1. Forest and forest industry is the basis for wellbeing in Finland November 13 2008 Mr Antro Säilä, Senior Vice President Finnish Forest Industries Federation

2. 23.11.2008 2 Finland – a land of forests and lakes Area of Finland (Canada) 338,000 square kilometres(9,984,000) 10% is covered with water(8,9 %) 187,888 lakes(34 million) 69% forest(54 %) The Finns: 5.2 million(32 million) 67% live in towns or urban areas (80 %) 33% in rural areas (20 %)

3. 23.11.2008 3 Three principal species: pine, spruce and birch Pine (Pinus sylvestris)Spruce (Picea abies)Birch (Betula pendula or betula pubescens)

4. 23.11.2008 4 Forest ownership is a family matter for the Finns Majority of forests owned by private people –earlier hand in hand with agriculture –nowadays the number of urban forest owners is growing One Finn in five belongs to a family that owns forest Average size of a ”family forest” is less than 25 hectares Forest ownership in Finland, % forest land 20.0 million ha

5. 23.11.2008 5 Sustainable forest management: more protected forests than in any other country in Europe Forestry is steered by strict acts, regulations and ecological planning Continuous stakeholder processes –multiple uses of the forests –biodiversity 95 % of the forests are certified Over 8 % of the forest area is strictly protected (close to 2 million hectares) Sources: Working group SUTI 2002, Working group ESSU 2000, Finnish Statistical Yearbook of Forestry 2003

6. 23.11.2008 6 Development of forest resources and forest industry production in Finland 1921-2005 SOURCE: Finnish Forest Industries Federation, Finnish Forest Research Institute

7. 23.11.2008 7 Pulp, paper and wood industries use the wood efficiently for different purposes Forests Forest management Wood procurement Transportation Sorting and drying of timber Logs Pulp wood Forest residues: branches, stumps… Bio-slurries By-products Wood products Pulp Paper Board Biodiesel Heat Electricity Recycling

8. 23.11.2008 8 Local communities have grown around the mills For example in Varkaus, Eastern Finland

9. 23.11.2008 9 Finnish forest industry Forest industry in Finland 40 paper and board mills 38 pulp mills 170 sawmills 20 plywood, particle board/fibreboard mills - 3 rd in Europe - 6 th in the world Metsäliitto Stora Enso UPM-Kymmene Enso-Gutzeit Veitsiluoto Oulu Tampella Forest ja Tambox Varkaus (Ahlström) Corenso United Pori, Varkaus Sunila Myllykoski Paper Serlachius Metsäliiton Teollisuus Finnforest Metsä-Timber Kemi Joutseno- Pulp Metsä-Botnia Metsä- Rauma Kyro M-real Yhtyneet Paperitehtaat Kajaani Kaukas Schauman Kymmene Repola Rauma- Repola Rosenlew Ahlstrom Kauttua Jujo Thermal Stromsdal Metsä- Tissue Tervakoski SCA-Packaging Finland Peterson Packaging Sonoco Alcore Loparex Pankaboard Savon Sellu - 4 th in Europe - 8 th in the world Georgia-Pacific Nordic (Nokia) - Biggest in Europe - 4 th in the world

10. Finland in the global forest sector 24.9.2008 Percentage values of the world totals (%) SOURCE: Finnish Forest Industries Federation 10

11. Understanding the magnitude of the forest industry in Finland compared to some other countries 24.9.2008 Value (€) of forest industry exports per capita and its share of total exports SOURCE: Finnish Forest Industries Federation; Statistics Finland Finland20 % Sweden13 % Austria8 % Canada10 % Norway2 % Germany3 % France2 % USA2 % Forest industry exports / total exports, % 11

12. 23.11.2008 12 Key figures of the Finnish forest industry: 2007* Production value (turnover)**) 22 Bill. EUR 17% of total manufacturing Export value 12 Bill. EUR 19% of total national exports 25% of national net exports***) Investments 1,2 Bill. EUR 25% of investments of the manufacturing sector Employment 59 000 employees Direct employment 2,5 % of total employment Forest cluster employment 8 % of total employment *) Woodworking industries, pulp, paper and paperboard industries **) Includes internal sales of 5 bill. EUR ***) Gross exports minus imported inputs SOURCE: Statistics Finland, Board of Customs

13. 23.11.2008 13 Finnish forest industry is strongly export oriented: 90 % of the production is exported Finnish forest industry produces paper products for 100 million and wood products for 50 million people –Products bind CO 2 and are being used as bio-energy at the end of the life span Integrated production processes and right government policies have enabled efficient wood processing and bio-energy production Main markets for the Finnish forest industry products are in the Europe Total value of forest industry exports from Finland in 2007 was EUR 12.5 billion Share of the main export markets Germany United Kingdom United States France Spain Russia Japan Belgia 18 % 11 % 6 % 5 % 4 %

