Finnish Forest Industry – forerunner in the bioeconomy

Estonian Forest and Wood Industry Association 8.6.2011

Antro Säilä, Director business environment and innovation

Wood products industry is an important part of Finnish forest industry cluster but paper still dominates

sawmilling45 %

Furniture16 %

Others3 %

2

45 %

Panels11 %

Prefab house mfr. and Joinery26 %

20 Billion €

Antro Säilä

8.6.2011

In 2010, paper and paperboard 11.8 mill. tonnes (+11% 1) and sawn softwood 9.4 mill. cum (+17% 1)

Forest industry production volumes in Finland since 1960’s

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12

14

16mill. tonnes/cum

Paper and paperboard Pulp Sawn softwood Wood-based panels

3

2

4

6

8

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1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Antro Säilä

8.6.2011

Value (€) of forest industry exports per capita and its share of total exports

Understanding the magnitude of the forest industry in Finland compared to some other countries

Forest industry exports / total

0 500 1 000 1 500 2 000

Finland

Sweden

Canada

EUR

7.4.2011

Forest industry exports / totalexports

Finland 20%

Sweden 12%

Austria 7%

Canada 6%

Germany 3%

France 2%

USA 2%

Norway 1%

Canada

Austria

Norway

Germany

France

USA

SOURCE: Finnish Forest Industries Federation; Statistics Finland

Global market trends

North America RussiaMature / declining marketRestructuring

Western / Nordic EuropeMature marketRestructuring underwayTechnology leadership Huge coniferous fiber sources

Sizable market potentialPoor infrastructureInvestments needed

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Latin America India

China

Investments needed

Huge growthNo fiber sourcesAggressive investments

Fiber sourcingPulp supplies and investments

Big potentialLimited own capacityNo fiber

Antro Säilä

8.6.2011

Forest industry is facing a paradign shift; old is fading away and being replaced by new!

• Paradigm shift is is global: new technologies, rawmaterials and markets challenge traditional forestindustry that has relied on its historical successfactors

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factors

• Finnish forest industry has still considerablecompetitive advantages: well managed forests, high quality wood fibre, knowledge and comptence in addition to very strong forestcluster

• Prerequisites for creating a new success storyare there

Antro Säilä

8.6.2011

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SOURCE: EFI Research Report 14

Antro Säilä

8.6.2011

Life cycles of some Finnish forest industry products

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Antro Säilä

8.6.2011

Finnish forest industry

Forest industry in Finland

• 40 paper and board mills

MetsäliittoStora Enso

Enso-Gutzeit

Veitsiluoto

Oulu

TampellaForest ja Tambox

Varkaus(Ahlström)

Corenso UnitedPori, Varkaus

SerlachiusMetsäliitonTeollisuus

Finnforest

M-realMetsä-

- 4th in Europe

- 8th in the world

- Biggest in Europe

- 4th in the world

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• 40 paper and board mills• 38 pulp mills• 170 sawmills• 20 plywood, particle

board/fibreboard mills

- 3rd in Europe

- 6th in the world

UPM-Kymmene

Sunila

MyllykoskiPaper

Metsä-Timber

Kemi

Joutseno-Pulp

Metsä-Botnia

Metsä-Rauma

Kyro

M-real

YhtyneetPaperitehtaat

KajaaniKaukas

Schauman

Kymmene

RepolaRauma-Repola

Rosenlew

AhlstromKauttua

Jujo Thermal

Stromsdal

Metsä-Tissue Tervakoski

SCA-Packaging Finland

Peterson Packaging

Sonoco Alcore

Loparex

Pankaboard

Savon Sellu

Georgia-Pacific Nordic(Nokia)

Antro Säilä

8.6.2011

Vision and target for 2030

VisionFinland has a successful, constantly developing forest cluster, whose products and services are among the most sought after in the world. This

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among the most sought after in the world. This will pave the way for a sustainable biosociety.

Target for 2030

The target is to double the value of forest cluster products and services from 2006 levels by 2030. At least half of the value will come from products and services that were not yet in production in 2006.

