Metso in China · Metso in China Morgan Stanley China ... for paper machine ... •Metso (China) Investment Co., Ltd established (Shanghai)

Metso in China

Morgan Stanley China

Industrial Summit Beijing, May 31, 2013

Nalle Stenman, SVP, Finance and Admin,

Pulp, Paper and Power

© Metso

1. This is Metso

2. Metso and its

businesses in China

3. Market and segment update

4. Business environment

in China

5. Summary

6. Appendix

Content

2

© Metso

Net sales in 2012

EUR 7.5 billion

Sustainable technologies and services for

process industries

• Customer industries include mining,

construction, pulp and paper, power,

oil and gas

• Global player with leading market

positions in its businesses

• Strong focus on services, thanks to

large installed base

• Strong presence in the fast-growing

emerging markets

• Strong focus on environmental

solutions and sustainable

technologies

• Emphasis on implementing strategic

approach to sustainability

• Shares are listed on NASDAQ OMX

Helsinki Ltd.

3

Services

44% of net sales

© Metso

Metso businesses Strong positions already, aspiring more growth

• Strong market position and

global market leadership in a

number of areas

• Long and deep exposure to the

fast-growing industry

• Selective M&A growth

• Strong in emerging markets

• Large share of services

• Predominantly supplying big

mining players

• Improving supply chain

management

• Niche player with strong

positions

• Very strong megatrends driving

long-term growth

• Room for M&A growth

• Europe and North America

focused; building capabilities in

Europe and selectively

exploiting opportunities in

North America and in the

emerging markets

• Very strong global market

position

• Potential for good near-to-

medium-term growth

• Growth in China and Latin

America

• Predominantly organic growth

• Growing services business

• Further margin improvement

• Ongoing transfer of resources

to China and Brazil

4

Mining and

Construction Pulp, Paper and Power Automation

© Metso

Group key figures

5

* before non-recurring items

** Includes non-recurring items of EUR -36 million in FY 2012

EUR million 2012 2011

Change

%

Orders received 6,865 7,961 -14

Services orders received 3,264 3,100 5

Net sales 7,504 6,646 13

Services net sales 3,174 2,871 11

% of net sales 44 45

EBITA * 688 629 9

% of net sales 9.2 9.5

EBIT ** 602 572 5

Earnings per share, EUR 2.46 2.38 3

Personnel 30,212 30 ,324 0

Net sales and EBITA % *

© Metso

Extensive sales, services and manufacturing

network built over 20 years

6

Metso and its business

in China

© Metso

Our major milestones in China in 1933 – 2013

8

1950s Start of continuous business

• First complete fiberboard plant delivered

• First crushing equipment delivered

1970s New deliveries and rebuilds

• Thermo-mechanical pulp plant delivered

• Rebuilds of sack paper and newsprint machines

1980s First joint venture

• Valmet-Xi’an joint venture for paper machine manufacturing established

• Upgrades and rebuilds of pulp and paper machinery

• Complete coal handling system delivered

• Large grinding mills delivered

1990s First fully owned plant

• Crusher manufacturing plant established (Tianjin)

• Fiber technology representative office opened (Beijing)

• World’s first OptiConcept newsprint line (Nanping) starts production

2010 Valve and automation technology center

Metso Technology Center for flow control and process automation systems opened (Shanghai)

2000s Service centers and additional manufacturing plants

• Pulp and paper service centers opened (Wuxi, Guangzhou and Zibo)

• Manufacturing and workshop for stock preparation and recycled fiber production opened (Shanghai)

• Paper and board machine workshop opened (Jiading)

• Metso (China) Investment Co., Ltd established (Shanghai)

• Crusher manufacturing plant expanded (Tianjin)

2012–13 Strategic development in construction

• 50% – 50% joint venture with LiuGong Group Corp. Ltd. to develop track-mounted crushing and screening business

• Warehouse for crusher spare parts opened (Kunming)

• Metso’s acquisition of JX manganese steel foundry and 75% ownership of Shaorui Heavy Industries Ltd. to strengthen service presence and capabilities in mining and construction

1933 1950 1960 1970 1980 1990 2000 2010 2013

1930s First deliveries

Paper machine to Guangzhou Paper and a ball mill to Shanghai Mint

© Metso

Metso serves several key process industries

throughout China

9

First

production

unit / joint

venture in

China in 1989

2012 net

sales in

China EUR

664 million

Extensive sales, service

and manufacturing

network serving mining,

construction, recycling, oil

and gas as well as pulp,

paper and power

industries

First delivery

to China in

1933

More than

3,100

employees

Major strategic

development in

construction with

joint ventures and

acquisitions in

2012-2013

• Metso locations in China

Around 1,500

key customers

in China

© Metso

Contributing to the well-being of communities

and the environment

10

Metso is involved in many programs that are

helping to build the well-being of

communities and the environment.

