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UPM AP CUSTOMER MAGAZINE 1/2012

UPM FLASH

Glossy and Green The future of the Asia Pacific printing market www.upm.com


EDITORIAL

UPM FLASH

Paper in 2012

1/2012

Year 2011 has closed with a very positive note and I would like to take this opportunity to thank those who have provided your constant support to UPM along the journey! Globally UPM is taking a resounding step by an investment in a biorefinery in Lappeenranta, Finland, which is the first in the world to produce wood-based biodiesel fuel from crude tall oil. This undertaking has further demonstrated our determination in pursuing Biofore strategy. In APAC, especially in China, many players are looking at the ways to utilize the region’s growth by investing in new equipment and technology. UPM has a unique platform and opportunity to participate in this development. Our success in Changshu mill has laid a solid foundation for our future growth both in office and graphic papers. A new copy paper sheeting line is under construction now which is expected to be operational in later 2012. The new line will add additional 100,000 tons capacity to our existing copy paper offering. On the graphic paper side, we are continuously developing a new product in low basis weight for magazine and direct marketing material, in an effort to offer a competitive edge to our customers. Inventory management is a challenging issue for the whole paper value chain. To cope up with the fluctuating market demand, our supply chain team has developed a new system which was designed to help you better manage your inventory, reduce your operational cost and shorten the lead time - a win-win solution for both sides. Our pilot run has received very positive feedback from the customers. While the US and Europe are suffering from low growth and even recession, Asian economies remain optimistic with China playing the leading role. UPM Paper shares the same optimism in the Asia Pacific region and we look forward to working with you to grow your business to a new height in the year of Dragon!

UPM Flash is UPM Paper Business Group’s customer magazine in Asia Pacific region. EDITORIAL BOARD: Lenny Zhong, Vivian Wang, Jackie Bao, Mary Ma EXECUTIVE EDITOR: Ada Qin (Chinese Version), MOLI Design (Chinese and English Version) LAYOUT: MOLI Design PAPER: UPM Finesse premium silk 250 g/m2 (cover), UPM Finesse premium silk 130g/m2 (inside) SUBSCRIPTION: fax 86 (21) 5292 8912 or email upm.flash@upm.com Please email your feedback on Flash magazine to: upm.flash@upm.com UPM in-house magazine

UPM China & Asia-Pacific Sales Network Shanghai: 86 21 6288 1919 Korea: 82 2 723 0555 Hong Kong: 852 2527 0177 Singapore: 65 6838 7280 Japan: 81 3 5778 2660 Australia: 61 2 9334 5000 www.upm.com

Pertti Salminen Senior Vice President Business Area Asia-Pacific UPM Paper Business Group

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CONTENTs

Metro and upm

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17

Editorial

02

featUre stOrY Customer Day in Macau

08

Turn the page with UPM at drupa 2012 17

News

04

2011 Flash readership survey winners list

16

product and service Less inventory means more efficiency for UPM and clients

18

COrPOrate resPOnsiBiLitY A Win-Win Solution: School-enterprise cooperation

20

Assessing Environmental Products 22

Marketing Information The Future of the Asia Pacific printing market

10

customer story METRO and UPM

12

Glossy and Green

14

18

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NEWS

Jussi Pesonen is the next chairman of the Confederation of European Paper Industries Late 2011, the Confederation of European Paper Industries (CEPI) has nominated the CEO of UPM, Jussi Pesonen, as the next CEPI chairman. Mr. Pesonen started his chairmanship on January 1, 2012. Mr. Barry Wiersum, former CEPI chairman, will take the post of Vice-chairman for the next two years to guarantee a smooth transition. CEPI is a Brussels-based non-profit making organisation regrouping the European pulp and paper industry. Through its 19 member countries CEPI represents 25% of the world’s production. Pesonen states that EU needs a competitive forest fibre industry in order to meet its carbon neutrality goals. “The forest fibre industry is the leading producer of bioenergy and renewable wood based bio-products in Europe. European consumers are

most definitely interested in seeing positive progress in substituting oil-based products with renewable and recyclable bio-products. Therefore European policy makers should ensure a competitive operating environment for this industry”, says Pesonen. Pesonen mentions three examples of policy measures that directly affect competitiveness of the sector: In the emission trading scheme we need a continued carbon-leakage status for 2015-2020 to remain competitive. Also the EU Renewable Energy Policy, by subsidising biomass for energy use, threatens the supply of essential raw materials for our industry. At a regional level, the sulphur directive of marine fuels increases transport costs in Northern Europe to uncompetitive levels.

UPM (China) is certified as one of China’s top employers 2012 by CRF institute UPM (China) was officially certified by CRF institute recently as one of China’s top employers in 2012. The CRF institute is an independent organization who is specialized in the area of research, development and assessment of HR, leadership and strategies. Organizations who wish to participate in this contest will need to go through a series of rigorous assessments. The entire process has provided UPM the unique opportunity to benchmark our HR practices against the international standards and helped us to identify the gaps for continuous improvement. Pertti Salminen participated the award dinner and received the trophy, “This is a great recognition to our HR practices. Over the years, we have been striving to

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build a unique corporate culture and I believe this is something commonly shared by many other employers in the market. Our mission is to create an environment that fosters positive morale, communicates and achieves team goals, and develops people, this is aligned with our renewed corporate value and reflected in many areas we conduct business.” Being awarded as the top employer meaning UPM as one of the employers in this competitive labor market and fast-paced environment, we have built the capability to distinguish ourselves by continuously developing and promoting our HR strategies and best practices, which would allow us to attract, retain and engage the right talent.

