2021
2022
METSÄ FIBRE CUSTOMER MAGAZINE
PULP IN GROWING DEMAND TECHNICAL FINESSE A FLOURISHING ECOSYSTEM
Contents
FIBRE CUSTOMER MAGAZINE 2021–2022 | METSÄ FIBRE, PO BOX 30, 02020 METSÄ | WWW.METSAFIBRE.COM | PUBLISHER: METSÄ FIBRE | EDITOR-IN-CHIEF: EVA MARTIN | EDITORIAL BOARD: ARI HARMAALA, RAILI KOPONEN, MIKAEL LAGERBLOM, KUSTAA LAINE, TOM NICKULL, TUOMO NIEMI, TIINA TASSI JA HARRI VERTANEN | PRODUCTION: HUBE HELSINKI | ACCOUNT DIRECTOR, PRODUCER: SANNA LAAKKONEN | LAYOUT: HUBE HELSINKI | COVER PHOTO: METSÄ GROUP | PRINTING PRESS: PUNAMUSTA OY | ISSN: 2670-0050 (PRINT), 2670-3831 (ONLINE) | THE MAGAZINE IS PUBLISHED IN FINNISH, ENGLISH AND CHINESE | ADDRESS SOURCE: METSÄ FIBRE’S CUSTOMER AND STAKEHOLDER REGISTER | IF YOU DO NOT WISH TO RECEIVE THE MAGAZINE, PLEASE SEND US AN EMAIL: METSAFIBRE. MARKETING@METSAGROUP.COM | COVER: METSÄBOARD PRIME FBB BRIGHT 210 G | INSIDE PAGES: GALERIEART MATT 150 G
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METSÄ FIBRE CUSTOMER MAGAZINE
EDITORIAL We need interaction without digital devices PAGE 4
PROFESSIONAL ‘Pulp can be used for almost anything,’ says Raili Koponen PAGES 70–71
WORLD OF FIBRE About pulp and our business in brief PAGES 5–7
HOW WE SERVE YOU Sales and the production chain in the same regional organisation PAGES 72–73
UPDATES FROM CEO A systematic approach to implementing strategy PAGE 8
METSÄ FIBRE Our mills and operations in key figures PAGES 74–75
INNOVATIONS & INVESTMENTS The new mill in Kemi takes unique concept one step farther PAGES 9–16
PREDICTING PRICE CHANGES BY CLOSELY MONITORING PULP MARKET INDICES, PAGES 20–24
A UNIQUE IDENTIFIER TRACKS THE WOOD FROM THE FOREST TO MILL GATES, PAGES 26–33
CARBON FOOTPRINT The journey towards fossil free production continues PAGE 17
ENABLER OF A GOOD LIFE Kuura textile fibre is made from pulp PAGES 18–19
PULP MARKET Pulp indices are an important
REGIONAL FOCUS The demand for tissue paper is growing on the Turkish market PAGES 41–44
RESPONSIBLE ACTIONS The business ecosystem finds new uses for Äänekoski mill’s side streams PAGES 56–61
trading tool PAGES 20–24
MARKKU KULMALA BELIEVES THAT CLIMATE CHANGE CAN BE TACKLED, PAGES 45–49
SUSTAINABLE SOLUTIONS The Biomotive project is studying the use of pulp in car parts PAGE 25
INFLUENCER ‘Finnish forests are the best-measured in the world,’ says Markku Kulmala PAGES 45–49
OUR CUSTOMER IPM and CPM manufacture paper in the Abu Dhabi desert PAGES 62–64
THE NEW MILL IN KEMI IS THE PARAGON OF OUR BIOPRODUCT MILL CONCEPT, PAGES 9–16
SUSTAINABLE FORESTRY Tracing systems pinpoint the origin of wood all the way back to the forest PAGES 26–33
HOW IT WORKS Sustainability objectives guide our operations PAGES 50–51
PULP TECH Artificial intelligence for more efficient production processes PAGE 65
OUR CUSTOMER Bohui Paper from China sees opportunity in a plastic-free future PAGES 34–36
OUR CUSTOMER Metsä Board and Metsä Fibre operate in the same industrial ecosystem PAGES 52–54
COOPERATION ‘Finnish long-fibre pulp has excellent strength properties,’ says Timo Teräs PAGES 66–67
HOW WE SERVE YOU Our technical customer service offers diverse expertise PAGES 37–40
PERSPECTIVE The EU Forest Strategy promotes cooperation between Member States PAGE 55
HOW WE SERVE YOU Centralised management of global marine logistics PAGES 68–69
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WELCOME
NOW WE NEED INTERACTION The pandemic has shown us the importance of digital tools – as well as the tasks that call for presence and interaction, without connecting devices. While digital options have helped us maintain important contacts and keep things moving, it has been somewhat challenging to create new ideas and innovations remotely, connected by devices. After a long break, we have now finally been able to meet customers and partners in person. What a great feeling! In the future, it would be wise to combine the best of the new practices we have learned during the pandemic with those of traditional meetings, face to face. It is important for us to develop our customers’ products, processes and business models. To do so, we have enhanced our technical customer service by bringing on board new experts and service elements. Interaction and collaboration will help us make the most of the team’s expertise. Our most important project at the moment is the new Kemi bioproduct mill, which has already received positive feedback from our customers. The new mill will strengthen our market position, allowing us to offer competitive products on all markets and be an increasingly reliable partner for our customers. I look forward to getting together and planning our joint future in person, without a computer screen between us. This magazine’s content has been designed to provide material for such discussions. I hope you enjoy the articles we have put together with you in mind.
