Metsa Group's planned investments Kemi, Rauma and Husum 2019-2023
1. Metsä Group – Forerunner
in sustainable bioeconomy
Ilkka Hämälä
President and CEO, Metsä Group
2. • Increase of the value of Finnish forests
• Profitable growth together with customers
• Reduction of fossil fuel consumption
• Increase of renewable energy production
• Replacing fossil materials with renewables
• Higher amount of carbon stored in wood based products
that have a long life span
2
Metsä Group’s strategic objectives
3. • New bioproduct mill in Kemi
• New pine sawmill in Rauma
• First phase in renewing the Husum pulp mill in Sweden
• Annual sawn timber production would increase by 750,000 m3 and pulp production by 900,000 tonnes
• Use of fossil fuels would reduce by over 400 GWh/a, production of renewable energy increase
by over 2 TWh/a and carbon dioxide stored in wood products that have a long lifespan increase
by 700,000 tonnes/a
Investments would be implemented in 2019–2023
3
Metsä Group starts pre-engineering related to three
investments worth EUR 2 billion in total
4. • Over EUR 0.6 billion increase in annual income
• EUR 0.7 billion increase in exports
• Annual increase in the use of wood of about 6 million cubic meters
• Approximately 2,000 new jobs mainly in wood sourcing and logistics
• Construction phases’ employment approximately 11,500 person-years
• Share of renewable energy in Finland would increase by
approximately 2 %-units
4
Investments in Kemi and Rauma
would have significant economic
impacts in Finland
5. Fossil CO2
emissions
Fossil fuels
5
Forestry* Production
Logistics
Growth+
Sales_
_
Products storing
carbon
- 26 000 000
- 2 000 000
+ 1 500 000
+ 18 000 000
Products replacing fossil
materials
- 8 500 000 tCO2
Metsä Group is already at current state a significant
carbon sink
* Forests owned by the members of Metsäliitto Cooperative
6. WE BRING
THE FOREST TO YOU
• Increasing the amount of carbon
stored in forests and products
• Safeguarding biodiversity
• Responsible corporate culture
• Accident-free work environment
WE WORK FOR A BETTER
CLIMATE AND ENVIRONMENT
• Fossil free mills
• Resource efficient production
WE OFFER
SUSTAINABLE CHOICES
• Fossil free raw materials
• Sustainable supply chain
6
Metsä Group’s 2030 sustainability objectives
Supporting UN Sustainable Development Goals (SDG’s)
WE CREATE WELL-BEING
7. 7
We create
well-being
• Ethics barometer,
100%
• Accident frequency 0
We bring the
forest to you
• Area of regeneration
and management of
young stands +30%
• Amount of carbon
stored in products
+30%
• Volume of decayed
wood in forests (high
biodiversity stumps
90% and retention
trees 100%)
We offer
sustainable
choices
• Share of fossil free
raw materials
100%
• Share of sustainable
suppliers
100%
• Share of traceable raw
materials
100%
We work for a
better climate
and environment
• Fossil CO2-emissions
-100%
• Utilisation of side-
streams 100%
• Usage of process
water, m3/tonne -25%
Metsä Group key sustainability indicators 2030
8. Fossil CO2
emissions
Fossil fuels
8
Forestry* Production
Logistics
Growth+
Sales_
_
Products storing
carbon
- 29 000 000
- 3 000 000
+ 1 000 000
+ 20 000 000
Products replacing fossil
materials
- 11 000 000 tCO2
+ 30%
Metsä Group’s carbon sink grows significantly when
sustainability objectives are met
* Forests owned by the members of Metsäliitto Cooperative
9. Wood harvesting volume in Finland 2018 and the
highest allowable cut 2015–2034
Main increase potential is in sawlogs
Source: Natural Resources Institute Finland, Metsä Group
28,7
38,6
8
3 1
35,8
41,4
7,1 8,4 7,9
36,9
44,8
11,3
9,2
7
Sawlog Pulpwood Energy wood* Branches* Stumps*
Millionm3
Harvesting 2018 Allowable cut 2015–2024 Allowable cut 2025–2034
* Forecast for 20189
10. SAPLING STAND
YOUNG STAND
− small-diameter
stemwood
ADVANCED THINNING
STAND
− 30 % sawlogs
− 70 % pulpwood
MATURE FOREST
− 60 % sawlogs
− 25 % pulpwood
− 15 % crown biomass
INDUSTRIAL WOOD
• Sawlogs:
wood products establishing
a long-term carbon storage
• Pulpwood:
pulp production
ENERGY WOOD
• Crown biomass:
branches and crowns
• Small-diameter
stemwood: stems thinner
than pulpwood
YOUNG THINNING STAND
− pulpwood
60–80 yr
30–60 yr
20–35 yr
5–20 yr
Different parts of a tree must be used in the most value
adding purpose
1
11. • EUR 1.5 billion investment
• Pulp production capacity 1.5 million tonnes (currently 0.6)
– Pulp partly to Metsä Board’s kraftliner mill at the same site. Main
markets for external pulp volumes in Europe and Asia
– Also various other bioproducts
• Direct employment roughly 250 people and in the whole direct
value chain 2,500 people (1,000)
• Employment impact in construction phase nearly 10,000 person-years
• Wood consumption 7.6 million m³/a (3.1)
• Self-sufficiency in electricity 250 per cent
• Sidestreams utilized 100%. No fossil fuels used
• Kemi’s industrial site to become a versatile bioeconomy ecosystem
• Final investment decision in summer 2020
11
New Kemi mill would be the biggest
forest industry investment in Europe
12. 26.4.201912
Demand for softwood market pulp grows
the fastest in China
Demand for softwood
market pulp
Printing and
office papers
Tissue Paperboard Specialty products
World demand 29 % 43 % 13 % 16 %
Europe
China and other Asia
North America
13. 13
New Rauma sawmill world’s
most modern and efficient
• EUR 200 million investment
• Pine sawn timber production 750,000 m3/a
– The level of technology and utilization of data will be raised
clearly higher compared to current sawmills
– Main markets Europe and Asia
• Direct employment roughly 100 people and in the whole
direct value 500 people
• Employment impact in construction phase roughly 1,500
person-years
• Annual sawlog consumption 1,5 million m3
• Sidestreams utilized 100% at the site. No fossil fuels used
• Final investment decision in early 2020
14. 14
Demand for sawn softwood grows
globally
Demand for sawn
softwood
Construction
Joinery and
decoration
Furniture
Packaging and
others
World demand 66% 13% 8% 13%
Europe
China
Middle East and
North Africa
Rest of the world
15. 15
Husum pulp mill to be renewed
• Metsä Board commences pre-engineering of the first phase of the
renewal of Husum integrate’s pulp mill in Sweden
• Roughly EUR 300 million investment in new recovery boiler and
turbine in 2019–2022
• The mill’s two fibre lines are planned to be replaced with one new
line in the second phase of the renewal in the 2020’s
• Pulp production capacity of roughly 750,000 tonnes/a would
remain unchanged, but the mill’s cost competitiveness would
improve clearly
– Roughly half of the pulp used in own paperboard production at the site
• Final investment decision in the last quarter of 2019 at the earliest
16. 16
Prerequisites for investment
decisions
• Securing wood sourcing
• Preconditions for smooth deliveries
• Development of world economy, and especially Asian economy
• Results of environmental impact assessments
• Environmental permits
• Development of financial markets and export financing
• Cooperation with several parties related e. g. to wood sourcing,
logistics, town planning and permits