Key figures of the group

Transcription

1 ANNUAL REVIEW 21

2 Key figures of the group Metsä-Botnia is one of the leading producers offering the broadest portfolio of chemical pulps in the world. Our pulps, both bleached softwood and hardwood, are ideally suited for manufacturing highquality fine and magazine papers, boards as well as speciality and tissue papers. KEY FIGURES Sales EUR million 1, ,184 Operating result excl. non-recurring items EUR million % of sales Operating result EUR million % of sales Result before tax EUR million % of sales Result for the period EUR million Net liabilities / % of sales Equity ratio % Net gearing % Return on capital employed % Gross capital expenditure EUR million Personnel ,111 1,267 KEY FIGURES OF THE GROUP

3 Pulp deliveries , tonnes 2,5 Sales EUR million 1,6 Return on capital employed (excluding non-recurring items) % 6 2, 1,5 1, 5 1, * 9* * 9 * * 9 * 1-1 Softwood pulp Hardwood pulp Moving 3-year average Operating result (excluding non-recurring items) EUR million 4 Result after financial items (excluding non-recurring items) EUR million 4 Equity ratio % * 9 * * 9 * * 9 * 1 Moving 3-year average Net gearing EUR million % Personnel at year end 21 1,8 1,6 1,4 1,2 1, * 9 * * 9 * 1 2, 1,5 1, 5 Interest bearing liabilities Net gearing, % Shareholders equity *Continuing operations CONTENTS 1

4 Botnia in brief Metsä-Botnia is a responsible and cost-effective pulp manufacturer for leading paper, board and tissue producers in Europe and the Far East. At full capacity, Botnia produces 2.4 million tonnes of pulp at its mills in Joutseno, Kemi, Rauma and Äänekoski. Botnia s product range, the most extensive in the pulp market, also includes pulp from other leading manufacturers. At an annual level, Botnia sells and markets approximately 3.7 million tonnes of pulp. Approximately one half of sales go to the international market and the other half to its owners factories. Botnia also owns the modern Svir Timber sawmill in Russia. In 21, the company s sales totalled EUR 1.4 billion and it employed some 9 people. Botnia is part of Metsäliitto Group. UPM- Kymmene owns 17 per cent of Botnia s shares. VISION MISSION Botnia s customers value the company as their preferred supplier for high-quality pulps and services that bring benefit to their business. VALUES Reliability Renewal Cooperation Botnia s mission is to be the most competitive and efficient player in the pulp industry. These values steer Botnia s operations in implementing its strategy and ensure responsible profitability. 2 BOTNIA IN BRIEF

5 OPERATIONAL MODEL Management Customership Sourcing and Operations Business Development Business Support and Steering Production Sales and Marketing Customer Botnia s structure is simple and unified, guided by its customers needs. The business operations are guided by three Core Processes: Management, Customership, and Sourcing and Operations. Botnia s processes determine the company s direction and operational model, and their implementation is supported by the competence centres: Business Development, Business Support and Steering, Production, and Sales and Marketing. Botnia s operative activities and personnel are organised in Competence Centres. The company-level Competence Centres are distributed between different mill locations but are centrally managed. CORNERSTONES Botnia s objective is to strengthen its position as one of the most effective players in the pulp business. Botnia s main product is highquality bleached softwood pulp, which is delivered to markets in Finland, other Europe and China. Customership We invest in competence and services that support our customers business operations and ensure the continuity and profitability of customer relationships. Botnia provides its customers with the market s most extensive range of pulp both from its own mills and from other manufacturers. Cost-efficiency The mills are developed in accordance with life-cycle plans. In its operations, Botnia aims to improve environmental efficiency, the management of production costs and the use of bioenergy, in particular. Competence Competence development is based on specifically selected core competence areas, which are strengthened by means of personnel competence objectives and training programmes supporting them. BOARD OF DIRECTORS Kari Jordan Chairman, Metsäliitto Group, President and CEO Hannu Anttila Member, Metsäliitto Group, Executive Vice President, Strategy Martti Asunta Member, Metsäliitto Group, Chairman of the Board Mikko Helander Member, M-real Corporation, CEO Juha Mäntylä Member, Metsäliitto Group, Executive Vice President, Wood Supply Tapio Korpeinen Member, UPM-Kymmene Corporation, Chief Financial Officer Tapani Sointu Deputy Member to Tapio Korpeinen, UPM-Kymmene Corporation, Vice President, Corporate Structure, Taxation and Real Estate MANAGEMENT GROUP Ilkka Hämälä President and CEO Ismo Nousiainen Senior Vice President, Production Kaija Pehu-Lehtonen Senior Vice President, Business Development Jyrki Yrjö-Koskinen Senior Vice President, Sales and Marketing Mikael Westerlund Senior Vice President, Finance BOTNIA IN BRIEF 3

