What a tree can do – innovation enabling a more sustainable future Jim Biasca, Country manager US operations Stora Enso, Biomaterials division
The renewable materials company – our target Everything that’s made with fossil -based materials today can be made from a tree tomorrow 2 9/22/2018 Stora Enso Key Facts
Film: What a tree can do 3 4/5/2016
Examples of our solutions replacing fossil-based materials today Trayforma by Stora Enso can replace plastic in e.g. frozen food Dissolving Lignin can packaging replace e.g. pulp can be used for fossil-based phenol in producing Wooden textiles adhesives construction elements can replace EcoFishBox concrete in by Stora buildings Enso can replace polystyrene packaging 4 9/22/2018 Stora Enso Key Facts
30 countries, 26 000 stories • A leading provider of renewable solutions • Some 26 000 employees in 30 countries • Sales in 2017: EUR 10.0 billion • Shares listed on Nasdaq in Helsinki and Stockholm 5 9/22/2018 Stora Enso Key Facts
Stora Enso worldwide Countries where Stora Enso has production, plantations, or projects Stora Enso’s markets 6 9/22/2018 Stora Enso Key Facts
Supported by the global megatrends Growing Global population warming Changing Urbanisation Digitalisation lifestyles Growing Ecoawareness middle class Major global trends drive the world’s demand for renewable materials. Bio-based products are not only reusable, but also renewable. 7 9/22/2018 Stora Enso Key Facts
Stora Enso strategy Customer insight Developing offerings in accordance with customers’ needs to create value and growth, with sales excellence. Structured Innovation processes Focus on bio-based materials Clear roles and and chemicals, digitalisation, responsibilities, intelligent packaging, and standardised and new packaging solutions. harmonised working methods, operational excellence. Motivated employees Focus on inspiring leadership, good communication, performance management, and target setting. 8 9/22/2018
Our road to success in the bioeconomy Addressing Delivering Generating Introducing xxxx xxxx xxxx xxxx attractive sustainable superior new products end-use profitable ROCE and services segments growth 9 9 9/22/2018 Stora Enso Key Facts
Portfolio aimed at growth + + + + Biomaterials – Paper – Wood Packaging Consumer Products – Solutions – Board – Strategy for Strengthening Accelerating maximum current Expansion of Selective growth cash business and relative profitable generation creating new market share growth profitable in profitable growth niches 10 9/22/2018 Stora Enso Key Facts
Biomaterials division is in the heart of company transformation 11 7/3/2018
Biomaterials has the widest offering in the market Well managed certified 4 R&D centres renewable raw material 2 new products since 2014 6 strategic partnerships on innovation 7 digitalisation projects 5 pulp mills Finland, Sweden, Brazil, 60 countries Uruguay 1 376 MEUR sales 2016 +13.5% Q3 YOY 2017 2.15MT market pulp Only 18% of our external 203 MEUR EBIT 1 700 employees market pulp sales are geared to Q1-Q3/2017 22% are women the graphic paper market 14.8% ROOC Q3/2017
Our three focus areas Maximize value from Differentiate our Nordic pulp Create new platforms for growth eucalyptus pulp business • Continue to improve production • Reduce exposure in softwood • We build and develop strong efficiency business on: • Grow in fluff and dissolving pulp -Improved pulp properties • Improve cost competitiveness in -Regenerated cellulose and MFC • Continue to improve production Montes del Plata -Lignin efficiency -Bio-based chemicals -Extraction and separation • Innovate on pulp applications technologies with current customers 13 8 November 2017 Stora Enso CMD
Efficient use of raw material enable us to get many everyday products already today 30% of the wood can be used for sawn products. 70% for pulp and paper. 14
But through innovation we can get out more Improved pulp properties Regenerated cellulose & MFC Lignin Bio-based chemicals Technology platform for extraction & separation 15 7/3/2018
Innovation is key for sustainable profitable growth Product platforms 1. Improved 2. Regenerated 4. Bio-based 3. Lignin pulp properties cellulose & MFC chemicals Technology platform for extraction & separation 16 8 November 2017 Stora Enso CMD
