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Pulp & Paper Chemicals
Jan Svärd
2
Pulp & Paper Chemicals (Eka)
Sales 900 mln2,900 employees
Be the preferred supplier of bleaching and performance chemicals to the worldwidepulp and paper industry
Where Eka adds value
Function Coating
Water treatment
Retention Sizing Wet strengthBleaching Deinking
Application CoatingPaper machinePulp manufacturing Pulp
Paper Chemicals are added to the papermaking process to achieve the right paper quality and machine efficiency
3
Retention
What do we mean when we say Retention?
We want to minimize the loss of valuable components
Example of poor retention
4
Paper produced with Eka retention systems
05
1015202530354045
80 82 84 86 88 90 92 94 96 98 00 02 04
M tons1980 - 2005
5
Global Sodium Chlorate Market Supply 2006
Kemira13%
Erco ww16%
On site12%
Arkema3%
Others9%
Tronox4%
Canexus13%
Eka Chemicals 31%
6
Largest Paper Companies in the World 2005
0 2000 4000 6000 8000 10000 12000 14000 16000 18000
Stora Enso
International Paper
UPM
Georgia-Pacific
Oji
Weyerhaeuser
Nippon Paper
Smurfit-Stone
Abitibi-Consolidated
Asia Pulp & Paper
Capacity, 1000 t/a
North America
Western Europe
Eastern Europe
Latin America
Asia
Rest of the World
Sour
ce: P
öyry
The ten largest producers account for 27% of the world’s paper and paperboard capacity. We have strong positions with these companiesand they represent approximately 25 % of our turnover.
7
Long-term Demand Growth by Product Area through 2020
Average 2.1%/a
Cartonboards
TissueCoated woodfree Containerboards
Coatedmechanical
Uncoated woodfree
NewsprintUncoated
mechanical
Other grades
Sackpaper
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0 20 40 60 80 100Share of consumption in 2004, %
Demand growth, %/a
Sour
ce: P
öyry
8
Demand growth is moving to emerging markets
JapanNorth America
ChinaEastern Europe
Latin America
Rest of Asia
Western Europe
Africa
Oceania
Average 2.1%/a
Middle East
India
Russia
Sour
ce: P
öyry
0
1
2
3
4
5
6
0 20 40 60 80 100Share of consumption in 2004, %
Demand growth by region through 2020, %/a
Forecast average demand growth globally 2004-2020 is 2.1% per annum.Corresponding figure 1988-2004 was 3.8% per annum.
9
Major asset restructuring and cost reductions in the supply chain
We invest where the growth is!
Pulp
Paper &
Board
Traditional Paper and Board markets(N. Am, W. Europe, Japan, S. Korea)
Regions with high growth in demand(China, other SEA, Brazil)
Growth invest-ments in pulp and paper chemical plants and in technical support organization
Regions with low costs and available raw materials(S America, Indonesia, Russia)
Different regions demand different strategies and we have 20% of our turnover in emerging markets
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Our focus
Rationalization
Globalization
Increasing partnership with customers
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Rationalization
Substantial cost reductions of more than € 65 mlnduring the last 4 years
Closure of 10 production sites in Europe and NA
Relocation of equipment from Europe to Asia Pacific and South America
Automation and Industrial IT projects
12
Our focus
Rationalization
Globalization
Increasing partnership with customers
13
We are located where pulp and paper is produced
North America0
50
100
South America0
50
Europe0
50
100
Pulp production (Mton)
Paper production (Mton)
Asia/Pacific0
50
100
Eka Production plant
14
We are located where pulp and paper is produced
Bleaching chemicalsproduction- Brazil, Chile
Paper chemicals production- Brazil
Chemical Island - Brazil
Expansion of Paper chemicals production– China, Taiwan
New product line- Korea, China
New bleaching business concept implemented at morethan 15 mills in South America, North America and Europe
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Our focus
Rationalization
Globalization
Increasing partnership with customers
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New Eka Technologies leading to increased partnerships
We are filing more > 20 patents in 20061970 1980 20001990
New bleaching productfor mechanical pulp
New bleaching productfor chemical pulp
2010
Chlorine dioxide concept
New bleachingtechnology replacing
chlorine
New productsimproving printability
of paper
New bleachingsequence reducing
energy consumption
New wet strengthproducts for food
contact applications
Remote monitoringof chemical plants
New water treatmenttechnology replacingtraditional biocides
Chemical Island
Remote controlling
ChemicalsManagement
New paper chemicaltechnology for retention
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The traditional way of making ClO2 (chlorine dioxide)
Pulp mill responsibility
Delivery points
GENERATOR
WATER
ClO2-gas
REDUCINGAGENT
H2O2
ACID
SODIUMCHLORATE ClO2
STORAGE
ClO2CONCENTRATION
ANALYSIS
AB
SOR
BTI
ON
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Eka ClO2 concept moves delivery point
WASTE PRODUCTS
GENERATOR
WATER
ClO2-gas
REDUCINGAGENT
H2O2
ACID
SODIUMCHLORATE ClO2
STORAGE
ClO2CONCENTRATION
ANALYSIS
AB
SOR
BTI
ON
New delivery pointClO2
Pulp & Paper Chemicals responsibility
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Remote doesn’t mean far away….
