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UPM Annual Report 2014
UPM Annual Report 2014
29
30
CONTENTS
Increasing efficient use
of resources
In 2014, UPM spent EUR 112 million (155
million) on research and development work
equating to 9.0% (21.1%) of UPM’s operating
cash flow. On top of the direct R&D expenditure
of approximately EUR 35 million (38 million),
the figures include negative operating cash flow
and capital expenditure in developing businesses.
Versatile use of wood biomass
UPM’s Biofore strategy is based on the versatile
use of renewable wood biomass, combined with
innovation, resource efficiency and sustainability.
The purpose is to replace non-renewable materi-
als with renewable, recyclable and low-impact
alternatives – the main drivers for bioeconomy.
Improvements in material efficiency make
it possible to consume fewer resources and raw
materials in production processes. Therefore,
UPM’s R&D work has expanded its focus to
the more efficient use and reuse of side streams.
The most recent examples are UPM’s Elurit and
Cinerit construction products that are made of
fly ash from the thermal recovery of biogenic
waste materials.
UPM has a global network of research cen-
tres to support the businesses and their business
development goals. All of UPM’s businesses and
R&D centres have adopted ecodesign in their
product development processes. This means that
environmental aspects are systematically inte-
grated into product design at an early stage.
Wide-scale collaboration
in new businesses
UPM is a shareholder in the Finnish Bioecono-
my Cluster (FIBIC). The Cluster’s research
programmes focus on the bioeconomy and prod-
ucts based on renewable materials, thus support-
ing UPM’s internal R&D activities. Moreover,
Innovations and R&D
UPM is a shareholder in the Finnish CLEEN
Ltd research company that is focusing on energy
and environmental research.
The research clusters support the Finnish
bioeconomy and cleantech strategies with the
aim of increasing sustainable businesses in
Finland. The clusters’ research projects are in
line with the research and implementation
activities of UPM’s Biofore strategy.
In July 2014, EU and industry leaders
launched a new European Joint Undertaking on
Bio-based Industries (BBI) in which UPM acted
as one of the founding members in industrial
consortium part.
This Public Private Partnership (PPP) aims
to trigger investments and create competitive
market for bio-based products and materials
that are sourced locally. For UPM, the PPP is an
important funding element for speeding up the
implementation of future investments in new
areas such as biochemicals, biocomposites and
biofuels.
In 2014, UPM received approximately EUR
2.1 million (3.8 million) from Tekes (the Finnish
Funding Agency for Technology and Innova-
tion) for its research projects. These projects
were carried out in co-operation with research
institutes, universities and other companies.
UPM’s intellectual property rights applica-
tions have increased significantly during the last
few years. The importance of patent registration
highlights the progress made in new businesses.
UPM’s biocomposites combine
natural fibres and plastic
The UPM Biocomposites business unit devel-
ops, manufactures, markets and sells high qual-
ity composite products and granulates for a wide
range of consumer and industrial applications.
The objective of UPM’s R&D programmes and business development
is to create new technologies and products, provide support to
and ensure the competitiveness of its businesses.
The share of R&D work increased in new technologies and growth
businesses such as developing biofuels, biocomposites, biochemicals,
biofibrils, pulp and CO
2
-neutral energy in 2014. UPM Biofuels
entered its commercialisation phase in 2014 and is included in
the UPM Biorefining business area.
UPM ProFi and UPM Formi composites
combine the best characteristics of natural fibres
and plastic. Their principal ingredients are
cellulose fibres and polymers, which can be
either virgin or recycled. The non-toxic compos-
ites can be recycled.
UPM ProFi products are used for decking
and other outdoor end uses. They are made
mainly from the surplus paper and plastic left
over from the production of self-adhesive label
materials.
UPM Formi composite is used to replace
plastic in many applications, from furniture to
consumer electronics. UPM Formi is manufac-
tured from cellulose fibre and plastics. Around
half of the oil-based plastic is replaced with
cellulose fibres in the biocomposite.
