Growth
Engine
Juan Bueno, EVP, Biomaterials
Biomaterials
Juan Bueno
March 22, 2012
2
Why?
Juan Bueno
March 22, 2012
3
Population Growth
Growing Environmental Pressures
Doing more with less
Juan Bueno
March 22, 2012
4
Sustainability
5
Pulp market outlook
Juan Bueno
March 22, 2012
6
Global Market Pulp demand by end use: 46mt
Source: Hawkins Wright, 2010 figures
Juan Bueno
March 22, 2012
7
What does that mean in terms of market pulp?
2
8
9
63
2
15
46
7
9
Paper USWE-JP
Paper
Growth
Countries
63
46
2010
Tissue
Juan Bueno
Packaging
March 22, 2012
Fluff
Integrated
Capacity
2025
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Ok. Tissue is growing. But where?
Forecast tissue demand (M Tons)
Juan Bueno
March 22, 2012
9
While online advertising in China is growing, there is still
room for growth in all types of media, including commercial
print
Advertising revenue is
~450€/capita in US
~75% of total population
A large growth potential remains for advertising spend,
including direct mail
Juan Bueno
March 22, 2012
10
Paper consumption clearly declining in Western
Europe and North America, but what about China?
China household
broadband penetration
Some growth expected,
but China will leapfrog
to Digital Life.
Juan Bueno
March 22, 2012
11
Strongest growth in demand of fibre-based
consumer board will be in Asia
CAGR
0.2 %
North
America
CAGR
1.4 %
CAGR
4.6 %
Western
Europe
Eastern
Europe
CAGR
3.3 %
CAGR
3.5 %
Middle East &
Africa
2010-2020
Million tonnes
South
America
CAGR
6.9 %
Fibre-based
consumer board
consumption
CAGR
China
9%
Pakistan
9%
India
6%
Middle East
4%
Juan Bueno
March 22, 2012
Asia
Source: China Ministry Of Industry
and Information Technology;
Chinese Telecom company
publications; PwC ; Bain analysis
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Go where the growth is
Juan Bueno
March 22, 2012
13
BA Biomaterials
Juan Bueno
March 22, 2012
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BA Biomaterials
Skutskär
BA Biomaterials
Capacities Ktons
Sunila
370
Enocel
480
Skutskär
Total Own Mills
540
1,390
Veracel
Montes del Plata *
Total with JV's
* start up in 2013
550
650
2,590
Enocell
Oulu
Kaukopää
Nymölla
Sunila
Stand alone mills
50%
Veracel
Integrated mills with dried pulp
50% Montes
del Plata 2013
Juan Bueno
March 22, 2012
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Total Chemical Pulp Balance at Stora Enso
4 385
220
100
120
3 430
Softwood
Hardwood
Fluff
1 655
Dissolving pulp
2 340
MdP = + 55%
Market Pulp
1 775
260
80
1 825
650
1 175
1 705
260
80
785
700
260
50 80
Dried and
wet pulp
production
External
Purchases
Internal
Consumption
Juan Bueno
Market
pulp
March 22, 2012
785
MdP
Market Pulp
incl MdP
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BA Biomaterials compared with competition
EBIT % (quarterly Ebit)
60%
50%
40%
30%
20%
10%
0%
-10%
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11
Stora Enso
Source: Quarterly financial reports
Juan Bueno
March 22, 2012
17
BA Biomaterials capacity cost competitiveness
BSKP All Dried
BHKP All Dried (incl. MdP)
EUR/tEUR/t Costs delivered to Frankfurt
EUR/t
BA Biomaterials capacity - % in each quartile
2nd
quartile
79%
Costs delivered to Frankfurt
BA Biomaterials capacity - % in each quartile
3rd
quartile
21%
1st
quartile
77%
4th
quartile
23%
BSKP: Stable position since cost curve not likely to change significantly.
BHKP: Cost curve will flatten and we are driving ourselves into a strong position.
For the 4th quartile mills, we are looking into other products (I.e Dissolving, Fluff etc.)
Source: Poyry and Stora Enso Experts
Juan Bueno
March 22, 2012
18
Montes del Plata Pulp Mill
1.3 M Tons of BHKP
1.4 B euro Investment
Juan Bueno
March 22, 2012
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Top 20 market pulp producers
Fibria
April
Arauco
Georgia Pacific
CMPC
Sodra
Stora Enso
Weyenhaeuser
Suzano
Botnia/M-Real
Paper Excellence
UPM-Kymmene
Domtar
Ilim
Mercer
IP
Ence
West Fraser
Canfor
Cenibra
Mdp
BSKP
UKP
MEC
BHKP
-
1 000
2 000
3 000
4 000
5 000
6 000
Source: Hawkins Wright
Juan Bueno
March 22, 2012
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How do we win
Juan Bueno
March 22, 2012
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Innovation
Customer
Focus
Financial
Discipline and
Growth
Innovation
Increase value added to current process
BIOREFINERY
Tall Oil
Bio-Methanol
Turpentine
Lignoboost
Innovation
Explore new markets
MFC
RESEARCH
&
DEVELOPMENT
Bio-Tech
Carbon Fibre
Customer Focus
Promoters
Neutrals
Detractors
Stora Enso
Other key supplier
Juan Bueno
March 22, 2012
25
Financial Discipline Our Cash Engines
Enocell
Sunila
Skutskär
Maximize results with cash engines (Nordic Pulp mills)
•
•
•
•
•
•
Operational efficiency.
Add value through by products (talloil, Lignoboost etc.)
Improve energy efficiency.
Lean and focused capital expenditure model.
Optimal working capital management.
Adjust product mix as there is fit (Dissolving Pulp, Fluff).
Juan Bueno
March 22, 2012
26
Financial Discipline Our Growth Engines
Montes del Plata
Existing Plantations
Projects
Value Adding
Partnerships
Sustainable growth
•
•
•
•
•
•
Environmental & Social responsibility
Certified plantations
Time to market
Low production cost : only 1st quartile interests us
Close to growing markets is key
Value added partnerships
Juan Bueno
March 22, 2012
27
Biomaterials offers an attractive growth platform
•
Short term with a state of the art pulp mill in Uruguay
•
Medium term with pulp from Tiger
•
Long term via strong focus on innovation, new technologies
development and strategic partnerships. Option to do Veracel II
•
Strong customer focus
•
Strong financial discipline balancing cash engines that can
help fund profitable growth opportunities
•
Clear respect for the highest sustainability standards
Juan Bueno
March 22, 2012
28
Biomaterials
Juan Bueno
March 22, 2012
29
Juan Bueno
March 22, 2012
30
It should be noted that certain statements herein which are not historical facts. including. without limitation
those regarding expectations for market growth and developments; expectations for growth and profitability;
and statements preceded by “believes”. “expects”. “anticipates”. “foresees”. or similar expressions. are forwardlooking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995.
Since these statements are based on current plans. estimates and projections. they involve risks and
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 and 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 and future collaboration arrangements. changes in business strategy or development plans or targets.
changes in the degree of protection created by the Group’s patents and other intellectual property rights. the
availability of capital on acceptable terms; (2) industry conditions. such as strength of product demand. intensity
of competition. prevailing and future global market prices for the Group’s products and the pricing pressures
thereto. price fluctuations in raw materials. financial condition of the customers and the competitors of the
Group. the potential introduction of competing products and technologies by competitors; and (3) general
economic conditions. such as rates of economic growth in the Group’s principal geographic markets or
fluctuations in exchange and interest rates.
Juan Bueno
March 22, 2012
31