“V” certification in Sina MicroBlog UPM has joined the blogosphere by opening an official Sina enterprise microblog. Carrying the concept of “UPM – the frontrunner in the industry”, the blog highlights the company’s values, environmental protection and sustainable development commitments, and information on related marketing activities and recruiting. Through this new social communication tool, UPM hopes to fully engage in two-way discussions, strengthening information sharing and boosting brand construction.


NEWS

UPM launches a new composite in which wood fibres replace non-renewable raw material UPM has developed a new composite UPM Formi for both industrial and consumer enduses. UPM Formi is made from virgin wood fibers and clean plastic polymers. The proportion of wood fibres in the composite varies from 20 to 60 percent depending on the end-use.

ware and other goods for everyday living. The possibilities are extensive. Our strong point is the raw material — renewable and wood-based pulp fibre.”

plastic. Products made from UPM Formi are consistent quality, odourless and safe. The material is delivered to customers in the form of composite granules, which UPM produces in Lahti, Finland.

UPM Formi can be dyed and moulded like

“UPM Formi is suitable for various end-uses”, explains Stefan Fors, Director of UPM’s Advanced Fibre Materials. “UPM Formi is ideal for electronic and automotive industries. It is also good material for furniture, table-

ForMi UPM to build the world’s UPM first biorefinery producing wood-based biodiesel On February 1, 2012, UPM is to invest in a biorefinery producing biofuels from crude tall oil in Lappeenranta, Finland. The industrial scale investment is the first of its kind globally. The biorefinery will produce annually approximately 100,000 tonnes of advanced second generation biodiesel for transport. Construction of the biorefinery will begin in the summer of 2012 at UPM’s Kaukas mill site and be completed in 2014. UPM’s total investment will amount to approximately EUR 150 million. “The biofuels business has excellent growth potential. The quality of our end product and

成功,源自天然

its environmental characteristics has gained ditional oil-based fuels and highly complesignificant interest among a wide range of ment today’s vehicles and fuel distribution customers, and the investment is profitable. systems. UPM ForMi is是一种用于注射成型的新型天然纤维生物复合材料, Lappeenranta the first step on UPM’s way 品质卓越,经久耐用。它使设计师们得以实现任何大胆的想法。 in becoming a significant producer of adThe demand for biofuels is expected to grow vancedForMi second由可再生木材纤维与塑料制成,是一种无味的可回收 generation biofuels. This is by approximately 7% a year in the EU. The UPM also a focal part in the realisation of our Bioof the EU is to increase the share of 复合材料,品质始终如一。UPM ForMitarget 是工业和终端消费者的理 fore strategy”, says UPM President and CEO biofuels in transport fuels to 10% by the year 想选择。 Jussi Pesonen. 2020. In Finland, the corresponding target is even more challenging with an increase of 20%. The annual production of UPM’s biUPM’s advanced biodiesel, UPM BioVerno, is an innovation which will decrease greenorefinery will contribute approximately one house gas emissions of transport up to 80% fourth of Finland’s biofuel target. in comparison to fossil fuels. The product’s 可再生原材料激发灵感 characteristics correspond to those of the tra-

Manufacturing biodiesel UPM ForMi 是未来材料的代表产品。此复合材料采用清洁的塑料聚 from crude tall oil

合物以及来自可持续管理森林的木材纤维制成。由于原材料可以再 生以及芬欧汇川高效的供应链,UPM ForMi 拥有较低的碳足迹。 芬欧汇川在其产品及运营的整个周期中长期致力于环境保护。公司 在环境责任方面的主要领域包括:可持续产品、气候、水资源、森 recycle gas 林以及废弃物处理。 purification

* The crude tall oil is a residue of chemical pulp production, mainly generated in the production of sulphate cellulose from softwood.

crude tall oil

pretreatment

hydrotreatment

fractionation

biodiesel

separation of hydrocarbons

UPM FLASH / 1. 2012 /

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NEWS

UPM Sponsors the Asia Media Awards of Publish Asia 2012 UPM sponsored two categories of ‘Best in Newspaper Marketing’ and ‘Best in Community Service’ in Asia Media Awards 2012 held on April 10-12th in Indonesia, which has designated the best publications from Asia Pacific and the Middle East in seven different categories among over 650 entries received. WAN-IFRA 11th Asian Media Awards aims to promote the highest publishing standards in the fields of newspaper and magazine design, info graphics, printing, editorial content, marketing community service and photojournalism. Best in Newspaper Marketing This award recognizes successful campaigns for marketing the news publishing company’s brand or image to readers in order to increase circulation and subscriptions to the print product and the overall media brand awareness. Judges will value the originality of the product/brand promotion as well as its efficiency for generating significant increases in engagement with the audience leading to increase in circulation and subscriptions. Best in Community Service

UPM Sponsors Ninth Asian Printing Grand Award UPM served as an official sponsor of “The 9th Asia Printing Awards” this past January in Thailand. UPM has been a platinum sponsor for the event for seven consecutive years. Sirivatana Interprint PCL won the award of “Best in Web Offset” category sponsored by UPM. By coincidence, the award-winning works used UPM paper. This is Sirivatana’s second time to claim this honor. In addition, Ringier Print (HK) Ltd, Singapore Times Printers and Shenzhen Toppan Leefung also won awards for their top quality magazine products which were printed on UPM paper.

UPM at drupa 2012

This award aims to acknowledge the most innovative and valuable efforts by the media company to be of service to its community. Judges take in account the merits of such social programs, the effectiveness of their marketing, involvement of the community and the successful delivery of the programs’ objectives.

Meet UPM’s experts at drupa 2012 and discover what our comprehensive paper portfolio has to offer for you. UPM’s papers are suitable for a wide range of end-uses and all printing methods. At drupa, we will also introduce a new online service UPM ColorCTRL for seamless workflow and color management. It will complement UPM’s versatile service offering.