• Working with the Chinese Red Cross, Metso

supported the rebuilding of two schools in

Sichuan Province after the 2008 earthquake

• Working with Plan International, Metso

participated in water and sewer infrastructure

improvement projects in 2008 and 2010 in

Shaanxi Province

• Metso has provided scholarships to top

industry universities since 2009

• In 2012, Metso joined WWF China’s Initiative

Business Alliance for Sustainability (a network

of companies that supports environmental

work in China)

© Metso

Operations in China

• China is one of Metso’s fastest growing markets. Currently, Metso has

more than 3,100 employees in China and a local network of

manufacturing, sales and services

• Operates in six (6) fully owned factories, three (3) service centers, three

(3) joint ventures with local partners

• Our mining and construction segment is currently finalizing three (3)

M&A cases in China (mobile equipment, midmarket segment as well as

a steel foundry)

• Supports the Chinese pulp and paper industry, aggregates production

and mining sector, energy, oil and gas industries, and power producers

• First deliveries to China were in 1933 through Metso’s predecessor, and

the first joint venture was established in 1989

• In 2012, net sales in China were EUR 665 million, and orders received

EUR 618 million. China was in the TOP 3 countries globally

11 11

© Metso

• Customers: Pulp and paper,

power generation

• Locations: Beijing, Wuxi,

Guangzhou, Shanghai,

Xi’an Zibo, Tianjin

• About 2,200 employees

Metso in China

Metso businesses

12

• Customers: Energy, oil &

gas, chemical &

petrochemical, power

generation, pulp and paper

industry

• Locations: Shanghai,

Beijing, Guangzhou,

Chengdu, Nanjing

• Around 470 employees and

680 employees in joint

ventures

• Customers: Quarries,

aggregates production,

mining industry, construction

• Locations: Tianjin, Beijing,

Shanghai

• Close to 400 employees

Mining and Construction Automation Pulp, Paper and Power

© Metso

Mining and Construction in China

Main customer segments

• Mining operations, pyro

processing plants, ports

& terminals

• Aggregates producers, dam &

road construction, steel industry

• Mining customers cover over

half of our sales

- Large coal terminals, in particular,

have invested in bulk materials

handling systems in recent years

13

© Metso

Automation in China


• More than 500 customers

in China

• Key customers are energy, oil

and gas companies, and pulp

and paper companies

• Strongest sales growth is

expected from the energy, oil

and gas industries

• China’s rapid economic growth

requires energy, which is

produced at local coal power

stations

14

© Metso

Pulp, Paper and Power in China


• Customers include major local

and global producers of pulp,

paper, board, tissue and power

generation

• A solid track record and a

trusted brand name give an

edge in a market where

customers expect suppliers to

operate clearly faster than in

Europe

15

Market and business update

© Metso 17

Mining Business

Sector drivers

• Iron & Steel

• Nonferrous Metals

• Gold

• Coal

• Ports

© Metso 18

160

200

72

210

16

40

0

50

100

150

200

250

Year 2006 Year 2011

Mill

ion

Eu

ros

Low End Middle End Top End

Changes in aggregate market

Mid-end market grew by almost three

times 2006-2011

Data Source: China National Bureau of Statistics

• China’s aggregate production

increased from ~ 2 billion tons in

1995 to 8 billion tons in 2010 and is

forecasted to reach 11.5 billion tons

by 2015.

• Increase in aggregate demand,

international players still no threat

due to price positioning,

technological shift China’s total

incremental aggregate production

has been driven by local mid-end

manufacturers.

• The dominant low-end segment

could not grow much due to

enterprise limitation and

technological shift in aggregate

production.