ARI HARMAALA Senior Vice President, Sales and Customership
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World of fibre
Pulp customers praise quality, reliability and service
Metsä Fibre’s customer satisfaction survey 2021 was conducted in the sales regions of Europe, Asia Pacific (APAC), North America and the Middle East and Africa (MEA).
The responses show that our overall performance is good. The results from the different sales regions had much in common. In all regions there was praise for the quality and reli- ability of the products and for the service. Logistics, on the other hand, has been a global challenge for all players. “We would like to thank all our customers worldwide for their active participation in the survey. The feedback we have received will help us further improve our operations,” says Harri Vertanen , Vice President, Sales Asia. PRAISE FOR SERVICE AND COLLABORATION Among European pulp customers, Metsä Fibre is per- ceived as a market leader, constantly striving to develop as a company and supplier. “Quality, service and cooperation have been positive fac- tors every year, and this one is no exception,” says Mikael Lagerblom , Vice President, Sales Europe. “During this current year, deliveries have been a chal- lenge and we are now trying to improve them. We also
want to intensify collaboration in order to be able to produce added value for our customers throughout the supply chain.” DELIVERY RELIABILITY GOOD IN A CHALLENGING SITUATION Kustaa Laine , Vice President, Sales for the Americas, the Middle East & Africa, says that the quality of Metsä Fibre’s products and the reliability of its operations were the most positive aspects of the responses. “Our customers felt that our delivery reliability was par- ticularly good, despite the challenging market situation. We are able to respond to demand and are open to growth.” Praise was also given for good cooperation with custom- ers and for the collaborative sales network in the region. “Based on previous customer feedback, we have devel- oped our pricing models and the customers have accepted them very well.” THE VALUE OF WORK FOR SUSTAINABLE DEVELOPMENT Cooperation was also seen as a positive in responses from the Asia-Pacific sales region. “In the APAC countries, we have some really long cus- tomer relationships. We know our customers well and can respond to their needs,” Harri Vertanen says. Technical customer service has received positive feed- back year after year, and this one is no exception. “It is wonderful that our proactive work and production of added value for customers have been noted.” This year, logistical problems have been a challenge for all companies. The responses praised Metsä Fibre’s reliabil- ity and delivery, but also identified areas for improvement. “We are aware of logistical problems and have initiated measures to resolve them.” Sustainable development emerged as a new and posi- tive topic in the survey. Chinese customers in particular were grateful for the work done by Metsä Fibre towards sustainable development.
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Up-to-date 24/7
Fibre Online serves Metsä Fibre’s customers irrespective of the time and day.
From waste to worth: making use of green liquor dregs
The service has received positive feedback from custom- ers, who appreciate finding information about deliveries, delivery schedules and product quality at a single location. In addition, the service contains all the essential docu- ments related to sustainability and product safety. “In recent years, our development efforts have mainly focused on improving service functionality and diversi- fying the content,” says Tari Väätäinen , Technical Cus- tomer Service Manager in charge of Fibre Online and its development. The latest improvements and additions to Fibre Online include a Chinese-language version, a certification report and a function that makes it easier to monitor sea and road deliveries. The monitoring function displays the delivery plans from mill to customer. This has met with a warm wel- come, especially in Asia. “Our Asian customers face long logistics chains and the current global situation can cause major changes to trans- port schedules. Up-to-date information is now available for them,” says Väätäinen. The certification report on sustainability issues indicates the share of FSC® and PEFC™ certified wood in each delivery among other things. “The monitoring function and certification reports were both based on customer wishes, and user feedback has been very positive,”, Väätäinen says. The development is ongoing. The architecture of Fibre Online will be renewed next, and the service will be built on a new software platform. “These reforms will improve performance, especially when opening reports with large data volumes. We will also simplify user administration.”
Metsä Fibre and the University of Oulu are jointly investigating whether green liquor dregs could be used in making artificial stones and construction materials, replacing concrete.
Latest updates on Kemi bioproduct mill
We want to keep our customers updated about the Metsä Fibre Kemi bioproduct mill construction project. This is why we have set up a website with basic information and regular updates and news about the project. Please visit the website at kemipulp.metsafibre. com
Metsä Fibre is actively looking for new uses for the green liquor dregs that results from pulp production. The research is driven by the company’s goal of making 100 per cent use of its production side streams in the form of materials or energy by 2030. One potential use for green liquor dregs is in making geopolymers, materials produced from industrial side streams that can replace concrete. The dregs act as the alkali activators required in the process. One research programme is being carried in collab- oration with the University of Oulu. MIMEPRO project, launched in 2020, explores the utilisation and commercial- isation of industrial side streams as well as geopolymers. “We used them to replace varying amounts of the com- mercial activator in the geopolymer formula. We found it was possible to replace 40 per cent of the original activa- tor with dregs,” says Professor Mirja Illikainen , from the University of Oulu, who heads the research. Metsä Fibre and the University of Oulu are also collabo- rating on another project in which green liquor dregs are used to produce artificial stone. Illikainen explains that this is a simpler task than replacing concrete. The dregs are used as a binder and activator in this production process, too. “In granulation, green liquor dregs and other side streams are made into small granules that can be used as material for artificial stone. Those granules can be used as stone for earthworks or as a replacement for gravel in concrete.” Outi Poukka , Development Manager at Metsä Fibre, says that as part of the research collaboration, the produc- tion of artificial stone material was piloted in summer 2021 with JTP-Industria, a company in Ostrobothnia, Finland. A larger volume of geopolymer granules was produced during the pilot project. “The project is still underway, but we found that gran- ulation is feasible on a larger scale.”
