Finnish Chemicals

6.6.2005
10:21
Sivu 1
no 2 | 2005
811612.qxd
PROCUREMENT
BENEFITING THE CUSTOMER
THE BALTIC SEA
RECOVERS SLOWLY
TIKKURILA GAINS FIRM
FOOTHOLD IN UKRAINE
Finnish Chemicals
for the finest production expertise
KEMIRA STAKEHOLDER MAGAZINE
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6.6.2005
10:22
Sivu 2
editorial
Good luck alone just isn’t enough!
KEMIRA
is a magazine for
Kemira’s Helsingborg site and its neighbours had an unpleasant surprise this year on
stakeholders, published
Friday 3 February. For safety reasons, all movement and outdoor activity in the vicini-
four times a year.
ty of the plant was minimised for some days. This was due to the worst incident in
PUBLISHER
Kemira’s history involving sulphuric acid tanks. 16,000 tonnes of sulphuric acid leaked
Kemira Oyj
P.O. Box 330,
from a tank, some to ground and some into the sea. A cloud of steam formed con-
00101 Helsinki, Finland
taining harmful acid droplets. We were fortunate that nobody was seriously injured.
tel. +358 10 8611
fax +358 10 862 1119
The basic cause of the accident has now been traced. Damage to an underground
www.kemira.com
cooling water pipeline to the plant – about one metre in diameter – led to a release of
EDITOR-IN-CHIEF
Helena Laaksonen
ALL MAJOR TANK CONTAINERS
Kemira Oyj
WILL BE CHECKED.
PRODUCTION
Sanoma Magazines Finland
Custom Publishing
cooling water under pressure. This washed away
the foundations of the acid tank, which tilted and
ruptured allowing acid to stream out.
It has been established that both the pipeline and the tank date back to the
P.O.Box 100
1960s. The tank had last been checked by an external inspector in 2001. There are no
00040 Sanoma Magazines
official regulations governing water pipeline inspections.
Finland
www.sanomamagazines.fi
Editor
We had no way of anticipating the rupture of the water pipeline, and still less of
predicting the consequent domino effect, with each incident followed by another at
Jukka Miettinen
Hannu Virtanen
an accelerating pace. Nothing of this kind has ever occurred before at Kemira, nor
Layout
anywhere else to our knowledge for quite some time.
Marjut Jouhki
We shall now inspect all of our major tanks to ensure that the events that oc-
Translator
Daryl Taylor
curred in Sweden cannot recur. We may need to modify our training, risk assessment,
PRINTED BY
quality systems, communications, production, maintenance, construction techniques
Hansaprint Oy,
and management. We must also be prepared for the worst scenario at all times.
Vantaa 2005
It is not acceptable to rely on good fortune in industrial opera-
ISSN 0356-5122
tions. We must improve our safety practices in order to main-
PAPER
2
Galerie One Gloss 90 g/m
coated with Kemira’s CoCoat
calcium sulphate pigment
COVER
tain our trustworthiness. One yardstick for measuring our
safety standards is based on our lost time accident rate.
Kemira’s LTA rating (absence from work due to accident per
Juha Salminen
one million working hours) fell from 16.3 in 1998 to 6.7 in
KEMIRA IN BRIEF
2004. The best companies in the chemical industry never-
We supply total services
theless maintain corresponding levels of less than 2.
and products in the area
of pulp & paper chemicals,
This means that we still have work to do in the field
water treatment, industrial
of safety.
chemicals and paints &
coatings. We employ nearly
8,000 people in 30
countries and our net sales
amount to approximately
2 billion euros.
Pieter-Jan Bots
Safety Manager
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8
EFFICIENT PROCUREMENT
Efficient procurement
operations also benefit
Kemira’s customers,
says Pekka Ojanpää,
Kemira’s Executive Vice
President, Procurement
and Logistics
27
TIKKURILA is expecting growth
in Ukraine.
12
TITANIUM DIOXIDE
is used to provide
UV protection in
KUVA LUMENE
cosmetics.
23
RECYC
LING
META
ca n s
L pain
is a g
t
ood w
prom
a
y to
ote s
ustain
deve
able
lopm
ent.
Contents
8
Procurement benefiting
the customer
Efficient procurement also serves the
interests of Kemira's customers.