UPM stand at Hall 6 / D60 May 3 – 16, 2012, Düsseldorf, Germany

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NEWS

UPM Changshu mill launches constructions of new copy paper cutting line UPM Changshu mill has started constructions on a new copy paper cutting line, it’s scheduled to be put into production this November.

UPM-Yuanwang Club Event shares information and ideas UPM’s 2nd tier copy paper distributors and a part of end users in Beijing area got together at the 8th Annual UPM-Yuanwang Club Event, which serves as an important communication platform. The event held on March 14 in Beijing, featured speeches by Eddie Chan, the Greater

China Sales Director, and Jin Lian, the General Manager of Beijing Yuanwang. The Head of UPM APAC Marketing and Business Development, Ali Malassu, introduced the new key visual of UPM Jetset and Yes brands. Malassu also shared with the participants research insights on brand recognition and user habits.

UPM investigates counterfeit Yes copy paper At the end of February, UPM participated in a counterfeiting case in a northern Chinese city. In a joint action, UPM cooperated with local authorities that broke up a counterfeiting ring, seizing fake UPM Yes brand products and packing materials.

UPM asks that consumers strengthen consumer and dealer rights by keeping an eye out for fake goods. Counterfeit products are inferior in quality, and by using and selling such products you risk losing legal protection. UPM is resolute in its commitment to fight counterfeit production and sales.

UPM invested one hundred million RMB for the 8-pocket copy paper cutting line, after the operation of new line, the copy paper capacity of the Changshu mill will increase to 450 thousand tons from 350 thousand tons making it the largest copy paper manufacturer in China. As one of the largest Chinese wood free copy paper manufacturers, UPM copy paper has gained market recognition and taken the leading marketing position by combining excellent quality and a good brand image. In recent years, the focus has shifted more and more towards environmental protection concerns. As a pioneer in sustainable development production and operations, UPM first promoted copy paper with FSC and PEFC certification in the Chinese and Asia-Pacific markets, gaining positive recognition as a result. The operation of the new cutting line will realize UPM’s copy paper strategic objective in the Asia-Pacific and China, allowing production to keep pace with market growth while better meeting users’ requirements for top quality and environmentally certified copy paper.

UPM FLASH / 1. 2012 /

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featUre stOrY

Text: Ada Qin Photos: UPM

Customer Day in Macau UPM’s senior leadership emphasized the importance of UPM’s strategic development in boosting paper industry growth in China and other emerging markets.

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featUre stOrY

O

n February 9 this year, UPM held the 2012 customer day in Macau. President of UPM Paper Business Group, Jyrki Ovaska, the Senior Vice President of UPM APAC, Pertti Salminen, the company’s management team as well as over 30 client representatives from mainland China and Hong Kong gathered together, communicating with each other on the future of the paper industry. In addressing UPM’s future growth opportunities, Jyrki Ovaska highlighted the fast-growth in China as suggesting a very promising future paper market. According to a third-party research institution’s fore-

cast of the 2020 global printing paper market, China’s printing paper consumption will increase to 40 million tons in 2020 from 25 million tons in 2011. In contrast, the demand for printing paper in the European and American markets will decrease, and current printing paper capacity has exceeded the demand. In addition to the opportunity in the Chinese market, is the enormous future growth potential in other Asian emerging markets. Two-way conversations were characteristic of this customer day meeting. The Vice President of UPM APAC Supply Chain, York Fang introduced the inventory management innovation program and General Manager of Beijing GAOFU Trading Co., Wang Zhibin,

shared the best practices of their stock management system. Timo Johansson, General Manager of Changshu Mill, announced that the new copy paper cutting line, in which UPM has invested 100 million RMB, is scheduled to put into operation this November. As a result, the copy paper capacity at the Changshu mill will increase to 450 thousand tons from the current capacity of 350 thousand tons, making UPM the largest copy paper manufacturer in China. The successful two-day meeting was capped by the UPM golf tournament and city sightseeing tour in Macau.

UPM FLASH / 1. 2012 /

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Marketing Information

The Future of the Asia Pacific printing market Text: Shao Juan Photos: UPM

A

sia has many very distinct print markets. Japan is very high-tech, and probably the most quality conscious in the world. South Korea is very developed, Singapore, Hong Kong (often using production in China) have long histories of exporting print, particularly books, into the west. China is the most vibrant print market in the world, with very modern sites working beside very old technology using very high levels of labour. Some sites are very well developed with all the latest equipment but many do not go for the high levels of control and automation as labour costs, although rising, are still relatively low. There are largely undeveloped countries, but these are modernizing as Japanese, European and American companies put locations and joint ventures into the region. The Asian print market in 2011 is valued at $267.3 billion, the equivalent of 17.348 trillion A4 prints. The

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CAGR between 2008 and 2011 was 1.4% in value terms and will continue a growth of 4.0% between 2011 and 2016 in volume when there will be some 21.09 trillion A4 prints. In 2011, the market for commercial print in Asia is valued at $56.5 billion, up by 11.4% since 2006. It will see an average CAGR between 2011 and 2016 of 2.2% in value when the market will be $62.9 billion. In the same period the volume of A4 commercial prints will rise by 3.9% and a total of 4,991 billion A4 prints in 2016. As Asian markets develop, packaging is becoming more important. It accounts for 8.1% of the total print volume in 2011, and this is forecast to rise to 8.3% by 2016. The share in value terms in 2011 is 32.8%, and this will be 37.0% in 2016.


Marketing Information

CAGR between 2008 and 2011 is -3.2% in value terms and will decline -0.9% between 2011 and 2016 in volume when there will be some 788 billion A4 prints.