This means that the formula, which was originally de- veloped in a laboratory environment, also works for in- dustrial production and that artificial stone material is a potential use for green liquor dregs. More development work will be required before the product is ready. INTEREST IN THE CIRCULAR ECONOMY DRIVES DEVELOPMENT Professor Illikainen explains that the development of ge- opolymers is driven by interest in the circular economy and the effort to save natural resources. Geopolymer emissions of carbon dioxide are as much as 80 per cent less than from concrete, imposing a smaller load on the environment. Simple products made of geopolymers, such as garden stones, are already on the market. However, recycled materials are still novel from the per- spective of legislation. As Illikainen points out, standardi- sation and clearer regulation are required for the materials to become more common in construction. “I see no obstacle to these products being launched in the next few years. As for geopolymers, we are on the verge of commercialisation, if not there yet.”
Follow the progress at Kemi and Rauma via our webcams
Did you know that the construction work can be followed live via our webcams? “We are building a unique bioproduct mill in Kemi and the world’s most modern sawmill in Rauma. We want to offer everyone interested the opportunity to follow the events in real time,” says Jari-Pekka Johansson , Director of the bioproduct mill project. A total of five cameras broadcast live video of the Kemi bioproduct mill site and the Port of Ajos in Kemi, where a port warehouse for the bioproduct mill is being built. You can find the Kemi bioproduct mill webcams at metsafibre.com/webcamskemi You can find the Rauma sawmill webcams at metsafibre.com/webcamsrauma
WHAT ARE GEOPOLYMERS? Geopolymers are materials that can be used to replace materials like concrete. They are also a practical example of the circular economy. • Mineral side streams from metal processing, the mining industry and the energy industry can be used as binding agents for geopolymers. Millions of tonnes of such side streams are generated in Finland annually. • Green liquor dregs can be used as an alkali activator to strengthen the binding agent. They are less expensive than commercial alkali activators and have lower carbon dioxide emissions.
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Making strategy a reality
Metsä Fibre’s strategic priorities are to be a front runner, to promote sustainability, to exceed customer expectations, and to achieve excellence. We have been systematically focusing on these areas since 2019, and the results show.
Our investments and continuous development work have given us a front runner position in the mechanical forest industry. In Rauma, we are build- ing a new, modern pine sawmill, which will make our deliveries even more reliable and increase our output of high-quality timber. We are continuing to develop our unique bio- product mill concept with a new mill in Kemi. It will immediately improve our environmental performance and extra production capacity will help to meet growing global demand for pulp and strengthen our position as a leading producer of softwood market pulp. Many of our new bioproducts involve the ad- vanced modification of pulp fibres. An example of this is Metsä’s pilot plant with Japanese ITOCHU Corporation, which can already manufacture tex- tile fibres from undried pulp. Currently, we are looking into ways to add properties to pulp that could reduce the use of plastic coating in package cartons. We aim to be a front runner in sustainability and also to support our customers’ sustainable develop- ment. One of our key goals is fossil-free production by 2030. We are a part of the fight against climate change. This is seen in our use of Nordic wood from sustain- ably managed forests and in our resource-efficient products that can replace fossil-based materials. In our efforts to exceed the expectations of cus- tomers, we work as their trusted partner. A prac- tical example is our technical customer service, which has created additional value for our pulp customers for years. We intend to implement a sim- ilar service model on the sawn timber side. Our pursuit of excellent performanc e is the guar- antee that our products are high quality. Our opera- tion is founded on continuous improvement. In the past year we have focused on quality consistency in sawn timber and on providing quality data to customers. We have also introduced a new production effi- ciency model. We have reinforced the skills of our
personnel so that they can handle basic mainte- nance work independently and immediately. This ensures the continuous operation of our produc- tion facilities. Excellent personnel are an absolute requirement for reaching our goals. The high quality of our products is based on their solid competence. We have been investing in their continuous develop- ment, through training and on-the-job learning. We pay special attention to occupational safety, responsibility and sustainable development. We have continued to improve our management and managerial work, as well as developing person- nel involvement. Another objective is to enhance the ethics and sustainability of our operating cul- ture. In this, we will make use of the results of the ethics barometer we carried out in 2020. We are proud of our roots and our solid compe- tence. We have a commanding view of the forest industry and we are developing sustainable solu- tions for the future. •
ISMO NOUSIAINEN CEO, Metsä Fibre
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READ MORE ABOUT OUR BIOPRODUCT MILL CONCEPT
Metsä Fibre’s bioproduct mill, under construction in Kemi, will maximise the conversion of wood, a valuable raw material. SUSTAINABLY AND COST-EFFECTIVELY PRODUCED BIOPRODUCTS
ANNE PENTTILÄ, photo NINA SUSI
The two main elements for Metsä Fibre’s new bioproduct mill in Kemi are environmental and resource efficiency. Based on our unique bioproduct mill concept, it represents the next development step in environmental efficiency. “Resource efficiency means that we get an optimal yield from wood, in terms of the volume of bioproducts ob- tained, and that we use chemicals, water and energy as efficiently as possible in production,” says Kaija Pehu- Lehtonen , Senior Vice President, Business Development. The core idea of our bioproduct mill concept is to fully utilise wood and production side streams for pulp, other bioproducts and bioenergy that can replace fossil-based materials and fuels. Energy self-sufficiency and a water cycle that is as closed as possible are also essential elements in the concept. “Our processes must allow nothing to go to waste. This means recovering valuable wood fibres for pulp and us- ing the remaining parts as efficiently as possible for other material purposes,” says Pehu-Lehtonen. Any parts that are not suitable as material will be used as renewable energy to provide power to energy efficient production processes. A CONTINUOUSLY EVOLVING CONCEPT Metsä Fibre is using the unique bioproduct mill concept to renew its pulp mills. The concept emerged in the ear- ly 2010s, as the company considered various options for
replacing the old Äänekoski pulp mill, then nearing the end of its life-cycle. Äänekoski bioproduct mill, constructed in accordance with the new concept, was started up in 2017. Kemi bio product mill, now under construction, will further de- velop the concept. “Every time we build a new mill, we can make improve- ments to its unit processes, thanks to improved technolo- gy. In Kemi, we can use features that were not yet available to us in Äänekoski. There are also new by-product oppor- tunities,” says Pehu-Lehtonen. She believes the main changes will enhance the bioprod- uct mill’s energy and material efficiency. This will also bring new improvements to the new mill’s environmental performance. “We follow environmental performance by monitor- ing water and energy use, material efficiency, traditional emissions indicators, and so on. The principle of con- tinuous improvement is vital. It forms the basis of our operations.” “Technology continues to develop, and we understand interactions better than ever. However, closed cycles lead to the accumulation of elements, so we must find new ways to use them.” Pehu-Lehtonen still sees room for improvement, even though emissions from the Äänekoski bioproduct mill are very low – and the Kemi mill will emit even less.