© Metso

Continuous growth of road construction in China Annual data on total road miles in China

19

• Second largest state highway network in the world, increasing

from 74,100 km to 10,800 km by the end of 2015

• Total road miles will reach 4,500,000 km in 2015

3,457 3,584 3,730 3,861 4,008

4,500

-

1 000

2 000

3 000

4 000

5 000

2006 2007 2008 2009 2010 E2015

'000 k

m


© Metso

Growth driver: large investment in railway projects

20

Sustained investment in rail infrastructure

• China’s rail transport network is second largest in the world by 2010; over

91,000 km of railroad lines in service

• 120,000 km of railroad lines in service by the end of 2015

• 41.4% increase in infrastructure investments within the next five years

Plans to invest

EUR 280 billion in

infrastructure in the

next 5 years!

77 78 80 86 91

120

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 E2015

‘000 k

m


© Metso

Mining and Construction

Growth drivers in China

• Vast resources to invest in development

• Ever-strict laws and regulations on environmental protection

• Improving IPR protection

Economic power and global integration

•Large geography and population making development a long-term aspect

• Increased domestic needs for infrastructure, transportation and energy

Large population and geography

• Optimization of energy distribution (driver for nuclear and renewable power). Nation’s energy security

• General trends of consolidation, as in the case of Quarries

Policy changes towards sustainable development

• Rich mineral base and continued domestic development in mining and processing Abundant mineral resources

• Technology shift

• Investment by international players further speeding the process of technology upgradation

Technology shift

• West & North Development Program. 79.3% of national water resources are in 12 western provinces and autonomous regions

• West-east power transmission

A vast amount of infrastructure yet to be built

21

© Metso

• Investment will be on going for the EHC and

PP industry

• Very high customer loyalty; many customers

have been buying from us since day one

• Metso’s reputation ranks at the top of all our

competitors

• China-made product is very well received

locally

• Increase services presence

Pulp & Paper • To provide full package automation solution to P&P

customers

• Focus on replacement market and system integration

Power generation • To strengthen power automation in China by

partnership with local company (joint venture)

• Continuous development of environmental solutions, e.g. renewable energy

Other industries • Various penetration for selected segments, e.g.

marine, mineral, O&G, air separation

Services growth • Full-scope life-cycle services

• Process analyses and optimizations

• To build up local services capabilities into service hub

• To develop services together with other Metso units

Localization • To strengthen localization for DCS, QCS, consistency

products to improve cost competitiveness

Automation Business update Business growth initiative

22

© Metso

China’s Paper Industry Development trend

• Long-term trend:

- Production and consumption will grow, but growth rate will be slower

- Competition will be tougher, the economic yield will slow down

- Industry integration and elimination of outdated capacity will speed up

- Paper and board product exports to be suffocated, but fiber – including

virgin fiber and recycled fiber – imports will increase continually

- Policy and management of energy conservation and pollution control will

be strengthened

• 2013 market perspective:

- More restructuring and rebalance, the market confidence and market

prediction is uncertain

- The original competitive advantage edge and growth driver is

weakening, new competitive advantage is under seeking, as a result, the

investment is inactive. Abroad investment is one direction, tissue and

special paper are the hottest grades of new investment

- Packaging grade (mid-size machine ) is still the popular grade for

investment

23

© Metso

12th Five-year plan use of biomass energy by 2015

• The 12th Five-Year Plan issued December 28 by the National Energy Board proposed

annual use of biomass energy by 2015 to be the equivalent of more than 50 million

tons of standard coal, with a 140 billion Yuan budget for new investments. Supported

by the vigorous development of new energy in China, analysts believe that biomass

holds clear market potential.

• The 11th Five-Year Plan’s development goals for biomass power generation total

installed capacity were 5.5 million kilowatts (realized 5.5 million), biogas use of 19

(13) billion m3 p/a, biomass solid pellet use of 1 (0.5) million tons p/a, bio-liquid fuel

use of 200,000 (0.5) tons p/a.

• The 12th Five-Year Plan for biomass is highly ambitious: biomass power installed

capacity of 13 million kilowatts, biogas use of 22 billion m3 p/a, biomass pellet use of

10 million tons, 5 million tons of bio-liquid fuel . The plan also promises to continue to

give a preferential tariff for biomass power generation project support. The central

government to subsidize new biomass energy technology, R&D and industrialization

demonstration projects involving rural life with biomass project construction.

24

© Metso

Strategic opportunities for


25

Key opportunities for China (for the whole offering)

1. Rebuild business 2. Service growth 3. POW in China

• Demand for various

grades is changing,

creating some rebuild

opportunities (newsprint

to fine paper etc.)