Platform 1: improving pulp properties for existing products Fluff pulp • Hygiene and health, growing by 3.6% per year • Life expectancy and increased disposable income in developing countries • Improve fluff pulp properties to increase customer value Dissolving pulp • Dissolving pulp to textiles is a 6.1 Mt market, growing 6.8% per year Pulp • The increase of cellulosic fibre in textiles is driven by global brand owners • Improve quality to be able to differentiate in the value chain Pulp for specialty papers • Flexible packaging, labels, security, décor, among others • 28 Mt market, growing 1.8% per year • Fibre improvements, special additives, sustainable coatings & barriers, source reduction and other innovation opportunities Source: Smithers Pira, Hawkins Wright 17 8 November 2017 Stora Enso CMD
Platform 2: Developing new technologies for using wood fibre in textiles, non-woven and specialty papers Regenerated cellulose • Participate in the development of new technologies for using wood fibre in textile • Growing interest from global brand owners increases demand for renewable fibres • Opportunity to leverage on existing assets to enter this new market MFC • MFC has potential to be used in specialty papers and non-woven • MFC is a versatile material with potential to work as strength enhancer, additive, binder and barrier material • Stora Enso has a long history in the research of MFC and has a demonstration plant in Imatra, Finland Source: Stora Enso 18 8 November 2017 Stora Enso CMD
Platform 3: Lignin – big opportunities in many markets Phenol replacement • Phenolic resins is a 2.8 Mt market, growing at 4% CAGR • It replaces phenol in adhesives for plywood, OSB (oriented strand board), laminates, LVL and other wood construction materials • The carbon footprint for lignin is roughly 1/10 of the carbon footprint of phenol Carbon fibre • Light-weight high performance composites Lignin • 70 – 80 Kt market, growing at 9 – 12% CAGR • Low-carbon-footprint carbon fibre is unoccupied market space Energy storage • Substitution of conventional hard carbon anode materials in energy storage, namely Li-Ion Batteries and Supercapacitors • Market growing on average by 20% CAGR • Key applications: portable consumer electronics, power tools, electrical vehicles, Source: Stora Enso, Carbon Composites, IDTechEx, stationary applications and back-up systems LuxResearch, Markets and Research, Zion Research 19 8 November 2017 Stora Enso CMD
Platform 4: Bio-based chemicals replacing fossil-based materials Bioplastics and intermediates • Growing interest in packaging/bottling markets for renewable solutions • Reduction on carbon footprint and enhanced properties are key target areas C5 and • Market clearly favoring second generation biomass as the raw material source C6 • It is a very populated market place, thus, strategic alliances will be crucial to win sugars in this industry from wood Xylose • Key application is the xylitol (sweetener) market (approximately 120 Kt at 4 – 6% CAGR) • Compared to C6 sugars it still is a rather undeveloped market, mainly due to lack of pure xylose availability. This is changing with the biorefinery concepts • Growing interest and developments taking place in the market • Stora Enso well positioned to be a frontrunner here Source: PwC, Kline and Industry experts 20 8 November 2017 Stora Enso CMD
Strategic steps for new business and differentiation Pulp business - New platforms for growth Future growth options 2019 Grow in fluff and dissolving 2018 Enocell New business from dissolving pulp II 2017 Skutskär R&D platforms increased fluff 2016 Improve efficiency B2X demo plant, Raceland USA and increase 2015 Partnership with output in existing Rennovia 2014 operations Sunila lignin 2012 Montes del Innovation Plata centre for Enocell hardwood biomaterials dissolving Virdia pulp acquisition 21 8 November 2017 Stora Enso CMD
Lignin for Phenol Replacement Sunila mill, Finland
The LignoBoost TM process In the mill H 2 SO 4 Cooking chemicals and Black liquor out organic substances Drying Lignin extracted Evaporation Lime kiln Dried lignin used as fuel in lime Pulp mill kiln
Lignin opportunities
Potential in phenol replacement Total phenol market: 9,4 Mt Potential Market Value for Lignin: ~ 1,7 B EUR Phenolic Resins Stora Enso 4% CAGR 2,8 Mt lignin production Stora Enso lignin Other 1,6% production 50Kt 6,6 Mt
Benefits of replacing phenol with lignin Improved Cost efficiency and A safer alternative environmental footprint cost stability
Testing lignin throughout the value chain Chemical producers Plywood/ End use Resin producer Distributors OSB/HPL/LVL application OEMs
Microfibrillated Cellulose
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