Strategy in action

Our Biofore strategy includes continuous improvement programmes and short-term

actions to drive performance; mid-term growth projects as well as mid- to long-term

development work to create new, high value-added growth. UPM develops its business portfolio in order to increase the long-term shareholder value.

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1. Continuous improvement in performance

UPM is committed to continuous improvement in its financial, social and environmental performance. Each business area targets top relative performance in their respective markets.

  • UPM has group-wide continuous improvement programmes for reducing variable costs, optimising maintenance and site operations as well as releasing working capital
  • Similarly, UPM has continuous improvement programmes for the health and safety of employees and contractors and environmental performance
  • The programmes continued to yield strong results in 2016: variable and fixed costs decreased significantly. Lost-time accident frequency continued to decrease, and resource efficiency continued to improve. The work will continue in 2017 and beyond
  • UPM aims for efficient use of its assets. In UPM Paper ENA, this also means adjusting production capacity according to customer demand
  • UPM sees good governance, industry-leading environmental performance, responsible sourcing and a safe working environment as important sources of competitive advantage

2. Sustainable returns with focused growth projects

UPM aims to capture growth opportunities in its business portfolio. The company invests in projects with attractive and sustainable returns, supported by clear competitive advantage.

Projects already contributing: EUR 680 million investments, with an EBITDA target of EUR 200 million. In 2016, UPM achieved 80% runrate of the target.

  • UPM Pietarsaari, UPM Fray Bentos and UPM Kymi pulp mill expansions
  • UPM Lappeenranta renewable diesel biorefinery
  • UPM Raflatac label stock factory expansions in Asia Pacific region and Poland
  • UPM Changshu specialty paper machine

Projects under construction or at the beginning of ramp up: EUR 225 million investments.

  • UPM Otepää plywood mill expansion
  • UPM Kaukas and UPM Kymi (second investment) pulp mill expansions
  • UPM Raflatac label stock factory expansion in Poland (second investment)

In Uruguay, UPM started discussions with the Government of Uruguay regarding the development of logistics infrastructure in the country. Railroad and road connections are a critical challenge for establishing a large scale industrial operation in the inland and connecting it to a deep sea port.

3. Business portfolio development and value creation 

UPM aims to increase long-term shareholder value by increasing the value of each business and by developing the business portfolio, organically or potentially through mergers and acquisitions. UPM’s responsible operations and value chain lay the foundation for identifying opportunities and avoiding and mitigating potential risks.

Developing each business

  • Driving profitability, growth and cash flow
  • Commercial strategies, focused growth investments, continuous improvement programmes

Developing the business portfolio

  • Increasing the share of businesses with strong long-term fundamentals for profitability and growth
  • Businesses with a sustainable competitive advantage
  • Growth investments, synergistic M&A

Portfolio changes are possible if it would be the best way to increase long-term shareholder value

Ability to take action: strong balance sheet mitigates risks and presents strategic opportunities

4. New sources for sustainable growth and competitiveness

UPM is developing new businesses based on its extensive know-how and strong position in the forest biomass sourcing and processing value chain. Ecodesign represents business opportunities with large target markets and high added value.


  • Advanced renewable diesel suitable for all diesel engines and renewable naphtha that can be used as a gasoline component


  • Renewable materials to replace oil-based materials e.g. in injection moulding


  • Sustainable and competitive wood-based biochemicals with the focus on chemical building blocks, lignin products, biofibrils and biomedical products

Product, service and business model development in the current businesses is also an important source of competitive advantage and growth. All UPM businesses aim to increase the value added for customers through product and service development.


Advanced renewable diesel suitable for all diesel engines


Renewable materials to replace oil-based materials e.g. in injection moulding


Renewable performance chemicals and drop-in alternatives for oil-based chemicals

Responsible business

Responsibility is a source of competitive advantage and growth

Business areas

Driving for top performance in all business areas

UPM as an investment

Targeting attractive total return
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