6 Review by the President and CEO Ilkka Hämälä Oy Metsä-Botnia Ab, President and CEO 4 REVIEW BY THE PRESIDENT AND CEO

7 The year 21 was strong in the pulp business. At the end of the 29 recession year, the market started to recover, demand stabilised and the increase in the price level of pulp continued until mid-21. In addition to the economic recovery, the market situation was affected by problems in several areas important in terms of pulp production: the earthquake in Chile as well as difficulties in the availability of wood in Indonesia and southern parts of the United States. In the tight market situation, Botnia succeeded in providing its customers with good service. The year was also good in terms of production. We broke annual production records at three mills and were thus operating at full capacity. THE BROADEST PORTFOLIO OF PULPS In 21, we sold UPM-Kymmene s and M-real s market pulp in accordance with the agency agreements signed in the previous year. We continued to sell eucalyptus pulp from Cenibra in the European market. The extensive product range and customer support provided by Botnia s organisation were well received by our customers. WE INVEST IN OUR MILLS During the year under review, Botnia s Board of Directors decided on significant development investments at the Kemi mill, namely the construction of new caustizing and water plants for the production of boiler chemicals and process water for the mill. The plants are scheduled to be commissioned by the end of 211. These investments will safeguard the operating reliability of the Kemi mill and improve the efficiency of production. FORERUNNER IN ENERGY EFFICIENCY In 21, plans were also made to improve the efficiency of production and use of bioenergy. At the beginning of 211, Botnia s Board also made a decision concerning investments in a gasification plant at the Joutseno mill. A gasification plant turns tree bark into combustion gas which replaces the fossil fuel in the mill s lime kiln. After the completion, the mill will be one of the first pulp mills in the world that does not use fossil fuels at all during normal production. WE ARE A RELIABLE PARTNER For a long time, Botnia has followed the principle of continuously developing the competitiveness of its operations. We engage in development activities in all areas of our operations every day in order to be an even more effective and competent partner for our customers. The cornerstones of our strategy are customership, competence and cost-efficiency based on our values of reliability, cooperation and renewal. With these as our foundation, we are profitable in a responsible manner in collaboration with our partners and customers. We engage in development activities in all areas of our operations every day in order to be an even more effective and competent partner for our customers. REVIEW BY THE PRESIDENT AND CEO 5

