UPM annual report 2014

UPM offers a wide range of renewable and recyclable products to be further processed into a variety of useful everyday products, and also provides

UPM’s interaction with customers is based on continuous dialogue and regular customer satisfaction surveys.

Customers value UPM’s comprehensive product range, reliability and excellent environmental performance.

services that meet the needs of a versatile range of customers.

STAKEHOLDERS 31–44

Continuous dialogue and collaboration with customers

CUSTOMER COLLABORATION IN UPM’S BUSINESSES

UPM’s businesses vary in the products and services they offer. Each business has its own customer management process and way of interacting with customers. A comprehensive understanding of the markets, knowledge of end uses and an appreciation of customers’ needs form the basis of UPM’s customer relationship management. UPM’s target is to provide customers with solutions that improve customers’ business processes, with a special focus on creating mutual benefits with increased efficiency. Mat- ters related to environmental performance are also at the centre of UPM’s customer offering. Collaboration with customers In addition to a continuous working dialogue, UPM is engaged in various development pro- jects with customers. Many of the projects are related to product development, supply chain efficiency and optimisation, as well as the co-planning of activities. Customer satisfaction is measured regularly in most businesses through customer satisfac- tion surveys conducted by a third party. Based on various business customer satisfaction sur- veys, the overall total satisfaction with UPM as a supplier is 77% (75%). The surveys act as a tool for further development, and bring an important customer dimension to performance management. Customers interested in responsibility Based on the dialogue and surveys, UPM’s customers take an interest in the company’s responsibility performance and the sustainability of its operations. Product safety, forest certification and chains of custody, resource efficiency, safety perfor- mance and the supply chain are among the most important topics. The significance of long term financial performance and profitability of the supplier have increased. UPM offers product declarations and environmental data for most products as a tool to provide customers with information on the sustainability of products and the supply chain. Read more on new printing paper UPM Valor (p. 26), new invisible film labelstock VANISH (p. 22) and UPM’s co-operation Hamelin Group on ecolabels (p. 49).

Wood Sourcing and Forestry

Pulp

Biofuels

Timber products Standard and special sawn timber

Energy

UPM Raflatac Self-adhesive paper and film labelstock

UPM Paper Asia

UPM Paper ENA Plywood

Product range

Softwood, birch and eucalyptus pulp

Wood-based renewable diesel for transport

Trading in physical and derivatives electricity markets

Fine papers, office papers, labelling and packaging materials

Magazine papers, newsprint, fine papers for various end uses

Plywood and veneer products

Wood and wood-based biomass (logs, pulpwood, chips, forest residues etc.), forest estates and lakeshore plots

Customer industries

Tissue, specialty, printing and writing papers, as well as packaging

Fuel distributors, transportation, oil and petrochemicals industry

Building, construction, furniture, joinery, packaging industries

UPM businesses and electricity supply sector in the Nordic countries and Central Europe

Label printers, packers, brand owners in durables, tyres, retail, A4, food, beverage, personal care, pharmaceutical, retail and logistics segments

Distributors, retailers, OEMs (original equipment manufacturers), printers and publishers, converters

Newspaper and magazine publishers, printers, cataloguers, retailers, distributors and converters

Construction, vehicle flooring, LNG shipbuilding and parquet industries

All UPM businesses using wood or wood-based biomass, forest owners

Measurement of customer satisfaction

Continuous dialogue, regular customer surveys

Continuous dialogue and collection of feedback, end-user studies

Continuous dialogue and collection of feedback, annual customer surveys

Continuous dialogue

Continuous dialogue, customer surveys, training, customer events

Continuous dialogue, regular customer surveys

Continuous dialogue, regular customer surveys

Continuous dialogue, bi-annual customer surveys

Continuous dialogue and regular customer surveys

Actions in 2014

• Sales and marketing co-operation with Canfor Pulp • Co-marketing events for customers • Increase of pulp production at all mills • Strengthened technical customer service in Europe • Strengthened sales in APAC and Europe Forest certification, sustainable forestry, water use and resource efficiency

• Supply chain and operative readiness in place • Strengthening partnerships with selected companies • Ensuring product functionality by

• Further focus on strategic markets and market- specific weighting • Optimisation of raw material quality and use

• Sale of hydropower from Kymijoki river power plants to KSS Energia

• Strengthen films & specials offering • Optimisation of production and distribution network • Product development partnership • Improvement of supply chain efficiency • Sustainability and recycling solutions

• Launch of a series of new value-added products and services • Joint development projects • Enhancing sustainability message further

• Launch of new

• Sharpened end-use prioritisation • Continuation of the ongoing work to improve supply chain performance and service • Quantifying value propositions • Customer and contract management

• Development of supply chain efficiency and services • Development of a new way of serving forest owners • Development of web solutions to improve customer service

products that bring savings to customers

• Joint product development • Development of service offering • Improved business interaction with customers

comprehensive testing

Important corporate responsibility topics

Reducing greenhouse gas emissions, biofuels- specific sustainability certification, social and traceability criteria in targets set by the EU Renewable Energy Directive • Global increase of advanced biofuel volumes and demand • Waste and residue-

Concern for fishways, low-emission energy

Product safety, lifecycle analysis, waste management, recyclability and forest certification

Forest certification, origin of wood, product safety and resource efficiency

Safety, forest certification, environ- mental performance, supplier audits at mills, ecolabels, resource efficiency and financial stability as a supplier

Chain of custody, origin of wood and forest certification

Forest certification, chain of custody, product safety and resource efficiency

Competitive price and sustainable forestry

Major changes in customer industries

• Significant growth of tissue and packaging board production • Sharp decline of printing and writing paper industry in mature markets • China’s role as the most important single country for consumption of pulp

• Growing importance of East Europe as a production area

• Structural changes in the electricity market

• Growth in personal care products • Retailer and distributor network development • Online shopping • Increase in automated product labelling and identification • Increase in adhesive- based fastening in manufacturing • Increased use of composite materials in materials technology

• Digitalisation • Structural overcapacity • Variations in raw

• Increased need for services, stocks and short lead times • Requirement for forest certifications has increased within on-site construction end use • More customer-driven

• Tightened competition • New Forest Act and other legislative changes impacting

Fine Papers APAC:

• Changes in graphics end uses • Increased share of e-media • Quality upgrade in cut-size business

based biofuels are favoured by both customers and legislation

forestry practices and competitive environment in Finland

material availability and costs

• Power shift in

global economy

specifications among industrial end users decreasing supplier’s possibility to differentiate with a product

• Consolidation

Labelling materials: see UPM Raflatac

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UPM Annual Report 2014

UPM Annual Report 2014