EBRD Seminar on Energy Efficiency and Renewable Energy for Finnish private sector at the Ministry for Foreign Affairs of Finland on February 16th 2016, presentation by Mr. Lauri Romppainen

2. 16 February 2016
Finnish case study linked to
EBRD energy efficiency
project; Case Metsä Tissue
Lauri Romppanen

3. • Introduction
• Project Copernicus
• Cooperation with EBRD
3
Contents

4. METSÄ BOARD
Paperboard
Sales:
EUR 2.0 billion
Personnel:
2,600
METSÄ WOOD
Wood products
Sales:
EUR 0.9 billion
Personnel:
2,000
METSÄ FOREST
Wood supply and
forest services
Sales:
EUR 1.5 billion
Personnel:
900
METSÄ TISSUE
Tissue and
cooking papers
Sales:
EUR 1.0 billion
Personnel:
2,800
09 March 2016 Metsä Group4
METSÄ GROUP | Sales EUR 5.0billion | Personnel 9,600
METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 116,000 Finnish forest owners
METSÄ FIBRE
Pulp
Sales:
EUR 1.4 billion
Personnel:
850

5. OWNERSHIP 91% METSÄLIITTO COOPERATIVE
OWNED BY 116,000 FINNISH FOREST OWNERS
9% JOZEF ANTOSIK
3KEY
SEGMENTS
• CONSUMER
• AWAY-FROM-HOME
• BAKING AND COOKING
10 PRODUCTION UNITS IN
FIVE COUNTRIES
• FINLAND: MÄNTTÄ
• SWEDEN: MARIESTAD,
NYBOHOLM, PAULISTRÖM
• GERMANY: DÜREN, KREUZAU,
RAUBACH, STOTZHEIM
• POLAND: KRAPKOWICE
• SLOVAKIA: ZILINA
PRODUCTION
CAPACITY
640,000
TONNES / YEAR
OUR WAY
OF WORKING
RESPONSIBLE
PROFITABILITY
RELIABILITY RENEWAL COOPERATION
1.0 2,800SALES
EUR BILLION
PERSONNELMETSÄTISSUE
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6. Metsä Tissue: hygiene and wellbeing for everyday life
Cleanness, hygiene, comfort and
functionality for public washrooms,
industrial work environment, hotels,
schools, restaurants and healthcare
− Solution range including toilet tissues,
hand towels, industrial wipes, napkins
and dispensers
Baking and cooking papers for
professional chefs, bakers and
household cooks
− Extensive product range in
convenient packages for
consumers and big reels for
converting
Leading brands loved by
consumers as well as products
developed for customers’ own
brands
− Extensive range of toilet tissues,
household towels, paper hand-
kerchiefs, facial tissue and napkins
as well as cleaning products
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7. Project Copernicus

8. Project Copernicus, announced in April 2011
• 2 obsolete mills, Konstancin-Jeziorna and
Krapkowice, with low performance and bad
product quality, scattered and inefficient
logistics
• Krapkowice to be developed to a state of the
art operation and all production and supply
activities in Konstancin-Jeziorna to be closed
• The project will
– replace two old and inefficient paper machines
with two new ones
– close down the CHP plant and use natural gas
boilers for the heating requirements
– increase production capacity
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9. Technology strictly focused on energy and
environmental aspects
• From coal to natural gas; CO2 emissions reduced by 35,000 tonnes per year,
reduced SO2 and dust -> EU Flower and Nordic Swan ecolabels achieved
• New paper machines’ energy consumption below EU BAT, top levels in tissue
production
• Increased utilization of recycled paper, positive effect on the waste management in
Poland
• Significantly reduced fresh water usage
• Effluent volume decreased by ~30% from present level despite of production
capacity increase
• Less wood fibers used in finished products with same or better product
functionality
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10. Cooperation with EBRD

11. Getting started
• Several contacts/projects throughout years
• First meetings to explore financing alternatives in summer 2010
– Multi Project Facility, EBRD part of a syndicate
– Investments in Central Eastern Europe and Commonwealth of Independent States
• NDA signed in October 2011
– Project Copernicus presented to EBRD in detail
– Lots of detailed questions, especially around energy efficiency
– Discussion on possibility to have a bilateral loan instead of a syndicate began
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12. Due diligence and loan negotiatons
• Green light from EBRD’s Investment Committee in November 2011, i.e. the Bank
was interested in working with Metsä Tissue
– Due diligence focused on the financials, market, environment and social aspects; very
detailed questions
– Site visits to Krapkowice
• Loan term sheet agreed in May 2012
• Loan signed in August 2012
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13. Requirements in the loan agreement
• Project implementation in accordance with predefined project plan
• Quarterly reporting on the implementation and progress of the project
• Yearly reporting on Environmental and Social Matters
– E.g. verification of emission reductions, energy and water consumption
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14. Lessons learned
• Thorough process; you need to know
your business and project
• The Bank might be able to support in
relations towards local authorities
• Help/expertise available too; energy
efficiency audit done in Zilina, Slovakia
by the Bank’s experts
• Second loan obtainable much faster
as the Bank knows us already
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