8 Year 21 at Botnia 21 The high level of pulp prices ensured Metsä-Botnia s positive financial results and sales. The price of pulp declined slightly towards the end of the year. The mills operated at capacity, and annual production records were broken at several mills. Brand new causticisation and water plants were built at the Kemi mill. 211 The price of pulp is forecasted to decline slightly. The market situation and demand for pulp are nevertheless expected to remain strong and Botnia s profitability high. A new bark gasification plant will be built at the Joutseno mill, improving the efficiency of renewable energy usage. It is due for completion in 212. The strong growth in the price of pulp due to the recovered market situation significantly improved Botnia s result and sales, compared to 29. Supply and demand for pulp were in balance during the year under review, and the positive increase in prices continued throughout the year. The price of pulp was at its highest in the second quarter. Botnia s sales excluding non-recurring items were EUR 379 million. Botnia was able to produce pulp at full capacity, and the Joutseno, Rauma and Äänekoski mills broke their annual production records. The total production volume of the mills was 2,173, tonnes. Since December 29, Metsäliitto Cooperative has owned approximately 53 per cent of Botnia, after UPM-Kymmene reduced its ownership in the company with the sale of Botnia s operations in Uruguay to UPM- Kymmene. UPM-Kymmene continues to own approximately 17 per cent of Botnia, whereas ownership of M-real in the company is approximately 3 per cent. Botnia is a sales channel for market pulp for M-real, UPM- Kymmene and Cenibra. MARKETS During the first half of the year, the supply of pulp was restricted by the shortage of wood, caused by heavy rains in Indonesia and in the southern states of the USA. The February earthquake in Chile almost completely halted the country s pulp industry for a couple of months. The price of pulp was at its highest in June, with the price of softwood pulp at USD 98 per tonne and that of birch pulp at USD 92 per tonne. In the summer, a large pulp mill was commissioned in China, causing temporary over-supply in the Chinese market. The price of pulp declined slightly in the autumn but increased again towards the end of the year. MAJOR EVENTS In February, Botnia s Board of Directors decided on major investments at the Kemi mill. Brand new caustizing and water plants will be built in the mill area, which will improve the mill s operating reliability and decrease its environmental impact. The total value of the investment is approximately EUR 6 YEAR 21 AT BOTNIA

9 Sales by market areas % Production 21 Pulp mills 1, tonnes Capacity Personnel* Joutseno Kemi Rauma Äänekoski Total 2,173 1,878 1,963 2, Capacity utilisation % Svir Timber sawn goods 1, m *Personnel at year end Finland 63 Sales EUR million Other countries * 9 * 1 *Continuing operations 1,6 1,2 8 4 DID YOU KNOW? A modern pulp mill produces more than 5 per cent of energy in excess of its own need. This excess energy is sold to the national grid as green electricity or used in the manufacture of paper and cardboard. 4 million. Construction began in October, and the new plants will go into operation at the end of 211. Under a deal signed in June, Botnia sold some of the old machinery from the Kaskinen pulp mill, which shut down in March 29, to a buyer in Asia. The company decided to implement an RFID system, developed for the wireless and automatic remote identification of goods flows, in the tracking of pulp deliveries. The intention is for all of the company s mills and key loading and unloading ports to implement the RFID technology by the end of 211. The system will improve the overall planning and routing of goods. Botnia was ranked among the top three companies in the Quality Award contest organised by Suomen Laatukeskus (Excellence Finland). The company received the five star Recognised for Excellence award, which means it surpassed the 5-point level in the quality award assessment. The company participated in the contest two years ago as well, receiving more than 4 points in the assessment. In Joutseno and Äänekoski, common operations of the different business areas of the Metsäliitto Group were streamlined. In Äänekoski, a common steering model for service providers was implemented for Botnia, M-real and Äänevoima. The positive results of the customer satisfaction survey completed during the year under review indicate that the customeroriented operating method the company has been investing in is paying off. The scores improved in all survey segments. Technical support in the customer s process and active communications improved in particular. MAJOR ENVIRONMENTAL IMPROVEMENTS Botnia s mills are world-leading in terms of environmental performance. During the year under review, the Kemi mill improved the quality of black liquor, which has an impact on the yield of tall oil and the functioning of the recovery boiler. Dust emissions at the Äänekoski mill declined due to the improved efficiency of the electric filter for purifying combustion gases. The efficiency ratio of raw material was improved at the Joutseno mill. About 7 per cent of the wood chip sieving loss, which previously ended up at landfills, can now be returned to the production process. Furthermore, a new steam kiln has improved the combustibility of bark generated in the debarking plant. The noise level reduction efforts at the Joutseno mill were successful. At the Rauma mill, management of organic burden caused by the mill s wastewaters was improved. NEAR-TERM OUTLOOK At the beginning of 211, supply and demand for pulp are well in balance, in particular in terms of softwood pulp. Manufacturers pulp inventories are at a relatively normal level, and the customers pulp inventory levels vary between normal and low. During 211, some previously closed mills will reopen but no actual new market pulp capacity is on the horizon. The extreme weather conditions around the world create specific challenges to the availability of wood in the pulp industry. YEAR 21 AT BOTNIA 7

