-tion is available on-line and practically in real-time. Whenever we detect something that can be improved, Botnia has been very responsive to our suggestions. Communications has been free-flowing at all times.
We are planning to broaden our services to include stack emission measuring and sensory evaluation of odours, in compliance with the standards of the european Community. Botnia will provide assistance for us to develop these skills locally through the technical Research Centre of Finland.”
Constante MendiondoFollow-up Committee“i work in the institute for social security and am also a member of the Follow-up Committee representing Río negro instituto de estudios Artigas. instituto de estudios Artigas is a non-governmental organization (ngO) that was founded in 2005 to improve knowledge of Río negro citizens with regards to their rights and encourage their participation.
i represent the general society around the mill as i am not a scientist or a Botnia employee; and i want to make a positive contribution to enriching our society’s knowledge regarding environmental issues through truthful informa-tion and actions.
Our role on the Committee is to act as mediators be-tween the local citizens’ doubts and the actions of the mill itself. the environmental performance of the mill is a task shared by Botnia and us. We have to ask, and keep asking, the important questions and continually report our find-ings to the people.
Botnia set the following targets: 1) to begin production in Fray Bentos without unusual emissions, and 2) build solid trust and working relationships with the main interest groups in the area. With regards to environmental issues, the performance has been as planned. there has been no measurable impact on the air or water. i think that living so close to the mill, we expected stronger smells. some smells have been noticed on very few occasions.
Botnia’s communications have been timely and have flowed efficiently. no information has been withheld. Botnia is committed to reaching excellence in its environmental performance. i believe that within such commitment lies the future development of uruguay. We must all make an effort to prioritise our social responsibilities – economic and social, as well as environmental.”
CAseFray Bentos environmental performance
Joutseno Kaskinen Kemi Rauma Äänekoski Fray Bentos Total 2008 Svir Timber
Annual productionPulp t/a 522,515 399,953 515,488 493,153 431,978 935,288 3,298,374saw mill m3/a 170,747
Wood consumptiontotal wood consumption 1,000 k-m3/a 2,903 1,795 2,695 2,682 2,103 3,166 15,344 362Certificated wood % 51 68 79 51 88 80 69 2.8
Effluents
Waste waterFlow 1,000 m3/a 16,575 20,776 24,171 13,779 13,650 26,105 115,056 140solids t/a 117 511 431 157 516 441 2,173CODCr t/a 5,432 6,335 6,484 5,518 6,014 5,623 35,406BOD7 t/a 96 127 157 187 142 235 944total P kg/a 4,037 7,831 5,841 3,215 7,491 12,814 41,229total n t/a 96 72 66 25 55 63 378AOX t/a 85 17 63 77 91 30 363
AirProcess*sO2 t sO2/a 144 96 98 324 548 238 1,449tRs t s/a 35 48 34 55 16 7 195nOX t nO2/a 1,078 1,158 1,066 854 706 1,722 6,584CO2 - fossil 1,000 t/a 72 53 62 36 181) 145 386 - biofuel 1,000 t/a 1,088 741 1,218 1,322 802 2,403 7,574Dust t/a 106 165 16 184 364 85 920Energy generation**sO2 t sO2/a Bark for sale 179 6 Bark for sale Bark for sale 0 62 0.4nOX t nO2/a 0 340 168 0 0 0 508 28CO2 - fossil*** 1,000 t/a 0 5 1 0 0 0 6 0.5 - biofuel 1,000 t/a 0 192 229 0 0 0 421 19Particles t/a 0 56 3 0 0 0 59 50
Waste (dry tonnes)to landfills t/a 6,569 14,230 5,163 11,383 6,416 17,164 60,925 7,195Hazardous waste t/a 43 45 102 14 89 54 326 16
Process fuelsLime kiln and torch/hk gWh/a 274 150 190 160 152 354 1,279 - oil gWh/a 0 150 190 69 152 354 914 - natural gas gWh/a 274 0 0 0 0 0 274 - tar oil (biofuel) gWh/a 0 0 0 91 0 0 91
