UPM-Kymmene at WAN SFN Partners' Market Research Meeting

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UPM-Kymmeneat WAN SFN Partners' Market Research
Meeting

• February 14 2003

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UPM-KymmeneBrief Company Introduction
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UPM-Kymmene Key figures 2000-2002
2000 2001 2002
Turnover total EUR million USD million 9,600 8,900 9,900 8,900 10,500 9,900
Profit before extraordinary items EUR million USD million 1,700 1,600 1,300 1,200 790 750
Paper production Sawn timber Plywood Chemical pulp 1,000 tons 1,000 m3 1,000 m3 1,000 tons 8,300 2,120 800 1,970 8,300 2,040 790 2,040 10,050 2,200 910 2,100
Personnel at 31.12 Personnel at 31.12 32,800 36,300 35,600
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UPM-Kymmene Turnover by division 2002
Other operations
Wood Products Industry
6
13
Magazine Papers
33
Converting Industry
14
13
21
Newsprint
Fine Speciality Papers
Total EUR 10,500/USD 9,900 million
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UPM-Kymmene Paper sales by product category
2002
Speciality Papers
Woodfree Coated
Coated Papers
Woodfree Uncoated
SC Magazine
Newsprint
Total 9.7 million tons
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Paper and pulpcapacities 2003
'000 tons Mag News Fine Specs. Pulp
Augsburg 480
Blandin Paper 345
Caledonian Paper 270
Changshu 350
Chapelle Darblay 320
Docelles 125
Jämsänkoski 700 115
Kaipola 300 400
Kajaani 160 445
Kaukas 560 720
Kymi 920 525
Nordland Papier 1,370
Miramichi 450 220
Rauma 1,150
Schongau 210 460
Schwedt 290
Shotton 470
Steyrermühl 190 300
Stracel 250
Tervasaari 400 235
Voikkaa 400 100
Wisapaper 175 625
Total Capacity 5,465 2,785 3,455 2,325
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Printing papers spectrum
Woodfree
Relative price
Mechanical coated
UPM Finesse
UPM Fine
Mechanicaluncoated
UPM Star
UPM Cote, UPM Ultra
UPM Satin, UPM Matt
UPM Cat, UPM Lux, UPM Max, UPM Eco
UPM Brite, UPM Opalite, UPM Book, UPM Color,
UPM Norm
Relative quality
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Paper grades by product category
News UPM Norm
Chapelle Darblay 220
Kaipola 150
Kajaani 225
Schongau 460 x)
Schwedt 290
Shotton 470
Steyrermühl 300
Total capacity 2,115
Capacity 000 tons
x) combined capacity for UPM Brite and
UPM Norm is 460

HSWO CSWO
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Business Technology Intelligence at UPM-Kymmene
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Business Technology Intelligence is part of
Corporate Business Development at UPM-Kymmene
Purpose to facilitate strategic decision making

• monitor and analyse the business environment
• competitors, customers and relevant technologies
• ensure that information reaches decision-makers
• deliver quality information
• identify, assess and recommend external
  information providers
• cooperate at all levels both internally and
  externally

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Porter's Industry Analysis Applied
Competition
Economic Development
End Users
UPM-Kymmene's competitive position
Suppliers
Customers and Customer Industries
Substitutes / Alternative Materials
Technology
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BTI Scope
Customer Intelligence
Competitor Intelligence
Information Materials
Technology Intelligence
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Customer Intelligence

• Scope
• individual customers
• customer industries publishing, printing,
  merchanting etc
• advertising
• How
• news monitoring distribution continuously
• customer databanks
• update data on main customers regularly, others
  on request
• develop content structure
• take part in / conduct studies
• coordinate external study purchases
• Key Internal Customers
• sales marketing functions
• divisional business development
• corporate functions

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BTI Services to Internal Customers
Internal Studies Databanks Coordination
Prioritisation with Divisions
NEWS
DATABASES
STUDIES

• Information searches
• technical/scientific
• business relevant
• Bigger study projects - in cooperation with
  divisions other functions or external
  organisations

• continuous monitoring distribution
• External news services, eg
• Esmerk (FIN)
• Paperloop

• Competitor Monitor
• Customer Intelligence
• Market Trends Economic Review
• Conference Watch
• Info Materials
• Books
• Research Reports

External Information Sources Evaluation
Coordination of Purchasing
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Newsprint Markets
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NewsprintLargest producers in the world 2003
Capacity '000 tons
Consolidation
Other 59
Top 5 41
) incl. std. news, TD and other mech. uncoated
specialties, excl. SC grades.
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NewsprintDemand and capacity 2002e
North America
Western Europe
15,6
10,5
9,8
Oth Europe
China S. Korea
12,1
2,5
1,4
3,9
3,1
0,7
1,0
Japani
1,0
1,0
3,9
Oth. Asia
3,7
0,4
3,6
2,5
0,8
Africa
Latin America
0,6
0,5
1,8
1,1
Oceania
0,8
0,8
Sources Cepiprint, PPPC, SvanData Publication
Papers, Marketing
Demand Capacity
37,1 mill. tons 41,1 milj. tons
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Newsprint and prtg wrtg paper consumptionand
the Proliferation of Electronic Media in Western
Europe
Expansion ofInternet/WWW
CD-ROMs
Laser Printers
Satellite TV Mini Computers
PCs
Cable TVVCR
ColourTV
Printing and writing papers
MainframeComputers
RadioCinemaTV
Newsprint
Source Jaakko Pöyry Consulting
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GDP and paper consumption per capita 2001
Paper consumption, kg/capita
kg/capita World 52 N. America
303 W. Europe 201 China 29
USA
Belgium
Japan
Germany
UK
Finland
Italy
France
Spain
Singapore
Korea
Hong Kong
Czech Rep.
Total World
Poland
Mexico
China
Argentina
S. Africa
Indonesia
Brazil
Russia
India
GDP (PPP), per capita
Source PPI Annual Review 2002, World Bank
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Newspapers are the largest end-use for graphic
papers in Europe
Graphic Papers Demand 2001
Source Cepi/Amec End-Use Study 2002
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Paid-for newspapers are the largest buyers of
paper for newspapers in Europe despite the fast
growth of free newspapers
Total paper demand for newspapers 8.825 million
tonnes
Source Cepi/Amec End-Use Study 2002
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Potential Interesting Study Areas?

• New Electronic Media and their effect on
  newspaper publishing new concepts?
• internet, mobile, interactive /digi TV etc
• newspaper segments local, national, free,
  paid-for
• revenues, cost structures
• paper grades, formats
• Advertising development forward looking
• separate data for print and electronic media
  lacking currently
• Digital Printing and/or other printing technology
  developments