10 Sustainable and responsible business Metsä-Botnia s business operations are responsible. Profitability is improved while taking the needs of the environment, its personnel and other stakeholders into consideration now and in the future. Botnia is dedicated to continuously developing its operations, improving its services and making a profit in a sustainable manner. The development of our mills is based on longterm life cycle planning, which ensures the efficiency and competitiveness of our production units. Botnia plans its investments, major repairs and development measures to ensure that operations are as cost-effective as possible throughout the entire life-cycle of the production unit. Botnia wants to be a responsible, reliable and expert partner for its customers. Products are developed continuously in order to better meet customers needs. The company explores new business opportunities to support and strengthen its core business. HUMAN RESOURCES DEVELOPMENT PLAYS A KEY ROLE Personnel competence is an important aspect of Botnia s responsible operations. The company s key personnel programme was renewed with the aim of safeguarding top-level key resources and competitiveness in future challenges. The operational model is based on the diverse talents of its personnel, which are developed by means of per- sonnel competence analyses and training programmes based on such analyses. A personnel survey covering Botnia s entire organisation is carried out annually. The target is to map the awareness of the company s strategy and objectives among the personnel, and to determine if the management and competences support these objectives. The survey results are translated into measures to improve the functioning of the work community. Maintaining personnel well-being throughout their long working careers needs support. In 21, Botnia launched a new development programme to improve well-being at work. ZERO ACCIDENTS A GOAL IN OCCUPATIONAL SAFETY A safe working environment generates effective and high-quality operations. Botnia s goal is to have an accident-free workplace by 212. All mills have compiled objectives and indicators for proactive occupational safety. Thanks to the high occupational safety objectives, Botnia s accident frequency has been cut in half over the past two years, with the Rauma mill operating continuously without accidents for more than 5 days. The com- 8 SUSTAINABLE AND RESPONSIBLE BUSINESS

11 pany creates a good working environment through safe conditions and a strong safety culture, to which everyone is committed. PIONEERING AND EFFICIENT USE OF BIOENERGY Determined investments and long-term work towards energy efficiency enable Botnia to be an effective producer and user of bioenergy. The self-sufficiency rate of our pulp mills in terms of electricity is approximately 15 per cent. In practice, this means that the amount of electricity produced by Botnia s mills, which the company does not need itself, corresponds to the annual electricity consumption of approximately 41, Finnish single-family homes. The excess energy is sold as carbon dioxide-neutral wood fuel and heat. The excess heat and other wood-derived by-products generated in the manufacture of pulp, such as bark, turpentine and tall oil, generate ten per cent of Botnia s total sales. Botnia wants to be a pioneer in the use of bioenergy, and to this end the company is continuously improving its energy-efficiency. At the beginning of 211, Botnia made a decision to build a bark gasification plant at the Joutseno mill. The bioenergy produced in the gasification plant will replace the fossil fuel of the lime kiln. During normal operations, the mill becomes a completely carbon dioxide-neutral production unit. In replacement investments, improving energy-efficiency is also explored. In conjunction with the new water treatment plant being built at the Kemi mill, heat recovery is improved, reducing the annual heat consumption by 3.5 per cent. WE KNOW THE ORIGIN OF THE WOOD WE USE The most important raw material for Botnia, part of Metsäliitto Group, is wood procured DID YOU KNOW? Once the new bark gasification plant is completed, Joutseno pulp mill will become a carbon dioxide neutral plant. Fossil fuel is replaced by biofuel during standard production. and delivered by the parent company Metsäliitto Cooperative from sustainably managed forests. We always know the origin of the wood we use, the majority coming from Finnish forests. Last year, the proportion of Finnish wood was 88 per cent. Eighty-four per cent of wood used by Botnia is certified. Certification promotes sustainable forestry and sends a message to customers on sustainably manufactured products. When operating at full capacity, Botnia s mills use 12.5 million cubic metres of wood per year. Wood is a renewable, recyclable and energy-efficient raw material which can be wholly utilised as pulp, energy and other by-products. By regenerating forests, new wood grows at a rate faster than it is harvested. SYSTEMATIC EFFORTS TO REDUCE THE BURDEN ON THE ENVIRONMENT The pulp industry traditionally uses plenty of water, and high water usage increases energy consumption and the volume of effluent. In order to reduce water usage, Botnia invests in the continuous improvement of its equipment base and operating methods, and uses all raw materials effectively. An example of this is the reduction of the effluent volume by 25 per cent per tonne of pulp produced over the past four years. Botnia is actively looking for technical solutions which enable it to increase the reuse of water in its processes. Botnia systematically monitors the environmental impacts at all of its mills by measuring, among other things, the total flow, chemical oxygen demand, amount of organic chlorocarbons and nutrient load of effluent. In air emissions, the items measured include dust and sulphur compound emissions as well as the quality of air in the areas surrounding the mills. The internal environmental targets that have been set for all indicators are stricter than the permit values set by the authorities. No. of accidents at work, own personnel No. / million work hours Proactive safety work safety observations No , 4, 3, 2, 1, SUSTAINABLE AND RESPONSIBLE BUSINESS 9

