Loiste 1/2021 - News from port of HaminaKotka 1/2021

LOISTE NEWS FROM PORT OF HAMINAKOTKA 1/2021

Varying year for Port of HaminaKotka Development of D-area at Mussalo making headway p. 4

UPM’s biorefinery project now in the basic planning phase p. 5

NEWS FROM PORT OF HAMINAKOTKA 1/2021

Varying year for Port of HaminaKotka The year 2020 started in the shadow of industrial action within the Finnish wood-processing industry and continued in the uncertainty caused by the coronavirus. A total of 14.8 million tonnes of goods were carried via the Port of HaminaKotka in 2020. This was 18.0% less than in the previous year, when the Port of HaminaKotka reached its all-time-high transport volumes.

Challenging start for the year

From the beginning of 2020, it was obvious that the massive gas pipeline transport that ended in 2019 would be reflected in negative transport volume figures in 2020. Moreover, there was industrial action in the Finnish wood-processing industry in the early part of the year, significantly reducing the transport of the products of the wood-processing industry. The impacts of the coronavirus pandemic began to appear around the world in March, and quite soon the effects were also felt in Finland. However, the Port of HaminaKotka escaped the worst threat scenarios last year. In cargo transport, the coronavirus pandemic had the greatest impact on the exports of paper as a result of a declined demand for printing papers. The most signifi2

cant effects were experienced in international cruise traffic, and all visits by cruise ships confirmed for last summer were cancelled.

Exports decreased by 19.9% during 2020 due to the finishing of gas pipeline transport, the strike in the wood-processing industry and the decrease in paper exports as a result of the coronavirus pandemic. The 80.3% decrease in domestic traffic reflected the impact of the completed shipping operations for the gas pipeline project. In imports, the transport volumes decreased by 11.0%, and in addition to the transport for the gas pipeline project, imports showed a decrease in raw wood transport caused by industrial action in the woodprocessing industry. Container transport also decreased and eventually ended up at 621,402

TEUs, meaning a reduction of 8.3%. This can, however, be considered quite a good result considering the industrial action in the woodprocessing industry and the international shortage of containers towards the end of the year. There was a positive trend in transit transport, as it grew throughout the year and made up for the decline in shipments by the woodprocessing industry.

Positive expectations for this year

Even though the coronavirus pandemic has not yet eased its grip, expectations for this year are still positive. The trend in the transport volumes was negative during the early part of the year, because a significant amount of crushed rock related to the gas pipeline project was still

NEWS FROM PORT OF HAMINAKOTKA 1/2021

shipped in the early months of last year, but a positive turn in transport has started to show from March onwards. It is expected that the transport volumes will increase in 2021 from last year.

Investments and development projects are making progress as, for example, construction work on Fintoil’s tall oil refinery in Hamina has begun and the development of the D-area at Mussalo in Kotka is advancing to the second phase of the project. The significant investments made by Fertilog and Rauanheimo in fertilizer transport at Mussalo are also progressing, and Tanking Terminal Kotka Oy’s terminal complex for the processing of methanol is being completed. Positive news have also been received concerning battery plant projects, since Finnish Minerals Group and the Chinese company CNGR are negotiating on a precursor cathode active materials plant to be established in Finland and preparing a feasibility study of a precursor cathode active materials plant that may be built in Hamina. Moreover, UPM’s biorefinery project has advanced to the basic planning phase, and Kotka is still a strong candidate as a location for the biorefinery.

Exports*

11,424,459 t

-19.9%

Imports**

3,415,970 t

-11.0%

Total

14,840,429 t

-18.0%

*also includes export transit **also includes import transit

Cargo transport at the Port of HaminaKotka • Domestic 1 %

• Transit 30 %

• Exports 49 %

• Imports 20 %

Cargo volumes by types of cargo • Other transport

17 %

• Paper and board 27 %

• Fertilizers 15 %

• Wood 18 %

• Liquids 23 %

Ten years of Port of HaminaKotka Ltd On 1 May 2021, ten years will have elapsed from the merger of the ports of Hamina and Kotka. The port merger brought along both investment savings and synergy benefits. As a result of the merger, the new large-scale seaport took its place as the biggest container, export, transit and general port in Finland. To an ever-increasing degree, it has also evolved into a hub of port-related industrial enterprises.