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INVESTMENT IN THE FUTURE
The Kemi bioproduct mill will be world-class in terms of its energy, material and environmental efficiency. The investment, valued at approximately EUR 1.6 billion, is the biggest in the history of Finland’s forest industry.
“We must set high targets for ourselves. We have contin- ued to reduce the volume of water going to the wastewater treatment plant, but our goal is to build a path at the bio product mill that will enable us to eliminate wastewater emissions altogether.” Metsä Fibre is well placed to be a front runner, she says, with a bioproduct mill that refines renewable material us- ing advanced and environmentally sustainable technology. “This is also important to our customers. By complying with the principles of sustainability and continuing to de- velop our operations, we can provide clear added value to their business operations.” SUSTAINABLE USE OF RENEWABLE RESOURCES Wood is a renewable resource, and its uses are much dis- cussed. The pulpwood used at the bioproduct mill, which is often obtained from first thinning, is part of sustainable forest management. Pehu-Lehtonen emphasises the im- portance of using wood sustainably. “We can use renewable resources to produce renewa- ble products and solutions that replace products made of fossil-based materials. In addition, the entire production process must be sustainable.” Metsä Fibre’s sawmills that use logs are also essential to the concept. The wood chips that sawmills produce as a side stream are used in pulp production. Every part of the tree can be used sustainably and resource-efficiently. CLOSED CHEMICAL CYCLES FOR A CIRCULAR ECONOMY The pulp production process has a closed cycle of cooking chemicals, meaning that the chemicals are regenerated for reuse in the pulp mill cycle. Components that dissolve from wood are recovered during the process and used for biochemicals such as tall oil and turpentine.
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The 105-metre-high stack was the first structure completed at the Kemi bioproduct mill.
“Our goal is to build a path at the bioproduct mill that will enable us to eliminate wastewater emissions altogether.”
This also reduces the load on the wastewater treatment plant. Flue gases are purified by converting odorous pro- cess gases into sulphuric acid, which is needed when cooking tall oil. “Closed chemical cycles are prime examples of the circu- lar economy. We recover chemicals in the process and use them to produce chemicals needed in another process,” Pehu-Lehtonen says. Closed cycles also improve cost-effectiveness. For ex- ample, less energy is required for pumping water if the volume of fresh water used in the processes has been minimised. The portion that cannot be used for materials or chem- icals is consumed as energy by the mill itself and the surrounding integrated mill area. Production at the bio- product mill is energy self-sufficient and uses renewable sources, with no fossil fuels. “Secondary heat from the bioproduct mill process is used as efficiently as possible in the integrated mill area. For example, at Kemi, we must make sure that the thermal load on waterways does not increase in the winter.” Heat is also recovered from flue gases. For example, secondary heat is used in bark drying, when the bark is gasified and used as fuel. The Kemi bioproduct mill will have an energy self-suffi- ciency rate of 250 per cent. The surplus power, produced from renewable resources, will be sold to the Finnish na- tional power grid.
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2020
CONSTRUCTION
8/2020
BIOPRODUCT MILL PROJECT ENGINEERING BEGINS
12/2020
ENVIRONMENTAL PERMIT
Production will continue seamlessly at Kemi mill
AN ECOSYSTEM FOSTERS NEW PRODUCTS AND PROCESSES In the bioproduct mill concept, partner companies located nearby, as well as the ecosystem formed by the mill and its partners, enable side streams to be utilised and processed on-site. The business ecosystem develops gradually and may continue to expand long into the future. At Kemi, just as at Äänekoski, the bioproduct mill forms an ecosystem core that is expected to attract more bioproduct-related pilot projects and new players in and around the mill. Metsä Board already has a paperboard mill operating in the same integrated unit as the new Kemi bioproduct mill. The Äänekoski bioproduct mill also has a Metsä Board paperboard mill next door. At Äänekoski, the mill area is home to a textile fibre demo plant and a demo plant for 3D fibre products. There are plans to set up a methanol purification facility in the area. “In the future, the ecosystem may be joined by entirely new operators that convert pulp or side streams on-site. Kemi is just getting started, but operations there can be nefit from experience gained at Äänekoski.” Of the possible new concepts emerging at Kemi, Pe- hu-Lehtonen sees interesting opportunities related to carbon dioxide. “Carbon dioxide can be used as a feedstock for chemicals or as an energy store. Since it originates from a renewable resource, it might be a good source of raw materials for future energy production.” In the future, bark will also be refined into products instead of using it as an energy source in place of fossil fuels. Metsä Fibre is exploring this topic in collaboration with universities and research institutes. “Bark can be used for various energy products. We have also studied the separation of tannins and, in collaboration with steel companies, looked at whether bark could be used as a raw material for coke. It ultimately depends on the interests of the upgrading chain.”