12 Environmental balance Joutseno Kemi Rauma Äänekoski Total 21 Svir Annual production Pulp t/a 594,56 533, ,546 51,632 2,173,264 Saw mill m 3 /a 27,724 Wood consumption Total wood consumption 1, k-m 3 /a 3,289 2,761 2,961 2,272 11, Certificated wood % Effluents Waste water Flow 1, m 3 /a 18,889 18,78 12,615 15,95 65,37 12 Solids t/a ,641 6 COD Cr t/a 6,396 8,371 7,69 6,331 28, BOD 7 t/a tot. P kg/a 8,267 6,237 5,529 9,71 29,743 2 tot. N t/a AOX t/a Air Process* SO 2 t S/a TRS t S/a NO X t NO 2 /a 1, ,837 CO 2 - fossil 1, t/a biofuel 1, t/a 1,34 1,284 1, ,954 Dust t/a Energy generation Bark for sale Bark for sale Bark for sale SO 2 t S/a NO X t NO 2 /a CO 2 - fossil 1, t/a biofuel 1, t/a Particles t/a Waste To landfills (wet tonnes) t/a 18,74 26,414 25,746 44,15 114,969 1, To landfills (dry tonnes) t/a 9,227 7,83 16,299 12,531 45,86 5,625 Hazardous waste t/a Process fuels Lime kiln and torch GWh/a oil GWh/a natural gas GWh/a Energy Heat production TJ/a 11,457 1,564 9,852 7,198 39, black liquor TJ/a 11,191 8,686 9,73 7,123 36,73 - bark / malodorous gases TJ/a 1,68 6 1, bought fuel TJ/a Biofuel TJ/a 11,191 1,366 9,736 7,123 38,416.2 Biofuel % % Power production GWh/a ,53 Power consumption GWh/a , Net share of pulp mill % *) pulp process emissions 1 ENVIRONMENTAL BALANCE

