UPM's CEO Jussi Pesonen: Dynamic wood markets and energy policy essential for future's bioforest industry in Finland

(UPM, Helsinki, 7 October 2009 at 14.00) – UPM's CEO Jussi Pesonen highlighted the Finnish forest industry's competitiveness and future possibilities at Finnish Chamber of Commerce Forum 2009 event held today in Helsinki, Finland.

"Profitability of the forest industry is important for Finland now and in the future. The geography of the industry is changing and the adjustment to the current competition environment is a fact for us."

Pesonen highlighted two factors affecting the competitiveness of operational environment, crucial to the industry's success in Finland: dynamic wood markets and energy policy.

"The Finnish wood prices are the highest in Europe. I'm totally convinced that the dynamics of the Finnish wood markets can be improved essentially to serve both forest owners' and forest industries' interests. However, we need new measures and mechanisms from the authorities to promote the systematic use of forest resources and coordinate the work flow between forest centres and forest associations".

"Finland's energy policy is essential for the competitiveness of the country. I cannot emphasise enough that the distribution reliability, sufficiency, and competitive price of electricity are vital for business and plans on expansion investments in Finland".

"At the moment, the Finnish industry is paying the highest electricity taxes in Europe. The energy tax cutter proposed by the government will not bring any remedy until the year 2011. We do not ask subsidies from the society, but there is a need to quickly adjust the different taxes and other costs to the same level as in the competing countries".

"What comes to energy supply, Finland is in its own league: the Finnish industry is and will be capable to build up its own electricity production capacity to secure the availability of electricity at a competitive price".

Pesonen also commented the electricity feed tariffs and other subsidies distorting the competition.

"The versatile processing of biomass is very important for the future of the forest industry. The biomass value chain is offering many growth opportunities that can be destroyed with feed tariffs".
Pesonen emphasised the forest industry's role in the world concerned about climate change. "Our industry's carbon footprint is small compared with that of many competing industries. We use renewable raw material and our products are recyclable. UPM is also a very significant producer of renewable energy. This foundation offers good strategic growth opportunities."

"We see that the new bioforest industry is more focused and more profitable than our industry today. In the new forest industry the wood biomass is processed and refined on a significantly broader scale and the use of biomass is more versatile and more efficient than today. New, more demanding and further processed products will be developed to support the old ones: smart packaging, different composites, biofuels and biochemicals", Pesonen says.

 

UPM, Communications
Media Desk, tel. +358 40 588 3284
communications@upm-kymmene.com

UPM's vision is to be the front-runner of the new forest industry. Our competitiveness is based on cost leadership, change readiness and leading innovation. Our products are made of renewable raw materials and are recyclable. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The Group employs around 24,000 people and it has production facilities in 14 countries. In 2008, UPM's sales amounted to EUR 9.5 billion. UPM's shares are listed on the Helsinki stock exchange. www.upm-kymmene.com