14. 23.11.2008 14 Production capacity of the Finnish paper and pulp industry Total capacity 38 mill. tons in 2007

15. 23.11.2008 15 Annual average investments of the Finnish forest industry companies in Finland and abroad *) incl. acquisitions Investments in Finland 2005-2007 close to EUR 900 mill. annually SOURCE: Finnish Forest Industries Federation

16. 23.11.2008 16 Global market trends North America Latin America India Russia China Mature / declining market Restructuring Western / Nordic Europe Mature market Restructuring underway Technology leadership Huge coniferous fiber sources Sizable market potential Poor infrastructure Investments needed Huge growth No fiber sources Aggressive investments Fiber sourcing Pulp supplies and investments Big potential Limited own capacity No fiber

17. 23.11.2008 17 Finnish pulp and paper mills are world leaders in clean technology All mills have environmental permits according to EU IPPC directive and permits are based on the use of Best Available Techniques BAT The most effective and advanced techniques to prevent harmful emissions and other environmental impacts, or reduce them to acceptable limits Environmentally, economically and technically feasible solutions

18. 23.11.2008 18 Emissions to air have decreased by 30-80% and landfill waste by 85% per produced tonne since 1992

19. 23.11.2008 19 Increasing pulp and paper industry production – decreasing wastewater emissions

20. 23.11.2008 20 Less is more Water is needed to produce your daily newspaper –10 litres 30 years ago –2,5–6 litres today –in the future even less

21. 23.11.2008 21 We use purified pulp and paper wastewater as high quality drinking water Drinking water of Helsinki metropolitan area is taken from a lake where pulp, paper and chemical mills and several cities release their purified wastewater 565 000 people live in Helsinki metropolitan area

22. 23.11.2008 22 Renewable energy - forest industry is the main producer and user of bioenergy Forest industry produces 80 % of bio- energy in Finland –Around 40 % of the total wood raw material in forest industry is used for bio-energy production The share of bio-energy in Finland is 20 % (total share of renewable energy 25 %) Mill fuels of forest industry in Finland 2006 Total 282 000 TJ

23. 23.11.2008 23 Employment in the Finnish Forest Cluster Energy sector about 4 000Transport companies about 1 500 Maintenance companies about 5 000 Forestry about 20 000 Research and development about 3 000 Machinery and equipment manufacturers about 15 000 Graphic industry about 25 000 Packaging industry about 5 000 Others about 38 000 Almost 200 000 jobs in the forest cluster in Finland

24. 24.9.2008 24 Employment in the Finnish Forest Cluster Energy sector about 4 000Transport companies about 1 500 Maintenance companies about 5 000 Forestry about 20 000 Research and development about 3 000 Machinery and equipment manufacturers about 15 000 Graphic industry about 25 000 Packaging industry about 5 000 Others about 38 000 Almost 200 000 jobs in the forest cluster in Finland

25. SOURCE: Finnish Forest Industries Federation Average annual earnings in wood products industry in Finland 10.7.2008

26. SOURCE: Finnish Forest Industries Federation Applicants for forestry, woodworking and paper industry education in Finland 1996–2008 4.9.2008

27. 23.11.2008 27 R&D of the Finnish Forest Cluster, million EUR Annual R&D input approx. 400 M€ M€ Machinery Chemical industry Pulp and paper industry Wood industries

28. 23.11.2008 28 The Finnish pulp and paper industry invests in new products, efficient technologies and renewable energy: priorities in the research strategy Smart wood and fiber products New products made of wood- based materials Forest based biorefinery/ biofuels Sustainable forest management Increased value for wood biomass Renewal of the industrySustainable developmentCompetitiveness Customer solutions for the future Intelligent, resource- efficient production technologies

29. 23.11.2008 29 Objectives of the National Research Strategy To double the value of the forest cluster's products and services by 2030 - half of the value coming from new products Significant increase in the cluster's R&D Increased use of domestic wood Increased (+25%) use of domestic wood Increased R&D efforts Doubled value of products and services

30. 23.11.2008 30 Intelligent, resource-efficient production technologies The goal is to develop radically new production systems New energy and water saving processes Natural and biodegradable process chemicals/fillers and binders Lower capital intensity Higher flexibility

31. 23.11.2008 31 Customer solutions for the future Competitive customer-oriented products and Services printed electronics and hybrid media intelligent paper/board printed intelligence in packaging bioactive papers and biomarkers green chemicals and bio-energy

32. 23.11.2008 32 Biorefinery options for forest industry

33. Life cycles of some Finnish forest industry products 24.9.2008 33

34. 24.9.2008 34 Shifting production and consumption from non-renewables to renewables fosters sustainable development Wood helps to mitigate climate change Reusable products Side products and waste can be used in the production of bio- energy and bio-fuels Controllable processes High environmental standards Meets customers’ needs Wood products value chain

35. Antro Säilä 35 Thank you for your attention! Merci pour votre attention!