The print volume of all paper and board in 2011 in Asia was 10.9 trillion A4 prints. This has grown with an average CAGR of 1.9% since 2006 and we predict the average CAGR will be 4.1% from 2011 to 2016 when it will be 13.4 trillion A4 prints.

predict a total of 56.21 billion A4 prints in 2016. All offset printing accounts for 82.0% of the total print volume in 2011, and this is forecast to fall to 79.7% by 2016. The share in value terms in 2011 is 50.8% and this will be 43.4% in 2016.

In 2011, the market for advertising print market in Australasia during 2011 is valued at $1.3 billion, down by 12.0% since 2006. It will see an average CAGR between 2011 and 2016 of -1.3% in value when the market will be $1.2 billion. In the same period the volume of A4 prints will fall by 2.6% and we

The Australasian print sector is well developed in Australia and New Zealand, which dominate the region. The print market in Australasia in 2011 is valued at $11.5 billion, the equivalent of 825 billion A4 prints. The

In Australasia all paper and board consumption during 2011 is 3.1 million tonnes, the equivalent of 480.35 billion A4 prints. The tonnage will drop to a little under 3 million tonnes by 2016.

Main chart Chart 1 Asia country print markets, 2006-16 $ million

2006

2008

Chart 4 CAGR(%) 2008-11

2011

2012

2016

CAGR(%) 2011-16

16

Consumption

Trilion pages

Total CAGR (2011–2016): 4.1% 14

China

56,876

72,772

92,188

8.2

99,241

134,055

7.8

Hong Kong

5,894

5,585

5,039

–3.4

5,039

5,242

0.8

India

16,008

18,032

20,366

4.1

21,632

27,169

5.9

Indonesia

3,930

4,410

4,785

2.8

5,085

6,153

5.2

Japan

119,416

122,912

112,880

–2.8

112,179

106,552

–1.1

Malaysia

3,001

3,214

3,438

2.3

3,592

4,092

3.5

12 1 1 1 2 1

10 8 6

Others

1 1

Packing board Coated mechanical

2

Coated woodfree

1

Uncoated mechanical

4

3

4

1

Uncoated woodfree Newsprint

2

3

4

2016

Other Asia

2,140

2,403

2,378

–0.3

2,568

3,549

8.3

Philippines

1,463

1,609

1,684

1.5

1,738

1,950

3.0

2011

Singapore

2,155

2,138

2,094

–0.7

2,132

2,313

2.0

Chart 5 Australasian country print markets, 2006-16

South Korea

14,673

15,323

14,236

–2.4

14,328

14,651

0.6

Taiwan

5,472

5,646

5,600

–0.3

5,782

6,533

3.1

Thailand

1,974

2,123

2,160

0.6

2,229

2,498

3.0

vietnam

345

433

492

4.4

518

644

5.5

All Asia

233,348

256,600

267,340

1.4

276,063

315,400

3.4

Directories % Security 3% 2 Transactional 1% Catalogues 3% Label 4% Books 5% Packaging 33%

Magazine 8%

Directories % Security 3% 2 Transactional 1% Catalogues 2% Label 5% Books 5%

Advertising 10%

Commerical 21%

2011 Asia print product market: 267 billion USD

Chart 2

CAGR(%), 2011-08

2012

2016

10,124

–3.1

10,119

10,259

0.3

1,246

–4.3

1,241

1,251

0.1

$ million

2006

2008

2011

Australia

11,373

11,138

New Zealand

1,450

1,420

Magazine 7%

Packaging 37%

129

124

125

0.5

130

159

4.9

Australasia

12,952

12,682

11,495

–3.2

11,490

11,670

0.3

Transactional 2%

Directories3% Labels 4% Newspaper 4%

Security1%

2016 Asia print product market: 315 billion USD

Chart 3

Transactional 3% Security1%

Directories3% Labels 5% Newspaper 3% Book 5%

Packaging 30%

Catalogues 7% Advertising 11%

Advertising Commerical 10% 20%

CAGR(%), 2011-16

Other Australasia

Book 5%

Newspaper 8%

Newspaper 10%

0

Magazines 14%

Commerical 19%

2011 Australasian print product market: 11.5 billion USD

Chart 6

Packaging 32%

Catalogues 6% Advertising 11% Magazines 14%

Commerical 17%

2016 Australasian print product market: 11.7 billion USD

Chart 7

UPM FLASH / 1. 2012 /

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customer story

Text: Ada Qin Photos: UPM

METRO and UPM: Releasing the brand value of environmental protection METRO Cash & Carry, the international leader in self-service wholesale, has partnered with UPM in publicizing the environmental protection benefits of copy paper in 54 outlets throughout China.

S

ince March this year, customers entering the office supplies departments at METRO in China have viewed a short film aimed at capturing the attention of patrons. The short film introduces METRO’s “Sigma” copy paper and tells the story of environmentally responsible copy paper moving from the forest floor to store shelves. The short film adds glamour to the responsible stewardship of green forest, ecological resources and the modern paper manufactur-

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ing process. Inspired by the goodwill generated by the short film, many customers may put a pile of “Sigma” copy paper into their shopping carts. The theme of “We should do our part to protect the environment” sticks with the customers long after they watch the short film.

weight, METRO, whose headquarters are located in Düsseldorf, Germany, created 66.7 billion euros of global sales in 2011. The international market outside Germany shares 83.5% of METRO’s total sales. Over the last decade, METRO has set its foot already in 39 Chinese cities with 54 outlets in operation.

The short film is a joint production of METRO and UPM, the OEM supplier of “Sigma” copy paper.