…with modern Industrial IT
MILL B
Technical SupportEka Chemicals
- Trouble shooting- Specific problem- Benchmarking- 24/7/365
OnlineData Transfer
MILL D
MILL E
MILL F
MILL A
MILL C
20
Summary
We will grow profitability by:
Continued asset restructuring and cost reductionsin mature markets
Continued investments and further improved service capabilities in growing regions
Innovative chemistry and new products
Use of modern industrial IT to eliminatecosts and improve efficiency in the value chain
21
Thank you!Thank you!
22
Strong specialty product segments support pulp and paper growth
Back up slide
Colloidal silica - core technology and product in paper chemicals but also used in markets like electronics, pharmaceuticals, construction and coating industry. This combination makes us the largest silica sol producer globally.
Expancel - unique expandable microspheres used in paper production, but also in applications for e.g. the explosives, coatings and rubber industries.
Purate® - novel and fast growing water treatment /purification technology used in pulp and paper industry as well as for municipal water treatment.
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Growing and changing customer interface
Back up slide
Opportunity for cost reduction in the value chain
Optimization of working capital
Opportunity to sell new services and take increased responsibility in the value chain
Supplier’s Cost
VariableCosts
Fixed Costs
Customer’sCost
Customer’sPrice
We take actions in all the steps of the supply chain!
24
Eka Paper Chemicals Sales 2005Back up slide
Retention33%
Sizing40%
Others27%
Additive to retain fibre and filler in the paper
Water repellant for certainpaper grades
25
World Production of Paper and Paperboard
160180200220240260280300320340360
80 82 84 86 88 90 92 94 96 98 00 02 04
M tons1980 - 2005
Back up slide
26
Eka VMI – Supply Chain ExcellenceBack up slide
Automated orders
Improved visibility
Customere-invoice
Inventory
Consumtion
Status
Deliveries
Transporter
moving costs removing costs
27
Chemicals management services to the mill
Eka ASAOn-site sizing
Eka Puratebiological control
Eka NP 200retention
Eka MonitrolRetention control
Eka NIRPaper properties
Fast implementationEfficient operationsValue adding services
Back up slide
28
Industrial IT platform for remote operation and service
ClO2 VMI ASA
One Tool
Increased visibility
Automated Functions
Improve the service
Reduce the costs
Eka
Customer
Customer support Orderdesks Specialists
Back up slide
29
One system for value chain optimization
Supplier’s Cost
VariableCosts
Fixed Costs
Customer’sCost
Customer’sPrice
Process Development
Production Planning
Benchmarking
Logistics
Maintenance
ReducingConsumption
Staffing
Production Planning
VMI
New products
Improving quality
New services
Staffing
Maintenance
Utilization
Maintenance
Logistics
VMI
Raw materials
Utilization
30
Pulp and Paper Chemicals
Bleaching Chemicals(50%)
Paper Chemicals(35%)
Specialty Products(15%)
Business profile
Total revenues EUR 893 mln (2005)
2,900 Employees
Global market leader in bleaching chemicals for pulp manufacturing and performance chemicals for the papermaking process to achieve the right paper quality & machine efficiency
Business segments (incl. sales share of total Business Unit)
31
Gaustablick, Norway
Plant
32
33
Bohus
Rjukan
Alby
Example
Remote control of chemical operations
