2. 16 February 2016
Finnish case study linked to
EBRD energy efficiency
project; Case Metsä Tissue
Lauri Romppanen

3. • Introduction
• Project Copernicus
• Cooperation with EBRD
3
Contents

4. METSÄ BOARD
Paperboard
Sales:
EUR 2.0 billion
Personnel:
2,600
METSÄ WOOD
Wood products
Sales:
EUR 0.9 billion
Personnel:
2,000
METSÄ FOREST
Wood supply and
forest services
Sales:
EUR 1.5 billion
Personnel:
900
METSÄ TISSUE
Tissue and
cooking papers
Sales:
EUR 1.0 billion
Personnel:
2,800
09 March 2016 Metsä Group4
METSÄ GROUP | Sales EUR 5.0billion | Personnel 9,600
METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 116,000 Finnish forest owners
METSÄ FIBRE
Pulp
Sales:
EUR 1.4 billion
Personnel:
850

5. OWNERSHIP 91% METSÄLIITTO COOPERATIVE
OWNED BY 116,000 FINNISH FOREST OWNERS
9% JOZEF ANTOSIK
3KEY
SEGMENTS
• CONSUMER
• AWAY-FROM-HOME
• BAKING AND COOKING
10 PRODUCTION UNITS IN
FIVE COUNTRIES
• FINLAND: MÄNTTÄ
• SWEDEN: MARIESTAD,
NYBOHOLM, PAULISTRÖM
• GERMANY: DÜREN, KREUZAU,
RAUBACH, STOTZHEIM
• POLAND: KRAPKOWICE
• SLOVAKIA: ZILINA
PRODUCTION
CAPACITY
640,000
TONNES / YEAR
OUR WAY
OF WORKING
RESPONSIBLE
PROFITABILITY
RELIABILITY RENEWAL COOPERATION
1.0 2,800SALES
EUR BILLION
PERSONNELMETSÄTISSUE
5

6. Metsä Tissue: hygiene and wellbeing for everyday life
Cleanness, hygiene, comfort and
functionality for public washrooms,
industrial work environment, hotels,
schools, restaurants and healthcare
− Solution range including toilet tissues,
hand towels, industrial wipes, napkins
and dispensers
Baking and cooking papers for
professional chefs, bakers and
household cooks
− Extensive product range in
convenient packages for
consumers and big reels for
converting
Leading brands loved by
consumers as well as products
developed for customers’ own
brands
− Extensive range of toilet tissues,
household towels, paper hand-
kerchiefs, facial tissue and napkins
as well as cleaning products
6

7. Project Copernicus

8. Project Copernicus, announced in April 2011
• 2 obsolete mills, Konstancin-Jeziorna and
Krapkowice, with low performance and bad
product quality, scattered and inefficient
logistics
• Krapkowice to be developed to a state of the
art operation and all production and supply
activities in Konstancin-Jeziorna to be closed
• The project will
– replace two old and inefficient paper machines
with two new ones
– close down the CHP plant and use natural gas
boilers for the heating requirements
– increase production capacity
8

9. Technology strictly focused on energy and
environmental aspects
• From coal to natural gas; CO2 emissions reduced by 35,000 tonnes per year,
reduced SO2 and dust -> EU Flower and Nordic Swan ecolabels achieved
• New paper machines’ energy consumption below EU BAT, top levels in tissue
production
• Increased utilization of recycled paper, positive effect on the waste management in
Poland
• Significantly reduced fresh water usage
• Effluent volume decreased by ~30% from present level despite of production
capacity increase
• Less wood fibers used in finished products with same or better product
functionality
9

10. Cooperation with EBRD

11. Getting started
• Several contacts/projects throughout years
• First meetings to explore financing alternatives in summer 2010
– Multi Project Facility, EBRD part of a syndicate
– Investments in Central Eastern Europe and Commonwealth of Independent States
• NDA signed in October 2011
– Project Copernicus presented to EBRD in detail
– Lots of detailed questions, especially around energy efficiency
– Discussion on possibility to have a bilateral loan instead of a syndicate began
11

12. Due diligence and loan negotiatons
• Green light from EBRD’s Investment Committee in November 2011, i.e. the Bank
was interested in working with Metsä Tissue
– Due diligence focused on the financials, market, environment and social aspects; very
detailed questions
– Site visits to Krapkowice
• Loan term sheet agreed in May 2012
• Loan signed in August 2012
12

13. Requirements in the loan agreement
• Project implementation in accordance with predefined project plan
• Quarterly reporting on the implementation and progress of the project
• Yearly reporting on Environmental and Social Matters
– E.g. verification of emission reductions, energy and water consumption
13

14. Lessons learned
• Thorough process; you need to know
your business and project
• The Bank might be able to support in
relations towards local authorities
• Help/expertise available too; energy
efficiency audit done in Zilina, Slovakia
by the Bank’s experts
• Second loan obtainable much faster
as the Bank knows us already
14