UPM CEO Jussi Pesonen Named European CEO of the Year

For his “consistent delivery in providing shareholders stable returns in a volatile market,” as one nominator wrote, UPM’s Jussi Pesonen has been named the Fastmarkets RISI 2019 European CEO of the Year. Pesonen is expected to accept the award at the Fastmarkets RISI European Conference in Vienna, Austria, in early March. The European CEO of the Year Award is nominated by a group of investment analysts, industry consultants, and commentators covering the European and global pulp and paper industry.

Pesonen received high praise from nominators. “His diligent efforts (resulted) in the transformation of UPM from a business that was primarily focused on paper production to one that has broadened its reach across the paper and pulp market,” wrote one analyst. “To deliver on such a long-term project with such clear mindedness is admirable. He should be seen as a leader of the industry that others can learn from.”

UPM’s Lappeenranta, Finland, biorefinery.

Jussi Pesonen was appointed president and CEO of UPM-Kymmene Corporation in 2004. Under his leadership, the Finnish forest products company has increased operational efficiency and expanded its pulp and paper market investments beyond Europe, in Asian

Before assuming the position as CEO, Pesonen held the positions of chief operating officer and deputy to the president and CEO of UPM-Kymmene Corporation Paper Divisions from 2001 to 2004. Prior to that, he held several management positions in the UPM Paper Divisions since joining the group in 1987. Born in Helsinki, Finland (where UPM is headquartered), Pesonen attended Oulu University, graduating with a Master of Science (M.Sc.) and Doctor of Science (D.Sc.) h.c. degree in engineering.

Jussi Pesonen,
UPM President and CEO

The company is thriving under Pesonen’s forward-thinking leadership. Operating profit has increased by 23.4 percent compared with last year, and the areas of energy and biorefining (pulp and biodiesel) are booming. These profits come despite the continued decline in graphic paper demand of up to 7 percent in the markets in which UPM operates.

On the pulp expansion side abroad, UPM has begun “Phase II” of its preparations for a new pulp mill in central Uruguay. The company plans to invest EUR 2 billion (about

US$2.26 billion) in a mill near the city of Paso de los Toros. The new mill would have capacity to produce about 2 million metric tpy of eucalyptus pulp. A year ago, UPM and the government of Uruguay signed an investment agreement that outlines the local prerequisites for a potential pulp mill; currently, UPM is carrying out technical studies and applying for the necessary permits.

UPM recently reported that it is taking part in the international public tendering process in the port of Montevideo, organized by the National Ports Administration (ANP) of Uruguay. The scope of the concession tender is the building and operation of a port terminal specialized in the storage and shipping of pulp, chemicals, and other inputs related to pulp production with a capacity to handle approximately 2 million metric tpy of pulp. The tender includes the design, financing, engineering, construction, operation, and maintenance of the pulp terminal. The tenure of the concession would be for 50 years.

“Since the signing of the investment agreement, both parties have come a long way and (made) solid progress in developing various prerequisites for the establishment of UPM’s second state-of-art pulp mill in central Uruguay with proven environmental performance,” Pesonen said following a February 8 meeting with Uruguay’s President Dr. Tabaré Vázquez, which took place in Montevideo. “We are now in an intensive phase, where the completion of all investment agreement targets is needed. Today, there are still plenty of tasks to be done, and our team is intensively working to reach the topics in the investment agreement within the planned timeline.”

Located in the country’s least developed area, the new pulp mill would provide the community with jobs, training and improved infrastructure. It is estimated that the project would increase Uruguay’s national GDP by 2 percent.

Under Pesonen’s leadership, UPM has been listed as the forest and paper industry leader in the Dow Jones European and World Sustainability Indices (DJSI) for 2018-2019 for the sixth time. Recently, UPM was listed as the only company in the Paper and Forest Products category in the list of 100 most sustainable corporations by the Canadian-based Corporate Knights media and research company. Inclusion on the list is determined by how well a company meets economic, environmental, and social criteria.

As The Biofore Company, UPM has invested interests into renewable and responsible products, including renewable biofuels and wood plastic composites. UPM´s growing business is currently centered in high value fiber, specialty packaging materials, and molecular bioproducts.

A case in point is the company’s cooperation with Arla Oy, one of the largest food manufacturers in Finland. Arla is the first company in Finland to use renewable wood-based bioplastics in gable-top paperboard cartons for milk, yogurt, and cooking products. Bioplastic is well-suited to dairy product packaging, as it has the same technical characteristics as the conventional plastic used in cartons; plus, like the old material, the new packaging can be recycled with cardboard. UPM’s Lappeenranta biorefinery uses tall oil that is a residue of pulp production in the raw material for the new bioplastic cartons.

In addition to the bioplastics in Arla’s new packaging, UPM’s BioVerno naphtha can also be used in biofuels—such as those that power the “Metropolia Biofore,” aka the Biofore Concept Car. The four-seated (and perfectly street-legal) passenger car has been designed and manufactured in partnership with Helsinki Metropolia University of Applied Sciences, the Finnish Funding Agency for Technology and Innovation, and several other partner companies.

“The Biofore Concept Car improves the sustainability of a car’s lifecycle in many ways,” states UPM. “First, by replacing traditionally plastic components with ones made from biomaterials, the overall weight is reduced significantly, which leads to lower fuel consumption. Second, the parts are recyclable and have a lower ecological footprint in production.”

These bold steps toward new markets are important to Pesonen’s leadership vision. “I’m honored to receive this prestigious recognition from Fastmarkets RISI. My biggest thanks go to the fantastic team at UPM, who have made the success happen,” Pesonen commented. “UPM has a unique business model; it is a versatile and growing company with the industry-leading balance sheet.

“Sustainable growth is absolutely vital in the modern business world, regardless of the sector. UPM has achieved it by offering sustainable and safe products for growing global consumer demand, through focused growth projects along with transformative prospects for future earnings growth.”

RISI and FOEX, two leading providers of commodities data and market analysis owned by Euromoney Institutional Investor PLC, have been rebranded as Fastmarkets RISI and Fastmarkets FOEX. This rebranding represents the investment made by Euromoney in Fastmarkets, which provides price reporting, analytics and events organization for global commodities markets, including the forest products sector, as Fastmarkets RISI. Businesses working in the pulp and paper, packaging, wood products, timber, biomass, tissue, and nonwovens markets can use Fastmarkets RISI data and insights to benchmark prices, settle contracts, and inform their strategies worldwide.
“The change to Fastmarkets is not just a new name and look,” said Dan Klein, CEO of Fastmarkets RISI and Fastmarkets FOEX. “It highlights our commitment to expanding and strengthening our presence in the global forest products market.”