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16 February 2016

Finnish case study linked to EBRD energy efficiency project; Case Metsä TissueLauri Romppanen

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• Introduction• Project Copernicus• Cooperation with EBRD

Contents

2 May 2023 Metsä Group4

METSÄ BOARD

Paperboard

Sales:EUR 2.0 billionPersonnel:2,600

METSÄ WOOD

Wood products

Sales:EUR 0.9 billionPersonnel:2,000

METSÄ FOREST

Wood supply and forest services

Sales:EUR 1.5 billionPersonnel:900

METSÄ TISSUE

Tissue and cooking papers

Sales:EUR 1.0 billionPersonnel:2,800

METSÄ GROUP | Sales EUR 5.0 billion | Personnel 9,600

METSÄLIITTO COOPERATIVE | Group’s parent company | Owned by 116,000 Finnish forest owners

METSÄ FIBRE

Pulp

Sales:EUR 1.4 billionPersonnel:850

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OWNERSHIP 91% METSÄLIITTO COOPERATIVEOWNED BY 116,000 FINNISH FOREST OWNERS

9% JOZEF ANTOSIK

3 KEY SEGMENTS• CONSUMER• AWAY-FROM-HOME• BAKING AND COOKING

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PRODUCTION UNITS IN FIVE COUNTRIES• FINLAND: MÄNTTÄ• SWEDEN: MARIESTAD,

NYBOHOLM, PAULISTRÖM• GERMANY: DÜREN, KREUZAU,

RAUBACH, STOTZHEIM• POLAND: KRAPKOWICE• SLOVAKIA: ZILINA

PRODUCTIONCAPACITY

640,000TONNES / YEAR

OUR WAYOF WORKING

RESPONSIBLE PROFITABILITY

RELIABILITY RENEWAL COOPERATION

1.0 2,800SALESEUR BILLION PERSONNELMETSÄ TISSUE

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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

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Project Copernicus

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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

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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

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Cooperation with EBRD

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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

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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

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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

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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

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