13 Environmental impact management EFFLUENT DISCHARGES During the year under review, Metsä-Botnia s pulp mills operated almost at full capacity, which was reflected in effluent discharges. The effluent volume proportioned to the mills production continued to decrease, particularly at the Kemi mill. Discharges of suspended solids decreased compared to the previous year; however, the discharges of COD, nutrients and halogenated organic compounds increased slightly due to the growth in production. The effluent load from the Äänekoski mill exceeded the phosphorus permit limits in January and May. This was due to the high load and momentary problems in the nutrient dosing of the wastewater treatment plant. In addition, the daily target value of the COD load in effluent was exceeded once at the Joutseno mill when the mill was started up. EMISSIONS INTO THE AIR Malodorous gas emissions into the air from the mills remained the same or decreased slightly compared to the previous year. Sulphur dioxide and nitrogen oxide emissions, however, increased slightly due to the increased production. While particulate emissions decreased significantly at the Kemi mill, they increased at the other production units. The malfunctions in the electrostatic precipitator of the recovery boiler in the Äänekoski mill that significantly increased particulate emissions from the mill was corrected at the end of the year. The target value of TRS compounds was exceeded in two separate months at the Kemi mill when the recovery boiler was shut down. WASTE TREATMENT The total amount of landfill waste increased from the previous year, primarily due to the one-time disposal of process waste that had been in temporary storage. The amount of hazardous waste generated at the mills, however, decreased slightly. DEVELOPMENT PROJECTS In Äänekoski, the recovery boiler s electrostatic precipitator that purifies flue gases was made more efficient and the problems that increased the mill s dust emissions were corrected. A new fibre filter was installed at the Kemi mill to improve the quality of black liquor. This investment improved the yield of tall oil and the functioning of the recovery boiler. At the Joutseno mill, the processing of stick reject generated in production was improved and a steam kiln that improves the combustibility of bark was commissioned. In addition, the noise level at the mill was reduced with the new sound absorber in the oxygen plant. The management of the organic load of effluent from the Rauma mill was improved by more accurate process control and processing of extraordinary discharges. Surveys to develop the management of discharges continue. Environmental investmens at Botnia s Finnish mills 2 21 EUR million ENVIRONMENTAL IMPACT MANAGEMENT 11

14 Environmental permits of pulp mills Effluent Current permit Eastern Finland regional state administrative and Supreme Administrative Court Emissions Current permit Eastern Finland regional state administrative and Supreme Administrative Court Joutseno Kemi Rauma Äänekoski Northern Finland regional state administrative office and Vaasa Administrative Court Northern Finland regional state administrative office and Vaasa Administrative Court Solid waste Current permit Northern Finland regional state administrative office and Vaasa Administrative Court Supreme Administrative Court Supreme Administrative Court Supreme Administrative Court Eastern Finland regional state administrative and Supreme Administrative Court Vaasa Administrative Court Certification BOTNIA PULP MILLS Quality Management System SFS-EN ISO 91 Environmental Management System SFS-EN ISO 141 Occupational Health and Safety Management System OHSAS 181 Food Safety Management System SFS-EN ISO 22 FSC Chain of Custody and Controlled Wood PEFC Chain of Custody with PEFC logo use rights Energy Efficiency System (EES), EN 161 Kosher certificate, Äänekoski mill SVIR TIMBER Quality Management System ISO 91 Environmental Management System ISO 141 Occupational Health and Safety Management System OHSAS 181 FSC Chain of Custody and Controlled Wood PEFC Chain of Custody with PEFC logo use rights 12 ENVIRONMENTAL IMPACT MANAGEMENT

15 Specific emissions from pulp mills in the Nordic countries Specific emissions from Botnia s, other Finnish and Swedish mills producing bleached sulphate pulp are compared below. The figures for Finnish mills in 29 come from Finnish Forest Industries Federation and the figures for Swedish mills from Swedish Forest Industries Federation. Chemical oxygen demand (COD Cr ) kg/pulp tonne Joutseno Äänekoski Rauma Äänekoski Rauma Kemi Chlorine and other halogens bound to organic material in effluent (AOX) kg/pulp tonne Phosphorus (P) g/pulp tonne Kemi Kemi Rauma Joutseno Äänekoski Joutseno Botnia mills 21 Other Finnish mills 29 Swedish mills 29 Botnia mills 21 Other Finnish mills 29 Swedish mills 29 Botnia mills 21 Other Finnish mills 29 Swedish mills 29 SPECIFIC EMISSIONS FROM PULP MILLS IN THE NORDIC COUNTRIES 13