• Installed base is aging

and machines need

rebuilds for performance

improvement

• Large Metso installed

base providing good

opportunity for service

growth

• Service market is

increasing due to still

increasing production

capacity, aging installed

base and customer focus

on their core operations

• Higher demand for

solutions providing

improved OPEX and

sustainability

•China committed to

reduce carbon footprint in

energy production

•Plan to install additional 5

GW biopower by 2015

and further >20 GW by

2020

•Environmental

requirements (emissions

to air, water and landfill)

tightening also for pulp

mills

Business environment in China

© Metso


Economic facts

• China’s growth seems to be leveling off at

about 8% Y-o-Y in early 2013

• The easing bias of monetary policy will be gradually

removed, but the policy stance will not be tight and

should be supportive of the government’s 7.5% growth

target. Based on the assessment of the 2013 budget,

fiscal policy will be less expansionary than in 2012

• GDP breakdown (2012 estimate):

- Agriculture 9.7%

- Industry 46.6%

- Services 43.7%

• In terms of purchasing power parity, China, with a

population of over 1.3 billion, is the world’s second-

biggest economy after the United States.

27

Data sources: World Bank, CIA World Factbook, Citi,

Global Economic Outlook

© Metso

-2

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014 2015 2016

World

China


Economic overview

28

Real GDP Growth, % Reforms are being carried out to encourage

private investment, free up the financial

system and promote the global currency

status of the renminbi. The government is

committed to reducing the dependence of

China’s economy on investment spending

and exports, and increasing domestic

consumption

Production of the world's total (2011) cement 58%

coal 45%

iron ore 45%

aluminum 41%

paper & board 25%

bauxite and alumina 17%

silver 16%

gold 14%

virgin woodpulp 5%

%

Data sources: Oxford Economics, USGS, BP, World Coal Association,

Pöyry, IMF, Bloomberg

© Metso


Growth potential

• The Chinese economy has decelerated since 2010; currently there are signs of growth bottoming

out and a gradual pick-up in momentum. The government has set the GDP growth target at 7.5%

for 2013, and targets a 16% reduction in energy intensity (energy demand per dollar of GDP) by

2015.

• China’s construction market is the largest in the world (total construction spending in 2012 was

USD 1,162 bn, world total was USD 6,161 bn). Construction will continue developing with an

emphasis on interior and western provinces leading to an expected 8.3% CAGR through 2017.

• Overall, China's mining industry value is forecasted to increase from approximately USD 321 bn in

2011 to USD 448 bn by 2017, an annual growth rate of 5.7%. The government, as part of its 5-year

plan, aims at improving efficiency of the mining operations through closures of small mines and

consolidations.

• China continues to gain higher shares of the global paper and board production. In 2011, It

accounted for 25% of global production (98 million tons), and the figure is projected to reach 158

million tons by 2025. Due to tightening environmental regulations, new non-wood pulp lines are

being installed to replace obsolete capacity, putting pressure on investments for new capacity in

the medium term.

29

Data sources: World Bank, CIA World Factbook, IHS Global Construction

Outlook. Xinhua News

© Metso

Summary

Metso in China

• Committed to serving Chinese

customers

• Market leader

• Leading technology and

know-how

• Excellent references

• Established position in China for

more than five decades

• Increasing focus on Asian

markets

30

© Metso

Demerger study proceeding according to plan

31

• On March 25, the Board decided to start a process to study the potential

demerger of Metso

• The plan is to form a new company out of the Pulp, Paper and Power

businesses and to list it on the NASDAQ OMX Helsinki stock exchange

• The Mining and Construction and the Automation businesses would remain

in the current company

• If the go-ahead is given, the process would be completed by the end of

2013

• Next planned milestones:

- Signing and registration of a demerger plan

- EGM in the second half of 2013

© Metso

Aiming to improve strategic focus and

accelerate growth

• The separation would be expected to unleash the full potential and

accelerate growth of the separate businesses

- clearer strategic focus, and improved management focus and ambitions

- leaner, more flexible and agile operations

- enhanced strategic flexibility

- full and independent utilization of the strong market potential

- significantly improved potential for M&A

- higher flexibility to manage capital structure in line with demands of business

models

• The separation would reveal sharpened and more transparent companies

for existing and new investors

- Mining and Construction, and Automation: very strong growth, high share of

services, aggressive growth strategy

- Pulp, Paper and Power: stable growth, high share of services, asset-light, strong