A partnership in progress

As one of the global retail industry heavy-

METRO and UPM, both European based corporations, are global cooperative partners. In China, METRO has a ten year relationship with UPM.


customer story

Compared to ordinary hypermarkets, professional customers are METRO’s primary. Because of this, METRO has rigorous selection criteria in choosing suppliers, such as product quality, professional services, quick response and even business concept. “Since METRO China joined forces with UPM in 2003, the development in recent years has accelerated,” says Dong Ling, METRO Office Supplies Purchasing Manager. “At the beginning the cooperative investment was small, but now the annual purchase amount has reached nearly RMB 30 million. A healthy cooperation model between METRO and UPM built a solid foundation for a brighter future in long-term cooperation.”

amount of FSC certified paper that METRO sold in 2011 increased by 22.6% compared with the previous year.” Professional customers are increasingly demanding FSC certified copy paper. In the past, purchasers of FSC certified paper were inevitably international customers. An increasing number of Chinese state-owned enterprises and SME customers are seeking out FSC certified paper. “More and more Chinese customers have realized that using paper with environmental labels is not only beneficial to the natural environment, but also a responsibility,” says Dong Ling, “they’re also finding out that it doesn’t cost much more.” In order to publicize environmental protec-

environmental protection,” says Dong Ling. “Many Chinese consumers wrongly think that using paper is not environmentally friendly. Through the video, we hope to show everybody that the paper they use is not only environmentally friendly, but can be 100% recycled, and that paper is a natural product from renewable resources,” says Dong Ling. Most of normal consumers are not familiar with the facts: besides FSC certified, the copy paper is environmentally friendly in every stage of its production lifecycle. During UPM’s paper production, 97% of water can be reused, with the lowest water consumption per ton of paper in the industry. Also effluent disposal is monitored by the governmental environmental protection department’s networks.

METRO and UPM, both European based corporations, are global cooperative partners. In China, METRO has a ten year relationship with UPM.

Generating value from environmental protection

As a world-renowned famous enterprise, METRO has a long term commitment to environmental protection. “We hope to offer a sustainable working environment and a reliable product to all business customers who purchase at METRO,” says Dong Ling. “In China, the environmental protection concept is becoming increasingly important. The

tion to end users and add market value to its own environmental protection programs, METRO worked with UPM at the beginning of this year to make a promotion video that effectively presented the paper’s environmental credentials. This video has played repeatedly at each METRO outlet. “Although Sigma is a METRO brand, we want our customers to understand that we are cooperating with a highly reputable vender with a keen sense of social responsibility. We want them to know that the two companies are committed to

“Promoting environmentally friendly products and the environmental protection concept together with METRO is a very positive move by UPM in mainland China,” says Mary Ma, the Environmental Marketing Manager of UPM. “There’ll definitely be more cooperative opportunities like this with customers in the future. We are building the brand value of environmental protection today and will benefit from this as the environmental protection concept becomes increasingly accepted in society,” Mary says.

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customer story

文:Ni Dandan 图:UPM

GLOSSY AND GREEN International paper-manufacturer gives ELLE an environmentally-sound look

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customer story

W

hen ELLE China started to hit newsstands twice monthly in February, the fashion magazine arrived courtesy of a new venture with the Finnish paper giant UPM. For its biweekly magazine ELLE has adopted the 80g UPM Finesse Classic Gloss coated paper. The paper is certified by the Forest Stewardship Council (FSC) and produced by UPM Changshu mill. While it hopes the latest move will initiate an environmental change in the Chinese magazine industry, UPM China has constantly been using technological innovations to improve energy efficiency and reduce the environmental impacts of its products. One of the leaders

With a circulation continually ranking among the top two of all fashion media in China (according to the circulation researcher Kaiyuan), ELLE China, which was established in 1988, is one of the most influential fashion magazines. Two years ago, the company de-

cided it would only use either paper certified by the FSC or listed with the Program for the Endorsement of Forest Certification (PEFC). According to Ms. Ellen Huan, Media Production Director for Hearst Magazines China, every company has social responsibilities, being an even greater issue for the media. “For Chinese women around the age of 40 who are into fashion, ELLE China has been a constant presence throughout their lives. Personally, I learnt about Dior and Chanel from this magazine. Now the daughters of these women continue to read our magazine. Knowing the role our magazine plays in so many women’s lives, we’re hoping to use our actions to educate our readers and let more of them know about their obligations with regard to environmental protection,” says Ellen. One of the first magazines to adopt FSC-certified paper, ELLE China has chosen UPM as its partner because of its excellent reputation worldwide. “More importantly, in the uncertain Chinese market, the stability and reliability of UPM’s products and its management and services are especially valuable,” adds Ellen.

As the world’s biggest recycled fiber user, UPM recycles 3 million tons of fiber every year, accounting for 30% of its raw materials. Paper-making fiber can be recycled six times and this helps save two-thirds of the energy consumed during the paper production process.

Ali Malassu, UPM Asia-Pacific Marketing and Business Development Director, described the venture with ELLE China as a great match, given that both companies are leaders in their respective industries. Prior to this venture, the two companies had already been working together in China for eight years. New approaches

UPM first entered the Chinese market in

1998. Since then it has constantly innovated its technology to introduce new methods and approaches to the Chinese paper-making industry, with the hope that this will have a positive effect on the local environment. All the wood that UPM uses for paper is from sustainably managed forests. As of yet, the company has not found an appropriate and large enough area for the cultivation of such a forest in China, so the Changshu mill imports the raw materials from Finland. “Fiber is really important in this industry, so we make sure of the sustainable origin of the fibers,” says Malassu. Another important aspect of the paper-making industry is the use of water. At the Changshu mill, up to 97% of the water is now being recycled. Water conservation is especially important in China. The application of international standards would see the development rate of water resources in rivers controlled at around 40%, ensuring the ecological and environmental aspects of the rivers function normally. In China however, more than 80% of the water resources of most rivers are being utilized and in Southwestern areas like Sichuan and Yunnan provinces, river utilization can be as high as 100%. Malassu recalled that when he visited Xishuangbanna, an autonomous prefecture in Yunnan Province, four months ago, there had been no rain for six months. “It reminded me that we should make better use of the resources that we have at the moment, like water or fibers. We should work more efficiently to achieve the same production levels with less consumption.”