2021
11.2.2021
INVESTMENT DECISION, CONSTRUCTION WORK BEGINS IN KEMI
Q3/2021
MAIN EQUIPMENT INSTALLATIONS BEGIN
INSTALLATION
When the new Kemi bioproduct mill comes online in the second half of 2023, the old mill will be wound down. The switchover will not affect deliveries. The additional capacity is now available for booking.
2022
Q3/2022
NEW 110 KV POWERLINE TO NATIONAL GRID COMPLETE
Q4/2022
CONSTRUCTION OF PORT WAREHOUSE COMPLETED
Construction is proceeding purposefully towards the start-up of the new mill in the third quarter of 2023.
The new bioproduct mill in Kemi will be started up by the same employees who shut down operations at the old mill. The switchover is expected to cause only a short pro- duction break of a week or so. It will not affect delivery reliability, says Ari Harmaala , Senior Vice President, Sales and Customership at Metsä Fibre. “Production will transition seamlessly to the new bio- product mill in the third quarter of 2023 without inter- rupting customer deliveries. We will reach full production capacity within a year of the mill start-up,” says Harmaala. The biggest change for Metsä Fibre’s customers will come from the increase in capacity. With an annual pulp pro- duction volume of 1.5 million tonnes, the new bioproduct mill will be the most efficient wood-processing plant in the northern hemisphere. Softwood pulp will account for approximately 1,200,000 tonnes, and birch pulp for some 300,000 tonnes, of the overall production. “The larger production capacity in Kemi means that our market pulp capacity will increase by 800,000 tonnes in softwood pulp and by 100,000 tonnes in hardwood pulp.” Despite the higher production volumes, the world’s most environmentally efficient bioproduct mill will produce premium pulp more cost-effectively than ever. “We are investing in the processes and equipment to ensure we can improve environmental performance and cost-effectiveness at the same time. This translates to ever better customer service,” says Harmaala.
Q4/2022
SAHANSAARENKATU PRIVATE TRACK IN WORKING ORDER
2023
Q1/2023
BIOPRODUCT MILL TEST OPERATION BEGINS
COMMISSIONING
Q3/2023
SHUTDOWN OF THE OLD MILL
Q3/2023
COMMISSIONING OF BIOPRODUCT MILL
2024
Q1/2024
DEMOLITION OF THE OLD MILL BEGINS
Kaija Pehu-Lehtonen Senior Vice President, Business Develop- ment, Metsä Fibre, has been involved in the development of the bioproduct mill concept from the outset.
Q3/2024
BIOPRODUCT MILL IN FULL PRODUCTION
2025
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Goods produced at the new mill will be exported from the Port of Kemi all year round. Transports will be handled with ice-strengthened break bulk vessels.
INVESTMENTS IN LOGISTICS The supply of feedstock is secure despite the new mill’s considerably greater production volume. Alongside road transport, rail will play an increasingly important role in wood deliveries to the mill. The greater need for wood means that it will be arriving from a wid- er area, but thanks to rail transport, the emissions from logistics will drop. Concerning the adequacy of material, Harmaala is con- fident that Finnish forest assets will cover future needs. “Thanks to sustainable forest management, forests here grow faster than they are felled. If necessary, we can pro- cure wood from Sweden, where the sustainability of forest management is also good,” he adds. “In terms of logistics, the biggest change is that goods from the new mill will be transported as bulk cargo on large break bulk vessels sailing from the Port of Kemi all year round.” To make this possible, a new warehouse of 37,000 square metres will be built at the port. In addition, the fairway in Kemi will be deepened to 12 metres so that large vessels can reach the port safely. Ice-strengthened vessels ensure that pulp bales can be transported as bulk cargo irrespective of the season. The northern winter will not affect delivery times. BOOKINGS CAN NOW BE MADE FOR THE ADDITIONAL VOLUME Harmaala expects that the additional mill output will go mainly to current customers in Asia and new customers in North America. “In Europe, we are mostly striving to maintain our cur- rent market share. The Middle East is a growing market, and growth is also on the horizon in Asia, especially China.” Metsä Fibre is already a major pulp supplier for the Chi- nese market. In the years ahead, the country will be mak- ing large paper mill investments and, thanks to the new mill in Kemi, Metsä Fibre will be even better positioned to supply premium pulp to them. “We have already signed letters of intent for deliveries from the additional volume from the new mill and will be signing more. Companies needing additional volume should contact our sales team and book capacity from our new mill,” Harmaala says. •
Rail transports help reduce emissions 7,6
The new bioproduct mill will use 7.6 million cubic metres of wood per year, representing an increase of 4.5 million cubic metres compared with the current Kemi pulp mill. 5 Five million cubic metres of raw wood will be annually transported by rail to the new mill. 9
An average of nine trains will visit the new bioproduct mill every day. −20 % Thanks to the efficient rail transports, emissions will be reduced by 20 per cent per cubic metre of wood.
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Fossil-free production is on the horizon
Improved resource efficiency, investments in the latest technology, and synergies between pulp mills and sawmills are taking Metsä Fibre towards fossil-free production.