cash flow

• Both companies would continue to be trusted partners for customers,

suppliers and employees

32

© Metso

Pulp, Paper and Power

businesses

• Stable underlying market growth driven

by increasing board and tissue

consumption in emerging markets,

service expansion and biorefining

opportunities

• Global market leader – #1-3 player in all

markets served

• Competitive advantage in emerging

markets, services offering and

technologies

• Share of services close to 40% and large

backlog provide good revenue visibility

and resilience

• Stable growth, increasing profitability and

asset-light operating model will support

good returns on capital employed

Key attributes of the planned new entities

33

Mining and Construction, and

Automation businesses

• Strong underlying market growth in all

markets served: mining, construction and

related automation

• Strong global market position - #1-3 player

in core market segment

• Competitive advantage in global

operations, service offering and

technologies

• Share of services close to 50% and

significant backlog provide good revenue

visibility and resilience

• Significant potential for growth within the

value chain and service markets, both

through organic expansion and M&A

Thank You

Appendix Our facilities and references

Our major facilities in China

© Metso


Metso Minerals (Tianjin) Co., Ltd.

37

• Operation started in 1999

• Crusher factory expansion in 2009

• Assembly of jaw and cone crushers, screens and

feeders

• Warehouse for spare and wear parts

• Regional Distribution Center (RDC)

Approx. 100 employees

Land area 11,000 m2

Factory 7,500 m2

Office 900 m2

ISO 9001:2000 quality

certificate

© Metso


Wuhan Repair Factory

• 3 outsourcing repair facilities

in Wuhan, Xi’an, Tianjin

• Repair, renewal and maintenance

of GP, HP, C jaw crushers

• Lease and sale of used crushers

38

© Metso

Automation in China

Metso Technology Center

• State-of-the-art valve factory

• System manufacturing unit

• Engineering unit

• Research and development

functions

• Customer training services

• Sales and services

• Total of 32,000 square meters

• Currently 350 professionals

• Number of employees is

estimated to increase to

650 by the end of 2013

39

© Metso

Automation in China

Nanjing SAC Metso Control System Co., Ltd.

• Joint-venture company between Metso Automation and

Nanjing SAC (33%-67%)

• Operation started in 2011

• maxDNA solution and Nanjing SAC’s digital power plant solution,

services

• Approx. 300 employees

40

© Metso


Metso Paper Technology (Shanghai) Co., Ltd.

Location: Xuhang Town, Jiading

District, Shanghai

• Acquired by Metso in 2006

• Part of Metso’s global production network, delivering equipment worldwide

• Operation comprises engineering, foundry, manufacturing etc.

Products: Paper and board

machines, components for fiber

lines, stock preparation and

tissue machine

• Land area: 140,000 m2

• Building area: 43,000 m2

Number of employees:

about 670

41

Certificates:

• ASME /China Pressure

Vessel U Type Certificate

• ISO 9001 quality certificate

• ISO 14001 environmental

certificate

• OHSAS 18001 certificate

© Metso


Metso Paper Technology (Xi’an) Co., Ltd.

Location: 4th E Pang Road,

Xi'an, Shaanxi • Established in January 1989

• Over 100 paper or board machines or sections, mainly delivered to Chinese market in past 20 years

• Part of Metso’s global production network, mainly serves the Chinese market but also other markets in Asia-Pacific area

Products: Paper and board

machines, winders and related

components as well as tissue

machines

• Land area: 129,000 m2


• Number of employees:

about 730

42

Certificates:

• ASME Pressure Vessel U Type

Certificate

• ISO 9001 quality certificate

• ISO 14001 environmental

certificate

• OHSAS 18001 certificate

© Metso


Metso Paper (Shanghai) Co., Ltd.

Location: Wai Gao Qiao,

Free Trade Zone, Shanghai

• Established in 2003


• Employees: about 100

• Products: Screen baskets

manufacturing and service

• Manufactures and assembles

equipment for stock

preparation and recycled fiber,

including pressure screens,

pulp rotor units and cleaners

etc., as well as provides

maintenance service

43

Chroming, surface treatment for

baskets and other products

© Metso


Metso Paper (China) Co., Ltd.

Wuxi Service Center

Location:

Wuxi New District, Jiangsu

• Established in 2000

• Extended in 2007

• Service range from spare

parts to comprehensive

process solutions and mill

site services, a modern

workshop for roll services

• Extensive back-up for

pulp and paper deliveries

44

• Land area 19,200 m2

• Workshop 4,600 m2

• Office 1,780 m2

• Employees about 170

© Metso


Metso Paper (Guangzhou) Co., Ltd.