Products manufactured from UPM Formi
comply with food contact material requirements
stipulated in the EU and US Food and Drug
Administration (FDA) regulations.
The composite also complies with EU toy
safety regulations.
UPM Biochemicals has profound
know-how in lignin-based products
The UPM Biochemicals unit develops wood-
based chemical building blocks, performance
chemicals and biofibrils.
Chemical building blocks are a cost competi-
tive replacement for fossil-based monomers and
chemicals such as intermediates to bioplastics.
Performance chemicals utilise the basic structure
of the natural biopolymers of wood, such as
lignin and hemicellulose.
Biofibrils™ products and lignin, the binding
agent of wood, are examples of UPM’s perfor-
mance chemicals. Biofibrils are cellulose micro-
and nanofibril products that can be used for
shaping materials and giving them new charac-
teristics. Lignin for example can be used in
various resin mixtures and adhesives.
In 2014, UPM Biochemicals worked with
Renmatix to test the company’s water-based
Plantrose™ process. The goal is to convert
woody biomass into intermediates for subse-
quent downstream processing into biochemicals.
In addition, UPM Biochemicals signed
a lignin supply contract with Domtar Inc. to
develop the market and offer sustainable, value-
added products for a growing variety of end
uses.
UPM Biochemicals has developed profound
know-how and intellectual property in the area
of lignin-based products, e.g. resins, which are
typically used as binders in wood-based prod-
ucts. UPM BioPiva™ lignin for resin formula-
tions, based on UPMs proprietary activation
technology, is one example of this kind of
product.
Product development at UPM Biochemicals
is at the pre-commercial phase, with UPM
actively developing and testing industrial appli-
cations with its partners in order to create
mill-scale industrial concepts.
PARTNERSHIPS HELP BRING
ADDED VALUE TO SIDE-STREAMS
In December 2014, UPM announced its
agreement with Indicatorium Oy for the
international commercialisation of the food
freshness indicator technology developed by
UPM. Food freshness indicator is a smart
label that reacts to certain chemicals and
helps to determine whether a food product
is still fresh and safe to eat.
The co-operation is a good example of UPM
actively using its extensive patent portfolio,
by which it is seeking business development
and innovative partnerships for various
bioeconomy projects and the development
of by-product utilisation. With the help of
co-operation, UPM is aiming to develop new
business models and utilise patents that
would otherwise be neglected.
UPM is looking for partners among other
industrial companies, start-ups, research
institutes (e.g. FIBIC) and various other
entities that facilitate the commercialisation
of technologies (VTT, Sitra). Occasionally,
UPM also forms partnerships with its
customers, like in the case of the RafCycle
label waste recycling concept.
These partnerships help UPM divide the
workload, bringing more flexibility and
agility to its operations. UPM’s contributions
to the projects include transferring and
sharing its know-how on technology and
environment.
Read more:
www.upm.comUPM’s patent filings have grown
significantly in past years. The filings
are mainly related to UPM’s developing
businesses such as biofuels,
biocomposites and biochemicals.
EVENTS IN 2014
4 March:
UPM’s Biofore Concept
Car demonstrating versatile use
of biomaterials premieres at the
Geneva International Motor Show
11 March:
Fortum, UPM and Val-
met announce their plan to jointly
develop technology to produce
advanced biomass-based fuels
19 March:
UPM Plywood and
Finnish furniture manufacturer Isku
sign a partnership agreement on
thermo-formable UPM Grada wood
material to cut Isku’s form press
times by half
14
13
12
11
10
400
320
240
160
80
0
Annual patent filings 2010–2014
14
13
12
11
10
150
120
90
60
30
0
25
20
15
10
5
0
*)
Includes negative operating cash flow
and capital expenditures
■
Developing businesses
*)
■
Mature businesses
Of operating cash flow
UPM’s development expenditure
EURm
%
Read more on the reuse of materials (p.50).
BUSINESSES 15–30