SILJA EISTO
All fuel used in production at Metsä Fibre’s pulp mills and sawmills will be fossil free by 2030. Mill production is already 96 per cent fossil free. New investments will play an important role in reach- ing this target. “The Kemi bioproduct mill and Rauma sawmill are our key investments in terms of achieving fossil-free pro- duction,” says Marko Ruottinen , Sustainability Manager at Metsä Fibre. Like the Äänekoski bioproduct mill, production at the new Kemi mill will be fossil free from the outset, and only bio-based fuels will be used at the mill. The Jout- seno pulp mill already runs free of fossil fuels during normal operations. TAKING ADVANTAGE OF SYNERGIES The synergies between Metsä Fibre’s pulp mills and sawmills promote fossil-free production. The Rauma sawmill, due to 2022, will obtain heat and electricity from the surplus energy generated by the pulp mill op- erating in the same integrated unit. The new sawmill in turn will enable the pulp mill to operate free of fossil fuels in the future. “The lime kiln at the Rauma pulp mill is currently powered by fossil fuels. After the completion of the Rau- ma sawmill, its by-products can be used as biofuel for the lime kiln. However, this calls for additional investments,” Ruottinen points out. By 2030, fossil-free alternatives will also replace fossil
fuels when production is ramped up after maintenance shutdowns at the Rauma and Joutseno pulp mills.
RESOURCE EFFICIENCY AT THE CORE In terms of the carbon footprint of production, it is also essential to ensure that production unit operations are resource efficient as well as fossil free. “Our mills and processes will be made resource effi- cient, all our raw material will be fully utilised, and the use of chemicals will be minimised,” says Ruottinen. The continuous improvement of resource efficiency is a key criterion in new projects and investments. “One of our goals is to reduce water consumption, which will help improve energy efficiency.” Investments, innovation, and the harnessing of new technology will boost the resource, energy and environ- mental efficiency of mills. For example, chemicals used in production are recy- cled efficiently, and production side streams are used to produce bioenergy and some of the production chemi- cals required. The secondary heat from production will also be utilised as efficiently as possible. Metsä Fibre’s pulp mills have an electricity self-suf- ficiency rate of around 170 per cent. They account for eight per cent of the electricity generated from renew- able energy sources in Finland. “Electricity self-sufficiency is a sign of our resource efficiency, and we aim to maximise the volume of bio- energy sold to others,” says Ruottinen. •
Marko Ruottinen Metsä Fibre’s Sustainability Manager.
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GET TO KNOW KUURA
Kuura from Finland to the world A unique wood-based textile fibre named Kuura is made from pulp. Its raw material is wood from sustainably managed Finnish forests.
JENNY BELITZ-HENRIKSSON, photo METSÄ GROUP
There is nothing special about textile fibres as such; more than 100 million tonnes of them are produced in the world every year. The most important raw material for textile fibre is fossil oil, which is used to make, for in- stance, polyester fibres. The second most common raw material for textile fibre is cotton. It is significant that the manufacturing methods for both of these put a lot of strain on the environment. “Wood-based textile fibres are already manufactured on a large scale, but only about a third of them can be produced sustainably. Our goal is to develop a better concept for society and the environment,” says Niklas von Weymarn , CEO of Metsä Spring, Metsä Group’s in- novation company. Wood-based textile fibres are usually made from dis- solving pulp. Metsä Group’s idea, in contrast, is to make textile fibre from Metsä Fibre’s paper pulp – and this is completely unique. DEBUT AT JAPAN FASHION WEEK Von Weymarn talks about an advanced direct-disso- lution method that came into existence more than 10 years ago. At that time, the University of Helsinki and Aalto University co-developed a new chemical for Metsä Fibre for dissolving paper pulp efficiently. Since then, Metsä Spring and the Japanese ITOCHU Corporation have established a joint venture, which has born fruit in the form of the demonstration plant that makes the unique textile fibre named Kuura. The demo plant operates alongside the Äänekoski bioproduct mill. Kuura was launched in March 2021 together with ITOCHU and the clothing brand THE RERACS at the Japan Fashion Week. However, clothes made of Kuura are not yet on sale.
“Before we can produce Kuura commercially, we have some issues involving technology and the market. We are trying to resolve these at the demonstration plant and together with ITOCHU. The demonstration phase is likely to last at least until the end of 2022,” says von Weymarn. GOOD ENVIRONMENTAL IMPACT ASSESSMENT RESULTS The undried paper pulp used for making Kuura textile fibre is produced at Metsä Fibre’s Äänekoski bioproduct mill. Kuura, in turn, is being developed at the demon- stration plant that operates in conjunction with the bi- oproduct mill. The steam, water and electricity needed to make Kuura are obtained from the bioproduct mill. This means that Kuura’s production is fossil-free and utilises the Ääne- koski bioproduct mill’s partner ecosystem. In spring 2021, the private Spanish research institute CARTIF assessed the environmental and social perfor- mance of Kuura in relation to commercial textile fibres. The results were very good. The environmental performance of Kuura proved to be better and its impact on climate change smaller than cotton and other commercial cellulose fibres, such as viscose and lyocell. Von Weymarn praises Metsä Group’s willingness to take the risks that developing new products always in- volves, and says that credit for the initial development work belongs primarily to Metsä Fibre and its partners at the time. ”Kuura is an excellent example of a new kind of po- tential innovation based on the advanced processing of pulp that can be produced within Metsä Fibre’s bio- product mill concept.” •
Niklas von Weymarn CEO of Metsä Spring. Before taking up his current position he served as Vice President, Research at Metsä Fibre from 2012 to 2018.