Guangzhou Service Center

Location: Yonghe Economic

Zone, Guangzhou

Inaugurated in January 2009

Service range from spare parts

to comprehensive process

solutions and mill site services, a

modern workshop for roll

services

Provides advanced machinery

maintenance and process

development services to the

pulp and paper making industry

in southern China

45



• Office 500 m2


© Metso


Metso Paper (China) Co., Ltd., Zibo Branch

Zibo Service Center

Location: Zibo New &

Hi-tech Industrial

Development Zone

• Inauguration in November

2010

Provides advanced

machinery maintenance

and process development

services to the pulp and

paper making industry in

northern China

46



• Office 500 m2


© Metso

Metso Fabrics (Tianjin) Co., Ltd.

Paper machine clothing production

• Located in the Tianjin Airport Free Trade

Zone

• Forming and dryer fabrics for Asia-

Pacific area and Americas

• Premises: 25,000 m2

• In operation since 2008


Filter fabrics production

• Located in the Tianjin Airport Economic

Zone

• Filter fabrics for Asia-Pacific area

• Premises: 4,400 m2

• In operation since 2007, relocated from

Shanghai to Tianjin in 2012


47

© Metso


Metso Paper (China) Co., Ltd. Beijing branch

Beijing Branch Office

• Location: Chaoyang District

• Sales office opened in 1996

• Capital projects sales office

and customer relationship

management

• About 35 local persons and

expatriates

48

Our references A solid track record and a trusted brand

name give Metso an edge in a market where

customers expect suppliers to operate

clearly faster than in Europe

© Metso

Metso in China

Results in China

• First deliveries to China by Metso Paper’s predecessors in the 1930s

• One out of every 2.5 pieces of paper and board consumed in China is produced with

Metso machines

• Over 50% of wood pulping capacity in China is produced from Metso’s deliveries

• The cutting-edge Advantage technology for producing specific grades of high-quality

tissue is provided by Metso

• Over 2,000 rock and mineral crushers delivered

• Over 100 grinding mills for minerals and coal delivered

• Over 30 bulk materials handling systems delivered

• Industry leader in flow control devices for the pulp and paper industry, with a 60%

share of the markets served

• Leading supplier of automation solutions (DCS, QCS etc.) to the pulp and paper

industry

• Distributed control systems (DCS) delivered to over 140 power plants in China

50 50

© Metso

References

Rock and minerals processing technology

• Dongguashan Copper Mine:

- SAG grinding mill in 2004

• Wuhan Iron & Steel:

- Iron ore pellet plant, 2006

• Qinhuangdao Coal Terminal:

- railcar dumper systems, 2006

• Jingtang Coal Terminal:

- railcar dumper systems, 2007

• Jiangxi Copper:

- MP800, 2008, primary gyratory crushers

• Taiyuan Iron and Steel

- SAG grinding mill, crushers, VPA, screens

• Chek Lap Kok Airport:

- delivered in 1994

- 1,000 ton/hour, turn-key quarry project

• Three Gorges Dam:

- delivered in 1995-1996

- 4,500 ton/hour quarry for dam construction

- 17 units of big crushers

• Longtan Dam: crushing equipment

- delivered in 2003-2007

- 3,000 ton/hour quarry for dam construction

- 16 units of crushers and screens

• Lafarge Group, Diwei Plant

- delivered in 2012

- a turn-key project

51

Metso’s technology has been applied in numerous mining, quarrying, steel

and power plant, harbor and construction operations in China, including:

© Metso

References

Case: Tisco’s Yuanjiacun Iron Mine

• TISCO - the largest stainless steel

manufacturer in China

• Yuanjiacun iron ore processing

plant in Lan county, Shanxi province

• Expected daily processing capacity

of 22,000-23,000 tons of iron ore

concentrate

• Scope of delivery by Metso

- Gyratory crusher

- SAG grinding mills

- VPAs

- Screens

52

© Metso

References

Case: Three Gorges Dam Project

• Three Gorges Dam - the world's

largest hydropower project at a

crest elevation of 185 m in Hubei

province

• Two of the world’s largest crushing

lines met crucial peak operations,

producing up to a record 11.47

million tons of aggregates annually

• Scope of delivery by Metso:

- Gyratory crushers

- HP cone crushers

- Omnicone crushers

- Barmac VSIs

53

© Metso

References

Case: Huanghua Port

• Huanghua port located in the Bohai

Gulf coastal regions of eastern

China's Hebei province

• The world’s largest quadruple

railcar dumpers in operation

delivered by Metso

• Each of the four lines have an

unloading rate of 8,600 MTPD, or

28 million MTPY

• Total four lines of quadruple railcar

dumper handling capacity over 100

million MTPY

54

© Metso

References

Case: SCIP-SSWS Project

• The hazardous waste incinerating

plant for the SCIP-SSWS project at

Shanghai Chemical Industrial Park

• The incineration system by Metso is

designed to decontaminate and

neutralize solids, liquids, gases and

sludge, thus reducing pollution and

emissions

• Two lines, each processing 120

metric tons of material per day

(MTPD); the system generates 14

tons of steam per hour for other use

• The largest and most modern

hazardous waste processing facility

in Asia

55

© Metso

References

Automation and control technology (1/2)

Metso has supplied automation and process control solutions for more than

100 industrial processes in China. Customers using our applications include:

• China-Shell Petrochemical Complex: Positioners, Control Valves

• CNPC Dushanzi Petrochemical Company: Positioners, Control Valves

• PetroChina Karamay Petrochemical Company: Positioners, Control Valves

• Praxair Meishan (Nanjing): Positioners, Control Valves

• Sinopec Guangxi Beihai: Positioners, Control Valves

• Sinopec Yangzi Petrochemical: Positioners, Control Valves

• PetroChina Sichuan Petrochemical: Positioners, Control Valves

• Beijing Sanhe Power Plant: Distributed Control System (DCS)

• Jiangxi Fengcheng Power Plant: Distant Control System (DCS)

• Maanshan Power Plant: Distant Control System (DCS)

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© Metso

References

Automation and control technology (2/2)

Metso has supplied automation and process control solutions for more than

100 industrial processes in China. Customers using our applications include:

• Huatai Group: Quality Control System (QCS), Machine Control

• System(MCS), Web Runnability Monitoring (WRM), Headbox Dilution

• System, Process Quality Vision (PQV), Consistency, Control Valve

• Sun Paper: Quality Control System (QCS), Machine Control


• System, Process Quality Vision (PQV), Consistency

• Shandong Chenming Paper Holdings Ltd.: Profiler, Distributed Control System (DCS), Process

Quality Vision (PQV), Quality Control System (QCS), Positioners, Control Valve

• Max Fortune Industrial Ltd: Machine Control System(MCS), Quality Control System (QCS),

Distributed Control System (DCS), Drive Control

• Zhejiang Ji'an Paper: Quality Control System (QCS), Machine Control


• System, Process Quality Vision (PQV), Consistency

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© Metso

References

Case: Shell Nanhai, China

• CNOOC and SHELL joint venture

in Guangdong, China

• Annual production of 2.3 million tons,

including glycols and polyolefins

Delivered:

• 3,500 valve controllers

• 3,000 rotary control valves

• 1,000 automated and manual valves

• Large installation of rotary control and

segment ball valves

• 150 valve controllers TÜV-approved

safety devices

• Local Automation service personnel

58

© Metso

• 2012: Total production of paper, board and tissue in China is about 103 Mtons, a net increase of

3.7%, i.e. 3.7 Mtons, on 2011

• New start-up capacity delivered by Metso in 2012 is about 2.6 Mtons, including 6 paper & board

machines, 3 tissue production lines, and 3 rebuilding projects

• Shanghai Orient Champion Paper,

PM8 35,000t/y various tissue grades

• Xiameng, Xinyang, TM1

60,000 t/y, various tissue grades

• Fujian Hengli, TM2

60,000 t/y, various tissue grades

• Anhui Huatai PM1 Relocation from

Mondi 200,000 t/year, fine paper

• Rebuild projects: APP Ningbo BM2

and BM3, Shouguang Chenming

PM2

• Fujian Liansheng PM6,

OptiConcept M

300,000 t/y, fluting

• Fujian Liansheng PM5, Multilayer

Headbox

350,000 t/y, Testliner

• Sun Paper PM26

550,000 t/y, Carton board, LPB

• Lee & Man PM17

600,000 t/y , White Liner Chip board

• April Xinhui PM11

400,000 t/y, fine paper

China Paper Industry Market

New start-up capacity delivered by Metso in 2012

59

© Metso

Highlights in pulp production processes

in China

• Shandong Chenming, world’s highest-yield BCTMP line

• Shandong Bohui, repeat orders for BCTMP line, biggest

mechanical fiber producer in China

• Shandong Chenming, complete wood-handling system,

features a new GentleBarking system

• Shandong Chenming, world’s largest deinking pulping line,

daily production 1,500 tons

• April SSYMB, world’s largest Kraft pulp chemical pulping

plant, Shandong Rizhao 4800 adt/day

• April SSYMB, world’s largest recovery boiler firing 7600

tds/day, the design speed is 6500 tds/day with Euca and 7000

tds/day with Acacia)