“On its 10th anniversary, the competitiveness of the Port of HaminaKotka is at its peak both nationally and internationally, and it is ready to face all the challenges of the future.

For this, thanks are due to our efficient and extensive customer and co-operation network as well as our committed owners and personnel,” says Kimmo Naski, CEO of Port of HaminaKotka Ltd. To celebrate the merger of the two ports in 2011, the

The Port of HaminaKotka wishes to celebrate the anniversary in different ways, taking into account the coronavirus restrictions. Portthemed murals by the artist Timo Tyynismaa will be completed at the end of the Merituuli office building in Mussalo and on the wall of the Kuorsalo office building in Hamina before May. Moreover, on 1 May 2021 the great flag of the Port of HaminaKotka will be raised to the tallest flagpole in Finland in Hamina, and in Kotka the flag of the port will be hoisted to the flagpole of the City Hall and at Kantasatama Harbour together with the flag of Finland.

On May Day, those interested can explore the flag sites and murals on the following route: City Hall of Kotka – Kantasatama in Kotka – office building Merituuli in Mussalo – office building Kuorsalo in Hamina – Finnish Flag Place in Hamina.

Port of HaminaKotka also got a cake dedicated to it.

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NEWS FROM PORT OF HAMINAKOTKA 1/2021

Development of D-area at Mussalo making headway The development of the D-area at the Mussalo Harbour of the Port of HaminaKotka is making progress to the second phase of the project. In the first phase of the project, areas of land operations were filled with material derived from the sea, a harbour basin was dredged, and a breakwater, the first part of the quay and a rail connection were built. At the same time, port operator Steveco built a 20,000 m2 pulp warehouse in the area for UPM’s transport needs.

In the second phase, the quay project will be completed and further rail connections will be built. The 150-metre transverse quay will be completed by the end of 2022, and the 300metre extension of the quay completed in 2019 will be next in line in 2023. At the same time, conditions for the construction of a new warehouse next to the current one will be prepared.

The current planning package has been outlined, and, in addition to the construction of the quay, the infrastructure in the area is also being developed in other ways. The City of Kotka will fill the background area of the D-area

for use as an industrial site, which will enable the construction of nearly 60,000 m² of additional storage facilities. In addition, the Port of HaminaKotka will build another 440-metre rail connection in the background area of the D-area; this is included in the second phase of the project.

When all work is completed, the D-area will provide a first-rate operating venue for the international transport of the Finnish woodprocessing industry.

The development of the D-area at Mussalo is part of the Eastern Baltic Hub project, which is co-funded by the Connecting Europe Facility of the European Union.

Further information: www.haminakotka.com > About the port > EU projects > Eastern Baltic Hub

D-area at Mussalo • Safe clearance depth of basin 17.5 MW,

water area approx. 17 ha

75,000–80,000 m²

• Total length of quays approx. 700 m • Total volume of warehouses approx.

• New rail and heavy goods transport connections

• Land areas approx. 16 ha

The background area of the D-area will be filled to become an industrial area, and the quay area will be completed with two new quays.

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NEWS FROM PORT OF HAMINAKOTKA 1/2021

UPM’s biorefinery project now in the basic planning phase UPM has advanced to the basic planning phase in its biorefinery project. The current main options for the location of the biorefinery are Kotka and Rotterdam.

If realised, the biorefinery will be UPM’s second biggest investment ever, amounting to approximately 1 billion euros. The biorefinery will produce 500,000 tonnes of renewable fuels per year for transport and the petrochemical industry. UPM estimates that the products would significantly decrease the carbon footprint of road and air transport and replace fossil raw materials for chemicals and bioplastics with renewable alternatives.

UPM has been carrying out a preliminary study of the biorefinery since 2018. The ongoing basic planning is a more detailed and precise plan to be made for the investment decision. The City of Kotka has reserved an area of approximately 30 hectares for the biorefinery within the Mussalo Harbour area. The plot is located in the Palaslahti industrial area and has undergone significant earthwork, such as filling of the Palaslahti bay with sea sand and crushed rock. If UPM decides to build the new biorefinery in Kotka, it will also have a significant employment impact.

Raising the share of biofuels in transport is one way to reduce emissions from the transport system.