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To help understand pulp price levels at any given time, indices that track price development are key tools for buyers and sellers alike. Their significance increases at a time of heightened market volatility. INDICES THAT FOLLOW THE PULP MARKET
MATTI REMES, photos MIKKO TIKKA, FOTONOKKA
Indices have long been used to monitor price movements in the pulp market. However, in recent months the market has been followed with particular interest. After a steady period lasting just over a year, early 2021 saw exceptionally strong growth in the price of pulp in China. Prices also began to rise in Europe. Fastmarkets FOEX PIX indices are most commonly used on the European pulp market. One monitors the prices of long-fibre pulp (Northern Bleached Softwood Kraft Pulp, NBSK) and the other short-fibre pulp (Bleached Hardwood Kraft Pulp, BHKP). There are also dedicated indices for the Chinese and North American markets. “The PIX indices are based on pricing data gathered from both buyers and sellers. Since we are an independent oper- ator in the pulp market we collect data from both parties”, explains Fastmarkets FOEX’s Director Lars Halén . The PIX indices are updated weekly. Fastmarkets FOEX does not provide exact figures on the matter, but according to Halén, price data representing by estimation roughly half or more of market pulp volumes in Europe is provided on a regular basis for calculation of the index. “Our sample size is large enough to calculate a com- prehensive and reliable index. In order to guarantee our impartiality, an external auditor regularly reviews the pro- cesses we use,” states Halén.
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GPP example, tailored and weighted by customers
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Indices are needed to help with price discovery, so that transactions can be carried out efficiently.
EUROPE NBSK PIX NET EUROPE NBSK TTO DERIVED CHINA NBSK PIX NET CHINA NBSK TTO DERIVED USA NBSK TTO DERIVED GPP PRICE (WEIGHTED)
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PRICING DATA FROM BUYERS AND SELLERS In the PIX indices, the price of pulp is given in US dollars per tonne. Prices collated in the European indices are the gross prices agreed between buyer and seller, and do not include any discounts provided by the pulp seller. “The major weakness of gross price-based indices is that no one has actually made a transaction at the reported price. Consequently, the indices do not tell external parties the actual price level of pulp, but pulp trade professionals can use the indices as a reference in transactions,” explains Petri Jokinen , a partner at consulting firm Jay Partners. The PIX indices have a short delay in reacting to pulp mar- ket price changes. On the other hand, indices that monitor spot prices in the pulp market are quite sensitive to change. Such indices include the TTO indices published by Trade Tree Online. There are TTO indices for long- and short- fibre pulp (North America, Europe, and China), as well as global indices covering fluff, dissolving, and BCTMP pulps. One of the founders of TTO, Fraser Hart , explains that the company has been carrying out monitoring since 2016. “We wanted to offer an option that provides a compre- hensive and up-to-date picture of net pulp prices. Spot pric- es allow pulp to be traded at current market prices, so TTO reacts to even small changes in pulp supply or demand.” TTO’s data comes from buyers and sellers who report confidentially each month on pulp batches traded and the prices involved. This pricing data is then adapted into index values using a standardised calculation method. The base period for the TTO indices is May 2016, when the index value was 100. For example, in May 2020 the TTO index value for long-fibre pulp in Europe was 159, which means that the price had risen 59 per cent from the index’s starting point.
SPOT TRADE FOCUSED ON DEVELOPING ECONOMIES Hart says that, depending on the market situation, TTO indices are used by both buyers and sellers who do not want to base their transactions on indices that react more slowly to market developments. Parties purchasing pulp on the spot market include pa- per product producers, who unexpectedly need more pulp than can be provided under their agreement with their pulp supplier. In turn, pulp producers sell excess pulp to the spot market if they have more pulp than is required by customers under contract. “A large proportion of pulp on the open market goes to emerging economies, where local pulp buyers make shorter-term agreements, because demand for the end product can vary from month to month,” explains Hart. USEFUL TOOLS FOR PRICE DISCOVERY Compared to many other commodities, the price cycles for pulp are relatively long. However, Petri Jokinen points out that buyers and sellers still need indices to help with price discovery, so that transactions can be carried out efficiently. “Indices offer some degree of consensus on the price lev- el of the product. Transactions based on reference prices benefit all market operators.” According to Lars Halén, it is current standard practice for pulp prices to be reviewed monthly. “Indices make negotiations easier. Buyers and sellers can refer to the indices and negotiate a mutually satisfactory price on that basis.” Indices are also useful for investment banks operating in commodities markets, who help pulp market operators raise capital and manage risks by hedging against price fluctuations.
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“All pulp market operators require some kind of fixed point against which to assess prices. In price formation, indices are beneficial as they indicate the current price level and market situation relatively well,” says Nicolas Ginman , managing director and head of pulp and pa- per trading of Macquarie Group, an investment banking company. Additionally, indices are used in pulp price hedging services to pulp buyers or sellers, provided by banks and other finance sector operators, to protect against price fluctuations. “Pulp buyers are particularly keen to make use of hedg- ing. It provides certainty about what they will have to pay for pulp in the future, even if the market changes.” VOLATILITY HINDERS PRICE FORECASTING Both Fastmarkets FOEX and TTO are independent opera- tors that do not provide forecasts on pulp pricing trends. However, indices are used by analysts monitoring the pulp market to help them estimate the market in the future. With many years of monitoring the pulp market under his belt, Petri Jokinen states that forecasting pulp prices
has never been easy. In recent years it has become even more challenging, due to increased price volatility. “Pulp prices cannot be predicted from the past, since they are naturally affected by more factors than just their history. Of course, you can predict that if a price has been high, it is likely to fall. However, no one knows when this will actually happen.” By Jokinen’s estimate, the primary factor behind the in- crease in volatility is the growth of China into one of the world’s largest pulp buyers. “The role of speculative buyers in the market has grown, and they aim to buy more pulp than they need when prices are low. Changes in the supply of pulp also amplify volatility. Jokinen believes that in recent years there has been an increase in supply shocks for a variety of reasons. “In particular, the market pulp industry in the Northern hemisphere has generally underinvested, making supply more susceptible to technical disturbances. The price of pulp has also been affected by mild winters in northern regions, making it more challenging to arrange sufficient raw material supply for pulp mills.” •
Lars Halén Director of pulp indices at Fastmarkets FOEX, which maintains price indices for for- est industry products. He has worked with indices since 1999, previously for paper exporter Finnpap.