16 Material balance of Botnia s pulp mills in 21 Emissions to air (t/a) Sulphur (S) 475 Nitrogen oxides (NO 2 ) 3,837 Carbon dioxide (CO 2 ) fossil 221, Particles 929 Raw-material Wood (1, k-m 3 /a) 11,284 Chemicals Process fuels Lime kiln and torch / malodorous gas boiler (GWh/a) 849 Water Botnia Production Pulp (t/a) 2,173,264 Tall oil (t/a) 72,872 Turpentine (t/a) 2,79 Heat production (TJ/a) 39,71 Power procuction (GWh/a) 2,53 Share of biofuel (%) 99 Net share (%) 149 Emissions to waste water Chemical oxygen demand COD Cr (t/a) 28,788 Biological oxygen demand BOD 7 (t/a) 643 Phosphorus P (kg/a) 29,743 Nitrogen N (t/a) 367 AOX (t/a) 293 Solid waste (t/a) To landfill 45,86 Hazardous waste 28 WASTE UTILIZATION LANDFILLS Recyclable material sent for reuse. Combustible waste, primary sludge and biosludge either sold as fuel or burned in mill s bark-fired or recovery boiler. Bark sludge and lime dust from lime kiln sent for re-use. Ash used for soil improvement. Every mill has its own landfill. Remaining lifetime 1 2 years. Closings of old landfill sites ongoing on each mill. Community waste sent to municipal landfill site. Leachates treated in the mills biological treatment plants. Hazardous waste sent to hazardous waste treatment plants. 14 MATERIAL BALANCE OF BOTNIA S PULP MILLS IN 21

17 Comparison with GRI recommendations Global Reporting Initiative (GRI) is an international network that seeks to develop principles and indicators that companies and organizations can use to report their sustainability. The use of GRI recommendations is voluntary but already hundreds of companies in the world report their economic, social and environmental performance according to these consistent instructions. Botnia s reporting is based on GRI on applicable parts. GRI indicator Content Page Section Economic performance EC2 Financial implications and other risks and 8, 9 Sustainable and responsible business opportunities due to climate change EC9 Indirect economic impacts 8, 9 Sustainable and responsible business Environmental performance EN1 Materials used 8, 9 Sustainable and responsible business EN2 Recycled materials 1 Environmental balance EN3 Direct energy consumption 1 Environmental balance EN4 Indirect energy consumption 1 Environmental balance EN5 Energy saved due to conservation and efficiency 8, 9 Sustainable and responsible business improvements EN6, EN7 Improvement of energy-efficiency 8, 9 Sustainable and responsible business EN8 Total water withdrawal 8, 9, 1 Sustainable and responsible business and environmental balance EN11, EN12 and EN14 Biodiversity 8, 9 Sustainable and responsible business EN16 and EN18 Greenhouse gases and their reduction 11 Environmental impact management EN2 Air emissions 1, 11 Environmental impact management, environmental balance EN21 Water discharge 1, 11 Environmental impact management, environmental balance EN22 Waste 1, 14 Environmental balance, material balance EN23 and EN28 Non-compliance with permits 11 Environmental impact management EN24 Hazardous waste 1, 14 Environmental balance, material balance EN26 Initiatives to mitigate environmental impacts 11 Environmental impact management EN3 Total environmental protection expenditures 11 Environmental impact management Social performance LA1 Total workforce 1, 8, 9 Key figures, sustainable and responsible business LA 3 Benefits provided to full-time employees Employees on short temporary contracts are not included in the bonus and incentive programmes. Both permanent, fixed-term and part-time employees are included in the bonus programme if the employment requirement of eight months is met and the employment is valid at the time of the bonus payment. LA4 Percentage of employees covered Almost all employees belong to labour unions and all are covered by collective bargaining agreements. The agreements of top management are negotiated individually. LA5 Notice periods regarding operational changes Regulated by law on cooperation in companies, covered also in collective bargaining agreements. LA7 Occupational health and safety 8, 9 Sustainable and responsible business LA14 Ratio of basic salary of men to women by Task related salaries are the same. employee category HR5 Right to excercise freedom of association and Principles of social responsibility ( collective bargaining HR6 Child labour Principles of social responsibility ( PR1 Health and safety impacts of products 12 Certificates COMPARISON WITH GRI RECOMMENDATIONS 15