• Guizhou Chitianhua, world’s largest bamboo pulping process

• Fujian Qingshan, China’s first pre-hydrolysis dissolving pulp

line

60

© Metso

Highlights in paper, board and tissue

production line in China • Fujian Liansheng PM5, state-of-the-art

linerboard machine with world’s first OptiFlo Fourdrinier Layering headbox

• Zhanjiang Chenming PM1, Guangdong, world’s largest and fastest WFU machine, record speed

• HengAn (China) TM10, Advantage DCT 200 tissue machines with ViscoNip shoe press, speed record of 2,000 m/min

• Xiamen Xinyang's new Advantage DCT200 tissue machine record-fast start-up, reached guaranteed production speed within 9 days

• Nine Dragons PM30, fast hybrid former micro-fluting machine, 400,000 tons per year

• Zhejiang Ji’An PM3, world’s fastest coated linerboard machine, equipped with OptiLayer curtain coater, design speed 1,200 m/min

• IP Sun Paper BM26, 550,000 t/a Folding Box

Board/art board machine

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Fujian Liansheng PM6, world’s first

OptiConcept M paper machine.

“It took less than 3 hours in total from having

stock on the machine to get the saleable

paper on the reel.”

© Metso

References

Case: Sun Paper Industry Co., Ltd. (1/2)

• One of the largest paper and board producers in China

• Ordered 7 paper or board making lines for its Yanzhou mill, with a total capacity of 2 million tons per year

• March 23, 2006, International Paper and Shandong Sun Paper Ltd. formed a joint venture for coated board production in Yanzhou City, Shandong Province

• “Our strategy is to become the king of packaging board in China,” said Sun Paper’s Chairman Mr. Li Hongxin. He is also Chairman of China Paper Industry Chamber of Commerce

62

PM23, World’s first fine paper machine

with ValZone calender

PM26, carton board machine, ongoing project

© Metso

References

Case: Sun Paper Industry Co., Ltd. (2/2)

• One of the largest paper and board producers in China, and well-known as an innovative enterprise in China’s paper industry

• Installed 7 paper or board production lines, supplied by Metso, at its Yanzhou base, which has a total production capacity of over 2.2 million tons

• In 1998, the first board machine contract between Sun Paper and Metso was signed

• In 2005, International Paper (or “IP”) and Shandong Sun Paper Ltd. formed a joint venture and ordered the largest food package board production line from Metso for the joint venture

• In 2009, Sun Paper started up the high bulk fine-paper production line equipped with ValZone calender, supplied by Metso

• In 2012, IP Sun Paper started up the fourth carton board production line (PM26) supplied by Metso

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PM26, a gigantic carton board machine

with excellent start up: Within three

weeks of start-up, the production speed

exceeded the design capacity, and

within five weeks, the machine reached

its design speed

© Metso

Metso’s financial statements and other financial

information available on Metso’s website at: www.metso.com/investors Metso Corporation - Investor Relations

Fabianinkatu 9 A, P.O. Box 1220,

FIN-00101 Helsinki, Finland

[email protected] Tel. +358 20 484 3117

• Mr. Juha Rouhiainen, VP, Investor Relations

Tel. +358 20 484 3253

[email protected]

• Ms. Marja Mäkinen, Investor Relations Manager

Tel. +358 20 484 3211

[email protected]

• Ms. Emilia Peltola, Financial Communicator

Tel. +358 20 484 3161

[email protected]

• Ms. Tanja Mäkinen, IR Coordinator

Tel. +358 20 484 3117

[email protected]

Follow us at

• www.metso.com/investors

• Annual Report 2012 online: www.metso.com/2012

• LinkedIn: www.linkedin.com/company/metso

• Twitter: www.twitter.com/metsogroup

• Mobile: m.metso.com

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