Fraser Hart Co-founded Trade Tree Online, a company specialising in producing pulp price indices, in 2016 with a business partner. Prior to this he served as director of sales for North America at Resolute Forest Products.
Petri Jokinen Partner at consulting firm Jay Partners. He has more than 20 years of international experience in consulting on pulp and other areas of the forest industry.
Nicolas Ginman Managing director and Head of pulp and paper trading at Macquarie Group. He has specialised in risk management and hedg- ing for pulp and paper sector operators.
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Metsä Fibre has developed the new Global Pulp Price (GPP) price mechanism service, which offers customers more flexibility in choosing the best pulp pricing model for them. Both PIX and TTO pulp indices are used in the service. Based on what Metsä Fibre’s customer chooses, the prices for pulp batches could be based on the previous month’s PIX price index or could follow the index’s monthly de- velopment. On the other hand, the parties could agree that their transactions will follow market-based pricing, based on the TTO index for spot prices. “Based on their own appraisal of the situation and risk appetite, the customer can choose how much price weight- ing they want to put on PIX indices, which follow market prices more slowly, or faster-reacting TTO indices,” states Metsä Fibre’s VP, Sales Europe Mikael Lagerblom . Lagerblom is keen to emphasise that it is in the interest of all parties in the pulp market that prices are as stable as possible. A further objective of the GPP price mechanism service is that the relationship between supplier and buyer continues at fair market price across cycles. “The level of volatility has grown in the pulp market, making it harder to monitor price indices that are some- times slower to react. GPP allows faster reaction to changes if necessary.” The new system was adopted in autumn 2020 and is now used actively. “We are happy to see that the new service has been re- ceived well and adopted quickly. When it comes to trends in the pulp market and prices, the new service has taken our discussions with clients to a deeper level.” • New pricing model increases choice for customers
Mikael Lagerblom Vice President, Sales, Europe for Metsä Fibre. He previously worked in management-level sales roles at M-real and Metsä Serla.
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Pulp for car parts
Would it sound like fiction if we suggested that car seats and other plastic car parts could be partly made from pulp? Thanks to the Biomotive project, this could be a reality in the near future.
JENNY BELITZ-HENRIKSSON
Metsä Fibre has been taking part in Biomotive, an EU-funded project launched in 2017 to study the suita- bility of pulp fibres for more environmentally friendly composite materials in cars. Metsä Fibre’s partner in the project was TITK – the Thuringian Institute for Textile and Plastics Research. “Our research and development work is based on col- laboration and partners with the best research capabil- ities. TITK has been a great strategic partner for us, and we have carried out research into a new textile fibre process together,” says Anna Suurnäkki , Vice President, Research, from Metsä Fibre. Based in Rudolstadt in the state of Thuringia, TITK is one of Germany’s 130 industrial research institutes and the largest in its region. The institute is a key player in non-university research in Germany. Its team of about 200 includes researchers, laboratory technicians, tech- nical staff, and sales personnel. “It has been a pleasure to work with bio-based poly urethanes and fibres to bring greater environmental sus- tainability to the automotive industry. The partnership with Metsä Fibre has been very close,” says TITK project manager Dr Marcus Krieg . The pulp has come from Metsä Fibre, while TITK has worked on optimising the textile fibre manufacturing process and developing pulp-based composite materials. “Pulp as a raw material and the solvent used in this project were new things for us, but our work was a suc- cess,” Dr Krieg says.
bre to innovate and engage with partners in research and development of selected topics of future relevance. “We have an open mind in tackling the challenges of developing current and future pulp-based products. With active development work there are a great number of ways to generate added value for pulp,” says Suurnäkki. “All our projects have a clear goal. In joint projects the aim can be networking, process development like the Biomotive project, or developing materials. Of course, all our research is ultimately targeted at innovations that will lead to industrial production.” Suurnäkki says that even though pulp has been pro- duced for over a hundred years, its versatility is a con- stant source of surprise. “It is true that almost anything could be made from pulp. However, instead of trying to replace everything, such as all plastics, with pulp-based solutions, it makes sense to focus on areas with the greatest positive impact economically and from the perspective of sustainable development.” She emphasises the importance of collaboration be- tween companies in the research and development of new pulp-based products. “We are always talking with companies from different value chains about how pulp can be developed for ap- plications where it adds value and meets expectations.” The four-year project is coming to an end in November 2021, but cooperation with TITK will continue. “We have analytical know-how and special equipment that can help Metsä Fibre to optimise their processes, for example at Äänekoski bioproduct mill,” Dr Krieg notes. • READ MORE: BIOMOTIVE.INFO
GOAL-ORIENTED PARTNERSHIP Jointly financed projects are one platform for Metsä Fi-
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