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customer story

The Changshu mill is self-sufficient. It has its own harbor and draws its processing and cooling water directly from the Yangtze River. “The mill has even worked out a way of using the heat in the processed water. This initially seemed to be quite insignificant, but we’ve saved a lot of coal with this innovation.” says Malassu.

an online platform was set up, publishing the indexes of the chemicals in the waste water the factory puts back into the rivers and making the data available for the environmental protection authorities in Jiangsu Province in real time. Positive changes

Over the past decade, UPM has invested more than one billion euros in renewable energy with a special focus on the development of carbon neutral energy like nuclear, water and wind power. As a consequence, today the company’s carbon dioxide emissions are about 40% lower than they were in 1990.

Over its 14 years in China, UPM has witnessed the development of the paper-making industry in the country. Malassu said he had personally noted positive changes, like the closure of very old and small mills and the government’s plan to shut down more of these, the expansion of production lines at major companies, and the introduction of international technology.

In addition to these innovations, UPM has also pushed to provide more transparent information in China. For the Changshu mill,

A stable market

A nationwide survey conducted by the China

Press and Publication Research Institute in 2011 indicated that the number of Chinese readers remained nearly the same as it was in 2010. However, the percentage of those reading on computers, mobile phones or other electronic devices saw a year-on-year increase of 5.8%. Despite strong growth in the digital reading sector, Ellen said that this did not mean that printed media would die out. On the contrary, the printed sector would continue to grow in China in the next few years. Discussing the emergence of E-media, Malassu said that what UPM was doing and would continue to do was ensure the company produced the right products for the market and was competitive enough to face emerging trends.

UPM Flash readership survey Dear Readers, Thanks for your continued support, the 2011 UPM Flash readership survey was completed successfully. Finally, we have 8 participants won the Apple iPod nano. Zheng Shangke

Samson Paper (Shenzhen) Co. Ltd.

Liang Hongyan

Shenzhen, Shenkemei Industrial Co., Ltd.

Xu Yan Shen Zhigang Chen Yu Zheng Lixing

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Office Depot RR Donnelley Printing Co., Ltd. Shandong Jialin International Business Development Co.Ltd. Huizhou Chengbang Sationary Ltd.

Lim Chin Boon

Times Printers Pte Ltd.

Kimberly Yong

Canon Singapore Pte Ltd.

/ 1. 2012 / UPM FLASH

Co n to t gratu l he win ations ner s!


Feature Story

Text: UPM Photos: MOLI

Turn the page with UPM at Drupa 2012 the gateway to exciting experiences

I

t’s time to turn the page and write the next chapter in the story of paper. UPM will do it at drupa 2012.

At drupa you can familiarise yourself with UPM’s wide range of papers for every end use and printing method. New solutions, like UPM SwanBarrier, for the packaging industry, wide DIGI paper offering or low basis weights products, such UPM Eco product family, are just some of the interesting product examples and innovations presented by UPM at drupa 2012. UPM believes in co-operation throughout the value chain. By joining the expertise of UPM Paper and visionary cooperatives we’ve cre-

ated inspiring features and solutions for modern print media. Come and see how codes, tags and augmented reality truly add new dimensions to print. You’ll also discover how they help to measure print media effectivity. Check out our demo sessions and take a peek into the future of paper. UPM is known for the know-how and expertise of its technical sales team. At drupa we will launch a new service for web based pdf workflow and colour management. It has been developed to produce colour accurate print products on UPM paper quicker and easier than ever. Come and hear more about UPM ColorCTRL and other UPM services at our stand.

UPM is exhibiting in PrintCity hall 6 as part of the joint PrintCity Alliance and is also sharing expertise in PrintCity’s Hot Topic clusters. UPM is presenting technical innovations improving runnability, printability and the latest value added solutions in newspaper printing. New UPM Seminars and Workshops for printing industry players will be introduced at the PrintCity area. At drupa, we will also introduce a new online service UPM ColorCTRL for seamless workflow and colour management. It will complement UPM’s versatile service offering. Stay tuned for UPM drupa news by following us at www.upmpaper.com and www.twitter. com/UPM_Papers.

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product and service

Text: Ada Qin Photos: UPM

Text: Ada Qin Photos: UPM

Less inventory means more efficiency for UPM and clients Too much inventory produces a drag on a company and UPM is to improve inventory management via visible information sharing with clients.

E

ven for a distributor that has been engaged in the paper business for many years, large fluctuations in the paper sales market is unpredictable.

