UPM Label Papers Eero Kuokkanen, Mill manager UPM Label Day Tervasaari May 11, 2005

Transcription

1 UPM Label Papers Eero Kuokkanen, Mill manager UPM Label Day Tervasaari May 11, 2005

2 Label paper business environment UPM is providing both face base papers for self-adhesive laminate markets. Laminates are converted mainly to product labels information labels. UPM's label paper customers are laminate producers for both face base papers commercial siliconizers for base papers. Self-adhesive labelling has the highest share of marking technology business. Competing technologies are wet-glue, direct printing, in-mould technology shrink-sleeve. Major customer segment for UPM is labelstock producers, which will continue to gain even stronger share. UPM 2

3 Self-adhesive label market value chain Paper Paper Face Face Base Base Films Films On-line On-line Silicone Silicone Adhesive Adhesive Coating Coating Laminating Laminating Adhesive Adhesive Coating Coating Laminating Laminating Label Label Printing Printing Converting Converting End-users End-users Face Face Base Base Adhesives Adhesives Silicones Silicones Commercial Commercial Silicone Silicone Coating Coating Competing technologies Wet-glue Direct printing In-mould Shrink sleeve UPM 3

4 Glassine in self-adhesive markets Total usage in million tons Total usage estimate in million tons S-America S/E Asia Africa N-America Oceania Europe Sources: AWA, UPM UPM 4

5 Expected changes in customer segments > 2008e In Labelstock, global local midsize producers have % market share - globals: Avery, Raflatac - locals: Europe (Herma, Scstick, Panoval, Ritrama) USA ( MacTac, Greenbay, Acucote) Commercial siliconizers have % market share Global Labelstock producers are growing gaining marketshare from siliconizers In Europe, local midsize producers are maintaining their position UPM 5

6 Drivers for growth Strong end use growth investments in labelstock production in Asia Pacific New markets grow fast in Eastern Europe Supply chain efficiency pressures increases the need for information labelling ( VIP, RFID ) Importance of bring increases high quality product labelling Increased costs in oil decreases the competitiveness of synthetic materials Preferences for papers increase because of sustainability benefits UPM 6

7 UPM's competitive position UPM's benefits in production High integration level to rawmaterials Special SA - pulps Thinnings Sawdust Weighted average PM capacity, t/a - Weighted average capacity t/a Fedrigoni Weighted average technical age 14 years Ahlstrom UPM after STRONG Tervasaari PM8 rebuild UPM 40 Ermolli 1) Cham-Tenero 20 Trierenberg Source: Jaakko Pöyry WEAK ) Denayer included Technical age, years - 0 UPM 7

8 UPM's role in markets UPM strong in Europe both in base face Position is weak in North America Role is stronger in smaller C1S base market in North America Good opportunity to have a strong role in glassine in Japan Glassine position already strong in Asia Pacific UPM 8

9 Our aim is to treat all customers in a fair way Raflatac competitors dilemma How to hle? - market price - arm's length - aggressive growth - superior cost competitiveness - quality leadership - long term supply agreements - increase the entry barrier to label business - backselling to end users UPM 9

10 Tervasaari a speciality paper competence center Production capacity: - 400,000 tonnes of paper from four paper machines - 240,000 tonnes of pulp Annual turnover EUR 350 million (2004) Products: - label base paper - envelope paper, bag papers - sack paper, technical papers UPM 10

11 Tervasaari PM 8 UPM 11

12 Tervasaari PM 8 Built in 1996 Rebuilding in 2005 (the "Tarmo" project) Production capacity 175,000 tpy as of August 1, 2005 Speed 1,100 mpm as of August 1, 2005 Width 6.4 metres Main product: label base paper UPM 12

13 UPM Label Papers Production Units Arctic Circle. Jämsänkoski PM tons/ a Helsinki.. Valkeakoski Tervasaari PM PM5: tons/ a PM 8: tons/ a UPM 13

14 Forward-looking statement It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth developments; expectations for growth profitability; statements preceded by "believes", "expects", "anticipates", "foresees", or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates projections, they involve risks uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group's targeted customers, success of the existing future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group's patents other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product dem, intensity of competition, prevailing future global market prices for the Group's products the pricing pressures thereto, financial condition of the customers the competitors of the Group, the potential introduction of competing products technologies by competitors; (3) general economic conditions, such as rates of economic growth in the Group's principal geographic markets or fluctuations in exchange interest rates. UPM 14

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