18 Glossary AOX (Adsorbable organic halogens) indicates total concentration of chlorine bound to organic compounds in waste water. BAT (Best Available Techniques) mean the most effective technology, design, build, maintenance and operation and is used as a basis for granting environmental permits in EU countries. BOD5, BOD7 (biological oxygen demand) is a measure of the amount of oxygen needed by micro-organisms to break down solids and other readily degradable organic matter present in effluent in seven days. Carbon dioxide (CO 2 ) is gas produced in burning. Elevated levels of atmospheric carbon dioxide have been found to accelerate the greenhouse effect. COD Cr (chemical oxygen demand) is the amount of oxygen consumed in complete chemical oxidation of matter present in effluent. It indicates oxygen consumption by slowly degradable organic matter present in effluent. ECF (Elemental chlorine free) bleaching uses chlorine dioxide, thereby avoiding the use of elemental chlorine. FFCS (Finnish Forest Certification System) is the Finnish national certification system which is approved by PEFC. FSC (Forest Stewardship Council) is a certification scheme for sustainable forestry. NO X is collective symbol for nitrogen oxides; produced partly during combustion and partly by reaction between oxygen and nitrogen in the atmosphere. Nitrogen oxides are present in flue gases and vehicle exhaust gases. They form acids and nutrient compounds causing eutrophication. P stands for phosphorus, a nutrient causing eutrophication in receiving waters. In the forest industry phosphorus mainly originates in wood raw material. PEFC certification is a certification system initiated by European private forest owners and promotes sustainable forestry. Sulphur dioxide (SO 2 ) is a gas produced by burning sulphurcontaining fuels and as a by-product in chemical pulping. Reacts with oxygen and water vapour in the air to produce sulphuric and sulphurous acids, which dissolve in rain, causing acidification of soil and water. Suspended matter Wood material present in water as a result of debarking and pulp production as well as impurities solidified during waste water treatment. Can be removed from waste water through sedimentation of filtration. TRS (Total Reduced Sulphur). Refers to compound containing sulphur that escape into the air from sulphate pulp mills and are malodorous even in minute quantities. In modern pulp mills in normal operations they are burned. N stands for nitrogen which is the main constituent of air (about 8%). Nitrogen arriving in waters airborne, bound in wood raw material or in chemical compounds causes eutrophication. 16 GLOSSARY

19 Contact information Oy Metsä-Botnia Ab P.O. Box 3, FI-22 Metsä Revontulentie 6, FI-21 Espoo tel fax MILLS IN FINLAND Oy Metsä-Botnia Ab Joutseno Mill FI-5412 Pulp tel fax Oy Metsä-Botnia Ab Kemi Mill FI-942 Kemi tel fax Oy Metsä-Botnia Ab Rauma Mill P.O. Box 165 FI-2611 Rauma tel fax Oy Metsä-Botnia Ab Äänekoski Mill FI-441 Äänekoski tel fax SALES OFFICES Botnia Pulps GmbH Burgstrasse 2 4 D Wiesbaden Germany tel fax Botnia Pulps Shanghai Representative Office Unit 116, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong New Area Shanghai 212 China tel fax Botnia Pulps Italia S.r.l. Corso di Porta Nuova 15/A 2121 Milano Italy tel fax SAW MILL IN RUSSIA OOO Svir Timber saw mill , Leningradskaya oblast Podporozhskij raion Poselok gorodskogo tipa Vazhiny ulitsa Karyernaya, No. 48 Russia tel fax Publication information Papers: Cover: Galerie Art Silk 25 g/m 2 Annual review: Galerie Art Silk 15 g/m 2 Graphic design and layout: Zeeland Branding Oy Photos: Jari Riihimäki and Botnia image bank 3D visualisation: 3D Render Oy Printer: Lönnberg Print

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