From March to May last year, paper sales had been robust for Beijing GAOFU Trading Co., Ltd., one of UPM’s largest northern distributors. Sales by the end of May, however, turned south. Low market demand contributed to sluggish sales over the next several months. Unable to accurately gauge future market demand, Beijing GAOFU accumulated over two months of inventory by July of last year. “Generally speaking, it’s relatively healthy for a

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distributor to have about one month of inventory,” says UPM Supply Chain Planning Manager Chen Zhiming. “It may be hard for a company with too little inventory to handle a sudden order, but too much inventory can also create a huge working capital burden.” For example, a distributor that has a monthly sales volume of 1,000 tons, costing say 7,000 RMB per ton, will have 14 million RMB of cash flow sucked up with two months of excess inventory. It is also not a good thing for UPM that the client has too much inventory. “Due to asymmetry in inventory information be-


product and service

tween UPM and clients, we often encounter the case that supply falls short of demand when the paper market becomes flat because resources are tied up in the inventory of distributors whose sales are slow. In contrast, when the market is good, clients will often compete indiscriminately for products. In other words, it is very hard for resources to be optimally allocated,” explains Chen Zhiming. Inventory information sharing benefits all

In August 2011, Beijing GAOFU and the UPM supply chain department began to share inventory related information. The shared data includes major aspects of the orders prepared for the client, the orders that have not yet been produced, the client’s inventory and the client’s product delivery status. All the information is maintained jointly by UPM and Beijing GAOFU, and it is updated periodically. “Information sharing has helped us to dismantle a fence between UPM and the distributor,” says Chen Zhiming.

“The inventory information-sharing mechanism is established on the foundation of UPM’s long-term collaboration and mutual trust with the clients. The paper market is already a market with very high transparency, and the rise and fall of paper prices is not the result of action by a single entity.”

Without information sharing previously, UPM and the distributor ongoing and continuous communications were not commonplace. Once the deal was over, sales personnel would communicate with the client via a phone call, which often failed to produce the documents necessary for an accurate information exchange. The present information sharing, however, not only allows the client to accurately understand the UPM mill’s production and inventory status, but also gives UPM a window into the problems that the client has during sales. This allows UPM to react and adjust in time to help the client analyze situations and provide support. “The inventory information sharing between UPM and the client is an innovation,” says Wang Zhibin, General Manager of Beijing GAOFU. “The more inventory there is, the more capital it occupies. However, if the inventory is too low, the variety and specifica-

tion may be shallow to lose order. GAOFU has noticed that supply chain efficiency improved and that overdue inventory caused by inaccurate stock decreased, thus reducing operating costs for both parties.” From August 2011 to April 2012, the total inventory volume at Beijing GAOFU decreased to one third of the present volume. Wang Zhibin summarized four benefits by the inventory information-sharing: effective product preparation, decreasing inventory cost, clearer understanding of the best selling goods and specifications, and increased visibility of UPM’s inventory. Trust is the key

However, some people may doubt the wisdom of information sharing. They argue that inventory and product delivery information are trade secrets and sharing it leaves a company vulnerable to price inflation due to knowledge of a client’s internal information. “The inventory information-sharing mechanism is established on the foundation of UPM’s long-term collaboration and mutual trust with the clients. The paper market is already a market with very high transparency, and the rise and fall of paper prices is not the result of action by a single entity,” says Chen Zhiming. “We have been cooperating with UPM for 13 years and have a very good understanding of each other. The trust we have developed is the cornerstone of our relationship,” says Wang Zhibin. This year, UPM supply chain department will propose the inventory sharing system to more clients. “The goal will be to build a real-time inventory information system that will allow us to cooperate better with the client in the future. By then, sharing this information will be second nature,” says Chen Zhiming.

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COrPOrate resPOnsiBiLitY

Text: Ada Qin Photos: UPM

A Win-Win Solution: School-enterprise cooperation The UPM school-enterprise cooperation project gives students an authentic real-world experience. After spending several months in the program, students acquire an in-depth understanding of UPM’s culture and environmental protection values.

I

n the beginning of March, twenty teachers and students from Wuhan University and Beijing Institute of Graphic Communication arrived at the UPM Changshu Mill for a three-day training and competition.

UPM has supported printing and papermaking colleges in China for many years. Starting last year, in addition to annual scholarship contributions, UPM introduced a bold new proposal cultivating student experience in scientific research. The new program called “SchoolEnterprise Cooperative Scientific Research” was born. The launch of this program signaled UPM’s commitment to develop talent beyond just funding scholarships to give excellent students a solid professional foundation upon which to start their careers. Xia Xiaohui, UPM Senior Business Development Manager who participated in the evaluation of the school-

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enterprise cooperation project, gave students high marks for their energy and achievement. “Although the students lack the maturity cultivated from long industry experience, they have the advantage of being able to think out of the box providing mutual learning opportunities for both students and industry veterans,” praises Xia Xiaohui. Wang Yunjiang, UPM Technical Sales Manager and the Head of School-Enterprise Cooperation Project, pointed out the effort involved many departments. “Our company has invested human and material resources to the project. Contributing to the program are the UPM Asia Research and Development Centre, marketing department, technical department and communications department, all of which demonstrate UPM’s attention to the school-enterprise cooperation project.”


COrPOrate resPOnsiBiLitY

Students and teachers who participate in the project are sharing their experience and opinions on this activity. Following are some of their views. Qian Jun, Wuhan University Doctoral Supervisor

“The cooperation with UPM really impressed me. The students were able to observe and participate in industry practices through activities, which are good examples of production cooperation and scientific research. In addition, UPM’s environmental protection experience exposed students to this international industry’s social responsibilities. We all live on the same earth, and both industries and schools bear responsibilities for environmental protection.” Li Yanan, Wuhan University student

“I got a lot from this program. During the investigation and research report phase, I learnt the value of practice. Theory is one thing but the value of actually working through a project is huge. Thinking through the investigation process is valuable practical experience for our college students who have grandiose ambitions but still need to develop our skills. During the tour of the Changshu Mill, both the production line staff and the knowledgeable research personnel were enthusiastic and approachable. They were great down-to-earth models of UPM’s corporate culture. Finally,

the advanced environmental facilities and technology showed us how the processes of the papermaking industry can be aligned with the environment in which it works through technology.” Sang Shenglun, Wuhan University student

“Our team is called ‘paper-like life’, which is a team that we organized as freshmen. At that time, our teachers showed us UPM videos and their forest life story impressed us. Last year when we were sophomores, we registered to participate in the UPM Schoolenterprise cooperation project, but we didn’t get the chance to enter the finals. We staged a comeback this year and finally got the opportunity. The company’s advanced production facilities amazed us, and the training they arranged for us was top notch reflecting UPM’s professionalism and leadership position.” Wang Xin, Beijing Institute of Graphic Communication teacher

“So many students have come to me following this experience to say that this one activity has been better than studying for an entire year at school. The training provided was intensive but we managed to learn so much about UPM’s advanced technology, rich management practices and its unique company culture.”