Antro Säilä

8.6.2011

The innovation environment of the forest cluster has changed a lot in recent years

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Antro Säilä

8.6.2011

The focal points of the research strategy

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Antro Säilä

8.6.2011

Forest Cluster Ltd’s research programs

Intelligent and resource

Customerapplications

FoCuS StructuralinnovationProduct

Improvement innovation

Marketinginnovation

Business Modelinnovation

Processinnovation

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resourceefficient

productiontechnologies

EffTech

Biorefinery,FuBio

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innovationProductinnovation

Innovation as process: invention(patent) -> Development of product or service-> Product or service on the market

Disruptiveinnovation

SOURCE: Moore 2004

Antro Säilä

8.6.2011

Developing new is slow

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SOURCE: UPM-Kymmene

Antro Säilä

8.6.2011

Biorefinery options for forest industry

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8.6.2011

�Already now major industry� e-living doesn’t exist!� Wood is only renewable large

scale building material, wood acts

Wood products industry and wood-based buildingand construction

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scale building material, wood actsas carbon storage and at the endof service life it can betransformed into energy

� Renewable energy = business potential for wood productsindustry

Antro Säilä

8.6.2011

Wood-based building and construction have huge potential

• Population growth, immigration and rise of standard of living – all increase need for housing

• Building construction consumes 50 % of all raw

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• Building construction consumes 50 % of all raw materials and generates 50 % of waste*

• Use of buildings causes 40 % of energy consumption and 30 % of CO2 emissions*

• Improving energy-efficiency increases share of building construction and raw materials

• Wood is the only renewable raw material for construction

8.6.2011

Antro Säilä

LÄHDE: * EU Relief 2003

Target is to have an internationally successful wood construction industry

Sub-targets1. Public wood-building program

– Regionally great interest2. Most advanced building code in Finland

Internationally successfulwood construction industry

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2. Most advanced building code in Finland– Fire– Energy-efficiency– Public building projects to set example

3. World class competence– Professorships for wood-based building

construction and fire-issues– Wood’s share equal to other materials in

structural engineers’ education4. Woos-based service and solution offering to

match competitors

Internationally interesting building projects based on wood

(Future-oriented, ambitious pilot program for new buildings and renovation)

Finland to haveEurope’s most

advanced buildingcode

World classcompetence(Professorships,

open standard for wood based building

construction)

Industry offering(own and joint

R&D)

Antro Säilä

8.6.2011

• Fixed dimensioning tables for wood-based buildings ≤ 8 floors with sprinklers

• ≤ 4 floors with wood frame possible without sprinklers through individual evaluation

New building code in Finland – meaning for wood

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evaluation

• Increased use of wooden indoor and outdoor cladding enabled

• Extension floor with wood frame on top of concrete building made possible without sprinklers

• Large-span structures with equal performance requirements for all materials

• Gives a real boost to wood-based building construction industry in Finland!8.6.2011

Antro Säilä

• Coordinated action of ministries (Finance, Agriculture+Forestry, Environment, Foreign Affairs)

• International study on comparing life-cycle effects of building materials is needed

Preferring wood as construction material on environmental basis – Finnish Ministry of Foreign Affairs working group recommendations

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needed

– OECD?

• Starting international lobbying

– Main object EU

– Partnering countries needed

– Uniform message from authorities and organisations, coordinated by authorities

8.6.2011

Antro Säilä

Roles in promoting wood-based building and construction

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Puuinfo

”User Interface”

Using of wood must be at least as easy as any other materials.

Wood is preferred due to easiness of use

FFIF

”Lobbyist”

No reglatory hinders to wood-basedbuilding construction.

Policies, public procurement and regulation

Finnish Wood Research

”Supplier of knowledge”

Wood is most competitive option to builder.

There is strong technical support to usage

Str

ateg

ic o

bjec

tive

8.6.2011

Wood is preferred due to easiness of useand competitive advantages it offers.

Building sector knowledge of wood is strengthened.

Wood takes bigger share in builders’ education.

Reference buildings.

Designers.

Builders and contractors.

Local authorities.

(consumers)

Policies, public procurement and regulationsupport wood on environmetal basis.

Standards, norms and codes related to building construction.

Public procurement policies.

Policy programs as part of governmentalguidance.

Politicians in Finland and in EU.

European federarions.

Building sector organisations.

There is strong technical support to usageof wood.

Joint research to support development of wooden building parts.

Up-to-date knowledge of wood’s potential.

Scientific bais for dimensioning.

Value chain of wood-based buildingconstruction, authorities and end-users.

Woodproducts industry, wood buildingindustry.

Research communities.

Str

ateg

ic o

bjec

tive

Mai

n ac

tions

Tar

get

grou

ps

Antro Säilä

Shifting production and consumption from non-renewables to renewables fosters sustainable development

• Wood helps to mitigate climate change

• Reusable products

Wood products value chain

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• Side products and waste can be used in the production of bio-energy and bio-fuels

• Controllable processes

• High environmental standards

• Meets customers’ needs

Antro Säilä

8.6.2011

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Antro Säilä

8.6.2011