EnergyHeat production tJ/a 10,151 8,565 10,747 8,746 6,447 16,709 61,364 170.2 - black liquor tJ/a 9,888 6,621 8,858 8,447 6,306 16,002 56,122 - bark / malodorous gases tJ/a 0 1,216 1,570 5 0 76 2,867 170.1 - bought fuel tJ/a 263 727 320 294 141 631 2,375 0.1Biofuel tJ/a 9,888 8,374 10,636 8,566 6,344 16,078 59,886 99.9Biofuel % % 97 98 99 98 98 96 98Power production gWh/a 547 386 552 415 247 815 2,962Power consumption gWh/a 323 319 363 344 260 499 2,107 11self-sufficiency rate of pulp mill % 170 121 152 121 95 163 137
*) recovery boiler, lime kiln and other process**) primary boilers***) peat considered as fossil fuel 1) CO2 is used to produce PCC
36 37
eFFLuents, eMissiOns AnD inVestMents eFFLuents, eMissiOns AnD inVestMents
Effluents, emissions and investments
Discharges into waterthe mill performance was generally good. in October, the damage at the activated sludge treatment plant at Rauma caused exceeding in the BOD permit limits. Problems in the activated sludge plant operations at äänekoski and Kaskinen mills caused an increase in nutrient discharges compared to previous year. During the first half of the year, the Fray Bentos phosphorous discharges were higher than normal, but as expected during the start-up period.
the positive development at Kemi mill to reduce COD-discharges continued also during this year. Apart from investments in the bleaching and washing, the good performance comes from good process control and train-ing of personnel. Also the process improvements led to a decrease in use of process water. At Kaskinen mill exten-sive work was carried out at activated sludge plant, sludge treatment and control of nutrients.
Discharges into airAt all mills the production curtailments caused more in-stability in the processes and somewhat increased emis-sions due to start-ups and shutdowns. the process re-lated sulphur emissions increased from previous year at äänekoski due to problems in evaporation area. the nOX emissions rose at Kaskinen mill due to increased use of eucalyptus in production.
Process improvement at Kaskinen evaporation plant increased the dry solids content of black liquor and de-creased sulphur emissions. the tRs emissions were re-duced by improved process control and high efficiency of gas treatment both at Kaskinen and Kemi mill site.
Waste handling the new waste treatment handling sites were started in 2007. the total amount of waste has increased from previous year for several reasons: the new mill in Fray Bentos has increased the production capacity substantially. Additionally, Kaskinen and äänekoski mill have had problems with lime kilns and green liquor clarifiers.
Kemi, äänekoski and Kaskinen mill started a project to reuse existing waste components as materials.
Investments and development projectsthe main investments were the new washing equipment to Kemi mill bleaching plant to reduce COD-discharges, improved treatment of smelt dissolver exhaust gases in Rauma to reduce smell and dust and the new chlorine dioxide plant at äänekoski to substantially reduce AOX-emissions.
new environmental permits are in effect at äänekoski and Kemi mills. A complaint has been filed to the supreme Court of Justice of the permits of Rauma and Joutseno mills. the bark gasifier project of Fray Bentos was informed to the authorities. the environmental performance of Fray Bentos mill was excellent also based on the external evaluation of ecoMetrix consultants.the cooperation with the authorities works well and the operational conditions are very good also in this respect. At Joutseno mill the evaluation of the biological treatment plant gave good suggestions for proc-ess improvement.
the new reporting system for air emissions was com-pleted in 2009. the investment to real-time monitoring and reporting enables better process control for the operators and lower emissions at stacks. new measurement device for dust was purchased to Kemi mill.
High efficiency in treatment of malodorous gases ensures low tRs-emissions. improved control and small investments in this area were done at Joutseno and Kemi with good results. the overall efficiency of treatment of malodorous gases was over 99.6% during 2008.