In addition to annual scholarship contributions, UPM introduced a bold new proposal cultivating student experience in scientific research. Zhou Hansong, Beijing Institute of Graphic Communication student

“The thing that you notice the most at UPM is its ‘people-oriented’ culture. The mill has a highly skilled labor force working alongside the industry’s most advanced equipment and production lines. Moreover, the ‘printing simulator’ was an eye-opener for us. Advanced equipment like this can have a massive impact on costs and protecting the environment.” Wang Chuize, Beijing Institute of Graphic Communication student

“Our team was very eager to submit impressive investigation and research reports, so we came into school to get to work on them before the new semester had even begun. We worked hard, consulted a lot of materials, and during the finals stage we woke up 8am and worked through to 3am. Funnily enough, this wasn’t really a hardship because we knew we were getting so much more than what we were putting in.”

Left: At the R&D Centre, the researchers are explaining the paper characteristics to students. Right: The student is working carefully with her two classmates in the laboratory.

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ASSESSING ENVIRONMENTAL PRODUCTS Text: Mary Ma Photos: UPM

T

products means that more businesses are paying attention to the development of sustainable products. But what is an environmentally friendly product? And what environmental assessment tool can be relied on?

Reducing energy consumption is a challenge for every enterprise. At the same time, increasing market demands for environmentally friendly

Market and industry players are willing to accept assessments from third party organizations that are independent from the industry or customers, and to be valued more objectively. Following are several of the well-known environmental assessment tools that have been widely used by industry.

he management and operation of any business is closely related to natural resources and the surrounding environment. For example, energy is needed to run machines, water is required to dissolve, clean and to be used as carrier. Both are basic production materials. However, in the papermaking industry, the three primary resources are water, energy and fibres.

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COrPOrate resPOnsiBiLitY

Check Your Paper

http://checkyourpaper.panda.org/

The WWF introduced a global assessment system in 2009, called ‘Check Your Paper’, which assesses the environmental performance of each step in a paper product’s life cycle, e.g., wood source, energy consumption, water consumption, CO2 emission, effluent treatment and wastes. Scores for each of these components are calculated together to create a final score. For example, UPM offset paper are scored 100% in terms of wood source, this underlines the reliability of the wood source of UPM offset paper and it’s certified by FSC and PEFC already. All assessments are carried out on a voluntary basis. The range of paper category to be assessed are wide, including coated paper, uncoated paper, newsprint, packaging paper and paperboard, speciality paper, pulp and tissue paper. WWF’s ‘Check Your Paper’ provides an objective assessment standard to paper procurement dealers, printers, publishers and other paper buyers. By viewing the environmental performance of a product, buyers can understand comprehensively the product to be purchased and take it as a key factor for procurement. Paper Profile

http://www.paperprofile.com/

‘Paper Profile’ is another outstanding environmental paper assessment tool which was launched by several European papermaking enterprises and conforms to international standards. Paper Profile is different from the WWF assessment tool in that the production enterprises themselves will declare certain key pieces of information such as product composition, certification system, wastewater and waste gas emission data, and power consumption. UPM currently provides the Paper Profile information and carbon footprint statement for all paper products. PREPS (The Publishers’ Database for Responsible Environmental Paper Sourcing)

http://prepsgroup.com/

PREPS is a joint initiative from twenty-three leading publishers, which is used mainly in the UK and Europe. According to the environmental requirements of the publishing industry on paper, PREPS evaluates the products from different paper manufacturers, focusing on wood source and forest management as well as monitoring of CO2 emission and water consumption. Based on the forest source information, each paper is awarded a grade of 1, 3, or 5 using the PREPS Grading System. Five is the highest score indicating a completely reliable source such as FSC certified paper. If the score of paper is 1, the purchaser should give more consideration on whether to purchase the paper. Unlike the two previous assessment tools, PREPS is only open to its registered members. Paper manufacturers who are members can only view the scores for their own products. Customers shipping to Europe from China are increasingly requiring products to reach a certain PREPS score. EPAT (Environmental Paper Assessment Tool)

https://www.epat.org/

EPAT is an environmental paper assessment tool developed jointly by the sustainability nonprofit GreenBlue and the Paper Working Group which is composed of transnational giants such as Times Group, Staples, HP, and McDonald’s. The system is mainly used in North America. Similar to the WWF assessment tool, EPAT assesses the paper products on each stage of its production lifecycle, for example, whether raw materials have been effectively utilized, raw materials conserved, and waste reduced. An enterprise’s social responsibility and economic performance are also taken into account. The environmental assessment tools outlined above are several of the ones that have been accepted internationally. With increasing market demand for environmentally friendly products, more and more assessment tools have sprung up. Customers in different regions have different perspectives on the environmental performance of the paper and and will lean towards various assessment tools accordingly. But on the whole, assessments provided by third party organizations can help purchasers objectively understand the environmental performance of paper, offering them with benchmarks for their paper procurement. UPM FLASH / 1. 2012 /

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UPM Flash  

UPM Flash 201205 EN

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