The National Energy and Climate Strategy of Finland has set a target of reducing the greenhouse gas emissions from transport to one half by 2030 as compared to the situation in 2005. The goal is to have very low emissions in the entire transport system in the long term. Emissions will be reduced by improving the energy efficiency of vehicles and the transport system and by replacing fossil fuels with renewable and low-emission fuels. One means to reduce emissions from the transport system is to increase the share of biofuels used in transport.

“If the biorefinery contemplated by UPM would be located in Finland and the Port of HaminaKotka, it would significantly reduce the carbon footprint and contribute to achieving the energy and climate strategy objectives of Finland. We at the Port of HaminaKotka hope that the Finnish Government will do everything in its own role to ensure that this largescale investment can be realised in Finland,” says Kimmo Naski, CEO of Port of HaminaKotka Ltd.

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NEWS FROM PORT OF HAMINAKOTKA 1/2021

Battery plant investment in Hamina one step closer to realisation

If implemented, the precursor cathode active materials plant would be located next to the gate area of the Hamina Harbour.

Finnish Minerals Group, an investment company owned by the state of Finland, announced in February that it is negotiating with the Chinese company CNGR Advanced Material to establish a battery materials factory in Finland. The companies will co-operate in putting together a final feasibility study on the project, concerning a precursor cathode active materials plant potentially to be built in Hillonkylä in Hamina.

The final feasibility study is expected to be ready in the first half of 2021. If Finnish Minerals Group and CNGR decide to establish a joint venture for the construction and operation of the precursor cathode active materials plant, construction work may begin in 2022.

Finnish Minerals Group is also looking into other potential investments in the Finnish battery value chain, and alongside Hamina, Kotka is also included in the plans as a potential location of the battery plant. In addition to the production of precursor cathode active materials, there are ongoing negotiations on a plant that produces cathode active materials. That plant is also covered by the ongoing environmental impact assessment process.

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Battery strategy to give direction for growth in the industry The national battery strategy of Finland was completed in January 2021, and the strategy has identified a number of strengths of Finland that support success in the battery industry and in electrification. The cornerstones of the strategy are the availability and processing of raw materials, extensive production of and research in battery materials and in recycling, and expertise in electrification and digitalisation. The promotion of circular economy for batteries also plays an important role. The vision of the strategy is that the Finnish battery cluster in 2025 will be a forerunner that produces skills, innovations, sustainable economic growth, welfare and jobs in Finland.

Sources: https://valtioneuvosto.fi/-/1410877/kannattavuusselvitys-akkuteollisuudenprekursoritehtaasta-on-kaynnistynyt / https://tem.fi/-/strategia-vahvistaa-suomen-kilpailukykya-akkualalla-ja-edistaailmastotavoitteita

NEWS FROM PORT OF HAMINAKOTKA 1/2021

The 230-metre-long M/V Artania at Kantasatama Harbour in July 2019. Photograph by: Jarno Koivula Photography.

Port of HaminaKotka awaits the start of cruise ship season The Port of HaminaKotka is positive in waiting for the start of the cruise ship season, even though the ongoing pandemic brings uncertainty and challenges to international cruise operations. A record-high number of 16 visits by cruise ships had originally been confirmed for the Port of HaminaKotka for this season, but some of these have already been postponed to the future. The first cruise ship was due to arrive as early as March. Even though the pandemic casts its shadow on the cruise season of the summer, the Port of HaminaKotka believes that at least some of the confirmed visits by cruise ships will become reality based on an increase in vaccination coverage and effective healthrelated measures by shipping companies on the cruise vessels.

Shipping companies pioneering health safety measures

When the pandemic began, cruise companies immediately began to seek solutions for safe travel, and since the late summer many shipping companies have been carrying out socalled test cruises on the Mediterranean and

the Baltic Sea, for example. More than 350,000 Europeans have travelled on cruise ships on European waters since July 2020 without any coronavirus infections thanks to stringent health measures. The passengers are required to have a negative coronavirus test result that is not older than 72 hours. Moreover, several shipping companies require a vaccination certificate and the passengers are also tested for the virus before boarding a ship. The ships have daily health inspection routines and follow strict basic practices such as compulsory use of mask, intensified washing of hands, use of disinfectant and keeping sufficient safety distances. The crews are subject to even more detailed regulations regarding issues such as quarantine. Cruise ships currently take on up to 75% of the maximum passenger capacity to ensure that safety distances are kept and other health guidelines are followed.