Fray Bentos Joutseno Kaskinen Kemi Rauma Äänekoski
effluent Current permit Dinama 4.7.2007
supreme Administrative Court 20.5.2003
Vaasa Administrative Court 23.12.2004
Vaasa Administrative Court 24.10.2008
Vaasa Administrative Court 15.5.2001
Vaasa Administrative Court 9.5.2000
Air Current permit Dinama 8.11.2007
29.7.1994 /10.8.1998
22.12.1992 /16.5.1997
24.10.2008 2.6.1995 /25.1.2001
19.11.2007
solid waste Current permit Dinama 8.11.2007
20.12.2007 12.3.1999 24.10.2008 1.6.1998 30.3.2005
Pulp mill environmental permits
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005 2006 2007 2008
Environmental investments 2000–2008 EUR M
36 37
eFFLuents, eMissiOns AnD inVestMents eFFLuents, eMissiOns AnD inVestMents
Effluents, emissions and investments
Discharges into waterthe mill performance was generally good. in October, the damage at the activated sludge treatment plant at Rauma caused exceeding in the BOD permit limits. Problems in the activated sludge plant operations at äänekoski and Kaskinen mills caused an increase in nutrient discharges compared to previous year. During the first half of the year, the Fray Bentos phosphorous discharges were higher than normal, but as expected during the start-up period.
the positive development at Kemi mill to reduce COD-discharges continued also during this year. Apart from investments in the bleaching and washing, the good performance comes from good process control and train-ing of personnel. Also the process improvements led to a decrease in use of process water. At Kaskinen mill exten-sive work was carried out at activated sludge plant, sludge treatment and control of nutrients.
Discharges into airAt all mills the production curtailments caused more in-stability in the processes and somewhat increased emis-sions due to start-ups and shutdowns. the process re-lated sulphur emissions increased from previous year at äänekoski due to problems in evaporation area. the nOX emissions rose at Kaskinen mill due to increased use of eucalyptus in production.
Process improvement at Kaskinen evaporation plant increased the dry solids content of black liquor and de-creased sulphur emissions. the tRs emissions were re-duced by improved process control and high efficiency of gas treatment both at Kaskinen and Kemi mill site.
Waste handling the new waste treatment handling sites were started in 2007. the total amount of waste has increased from previous year for several reasons: the new mill in Fray Bentos has increased the production capacity substantially. Additionally, Kaskinen and äänekoski mill have had problems with lime kilns and green liquor clarifiers.
Kemi, äänekoski and Kaskinen mill started a project to reuse existing waste components as materials.
Investments and development projectsthe main investments were the new washing equipment to Kemi mill bleaching plant to reduce COD-discharges, improved treatment of smelt dissolver exhaust gases in Rauma to reduce smell and dust and the new chlorine dioxide plant at äänekoski to substantially reduce AOX-emissions.
new environmental permits are in effect at äänekoski and Kemi mills. A complaint has been filed to the supreme Court of Justice of the permits of Rauma and Joutseno mills. the bark gasifier project of Fray Bentos was informed to the authorities. the environmental performance of Fray Bentos mill was excellent also based on the external evaluation of ecoMetrix consultants.the cooperation with the authorities works well and the operational conditions are very good also in this respect. At Joutseno mill the evaluation of the biological treatment plant gave good suggestions for proc-ess improvement.
the new reporting system for air emissions was com-pleted in 2009. the investment to real-time monitoring and reporting enables better process control for the operators and lower emissions at stacks. new measurement device for dust was purchased to Kemi mill.
High efficiency in treatment of malodorous gases ensures low tRs-emissions. improved control and small investments in this area were done at Joutseno and Kemi with good results. the overall efficiency of treatment of malodorous gases was over 99.6% during 2008.
Fray Bentos Joutseno Kaskinen Kemi Rauma Äänekoski
effluent Current permit Dinama 4.7.2007
supreme Administrative Court 20.5.2003
Vaasa Administrative Court 23.12.2004
Vaasa Administrative Court 24.10.2008
Vaasa Administrative Court 15.5.2001
Vaasa Administrative Court 9.5.2000
Air Current permit Dinama 8.11.2007
29.7.1994 /10.8.1998
22.12.1992 /16.5.1997
24.10.2008 2.6.1995 /25.1.2001
19.11.2007
solid waste Current permit Dinama 8.11.2007
20.12.2007 12.3.1999 24.10.2008 1.6.1998 30.3.2005
Pulp mill environmental permits
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005 2006 2007 2008
Environmental investments 2000–2008 EUR M