According to Petra Cranston, Project Manager, Cruise Business at Port of HaminaKotka Ltd, the cruise ports apply their own safety practices to arriving cruise ships and visitors.

“At the moment, passengers are not

allowed to travel freely at the destinations, but only in groups supervised by shipping companies, in other words in so-called bubbles. The Port of HaminaKotka conducts close co-operation with the health authorities and the towns of Hamina and Kotka in this matter,” Petra Cranston says.

Long-term sales work yielding results

With the present outlook, a total of a dozen or so cruise ships are due to arrive in Kotka and Hamina next summer, starting from the turn of June and July. These include ships of both shipping companies with previous experience of HaminaKotka and shipowners arriving for the first time. The vessels typically carry approximately 3,000 to 6,000 passengers each.

“The long-term efforts have paid off, because Hamina, alongside Kotka, has also established its position as an international cruise port. Some of the biggest shipping companies in the world have confirmed that their ships will call at Hamina and Kotka both this year and next year,” Petra Cranston says.

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NEWS FROM PORT OF HAMINAKOTKA 1/2020

Companies involved in testing 5G test network at Mussalo As part of the 5G FINLOG – 5G Future Innovation Platform for Logistics project, SouthEastern Finland University of Applied Sciences (Xamk) has established a new testing and innovation platform for 5G logistics and port industry at the Mussalo Harbour of the Port of HaminaKotka. This type of research and innovation platform focusing on logistics and industrial operations provides both a unique opportunity and environment for the testing of new generation of network technology and for the development of digitalisation.

The operational goal of the project is to improve logistics operations and port operations by testing new digital innovations and to ensure the future use of the benefits derived during the piloting phase. The goal of the testing and piloting is, among other things, to create new business opportunities between 5G technology and port logistics.

“5G will open significant new opportunities for the development of the operations of the port. Various solutions related to network technology will play an important role in future port operations. The ongoing project will help us make preparations for this trend together with our customers,” says Ville Kuitunen, Director, Traffic Operations of Port of HaminaKotka Ltd.

5G to improve safety and security

The 5G test network now completed at Mussalo is used for piloting various technologies that enhance the operations of the port and improve its safety and security.

“The port has a need for a reliable wireless network. We are therefore examining whether

traditional fixed network connections can be replaced by a private 5G network. One application is the transmission of video image that requires a great bandwidth. When video image is transmitted reliably and in real time, it can be supplemented with artificial intelligence and machine learning and consequently with automation. 5G is perceived as a great opportunity at the port, but first we need to confirm the benefits of 5G for companies operating at the port,” says Project Manager Jonne Holmén from South-Eastern Finland University of Applied Sciences.

Port operator Steveco is involved in the 5G FINLOG – 5G Future Innovation Platform for Logistics project, and Steveco’s System Designer Karri Kangas thinks that the project is an excellent opportunity to explore the new uses enabled by 5G. “Steveco is happy to participate in such useful development projects, which will provide us with new technology-enabled ways to develop our services even further. It is of particular importance to us that high-quality video image can be transmitted reliably in a wireless network. Delayless and accurate video image is an important tool for us in verifying occupational safety and checking the condition of mobile units during loading and unloading. The port area is an excellent place for such a project, because a changing environment with many elements that challenge data communications - such as massive container piles, big ships and strong mobile signal sources - put the capabilities of technology to the test and also create good conditions for developing technology

Port of HaminaKotka Ltd Merituulentie 424, FI-48310 Kotka, Finland • office@haminakotka.fi haminakotka.com • tel. +358 20 790 8800

towards a more fault-tolerable and efficient direction,” Karri Kangas says.

The companies operating at the Mussalo Harbour can now explore the possibilities offered by the test network and find suitable potential uses for their company together with Xamk by contacting Jonne Holmén.

Contact information: Jonne Holmén Project Manager Xamk – South-Eastern Finland University of Applied Sciences +358 44 702 8403 jonne.holmen@xamk.fi

Port of HaminaKotka

Cruise Port HaminaKotka