16 The Baltic Sea recovers slowly
There are no shortcuts to improving
the state of the Baltic Sea;
only a slow and patient process.
IN EVERY ISSUE
4
Current topics
The chemical industry
and news about Kemira.
11 Europe needs chemistry
A strong chemical industry is
essential to European regeneration.
12 Titanium dioxide for
protection
Titanium dioxide in cosmetics can
protect the skin from UV radiation
in sunshine.
14 A new papermaking
machine for Sweden
A new machine will begin producing
paper at Kvarnsveden in November.
20 Solid expertise in production
Kemira's purchase of Finnish Chemicals
has brought a leading supplier of
sodium chlorate into the Group.
30 Kemira’s interim
report
Kemira’s first quarter
was strong.
24 Education goes international
Globalisation in the forest industry is
also affecting training in the sector.
31 Facts
Did you know this
about Kemira?
27 Tikkurila gains a firm
foothold in Ukraine
Tikkurila paints have secured a strong
position and reputation in the growing
Ukrainian market.
2/2005 Kemira 3
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SHORT NEWS
»
Kemira's environmental index, which
monitors seven important discharges
and the quantity of non-hazardous waste, fell to half of the 2003 level in 2004
to stand at 17 per cent of the 1990 reference level. The number of industrial
accidents also continued to fall. Environmental business activities increased to
5 per cent of continuing operations.
»
Finnish Prime Minister Matti Vanhanen spoke at the Erasmus University of Rotterdam in
April and also visited the
Kemira plant at Europoort. The Finnish
Premier's hosts on this
occasion were Jack van den Bosch (centre) and Denis Stirler (right).
Kemira sole owner of US water treatment
chemicals company Kemiron
»
According to information compiled by
the Finnish Institute of Management
(JTO), the Oulu plant of Kemira Oyj remains one of Finland‘s ten most active
enterprises in Finland for employee suggestions. The result last year was ninth
place (8th in 2003). The number of suggestions has quadrupled in Oulu since
1990, with 85.6 suggestions per one
hundred employees last year.
»
The international SPCI 2005 pulp
and paper industry
trade fair will take
place in Stockholm
between 14 and
16 June 2005. The
fair is the one of
the world‘s leading
exhibition and conference events for the
industry, providing a forum for businesses supplying products and services to
the pulp and paper industry. Exhibitors
from 31 countries will take part in the
event.
4 Kemira 2/2005
K
emira has reinforced its position in
the North American water treatment sector by purchasing the remaining 40 per cent holding in Kemiron
Companies Inc. Kemira previously held 60
per cent of this company, with the remaining 40 per cent held by Lawrence
Hjersted, the founder and managing
Kemira‘s North American water treatment operations essentially comprise
Kemiron and Eaglebrook International
Group, which was acquired last year.
These two companies can supply their
customers in both the local government
and industrial sectors with a large variety
of comprehensive solutions based on iron
NORTH AMERICA IS THE WORLD‘S LARGEST WATER
TREATMENT CHEMICALS MARKET.
director of Kemiron. Hjersted will continue
as Director of Kemira's water treatment
operations in North America.
“We are now the global leader in coagulants for water treatment, and will be
increasingly committed to developing
water treatment solutions in North America as well. The United States and Canada
remain the world's largest single market
for water treatment chemicals,” says
Lennart Johansson, President, Kemira
Kemwater.
and aluminum coagulants. The combined
net sales of Kemiron and Eaglebrook total
approximately USD 165 million and they
employ approximately 500 people.
Kemira has about twenty water treatment chemical production plants and distribution sites in the USA and Canada. The
company‘s North American headquarters
are in Florida, but it also has administrative functions in Matteson, Illinois.
■
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news
Enterprise acquisitions confirmed
The competition authorities have approved the purchase of Finnish Chemicals Oy by Kemira Oyj from Erikem Luxembourg S.A. The deal makes Kemira
the world‘s second largest supplier of
pulp and paper chemicals. It also gives
Kemira a comprehensive portfolio of
pulp bleaching products.
The main products of Finnish Chemicals Oy are sodium chlorate, sodium hydroxide, chlorine dioxide and sodium
borohydride. Its share of the sodium
chlorate market is just under 40 per
cent in Europe and just over 20 per cent
in the USA. The company‘s products are
also used in other industrial processes
and in water treatment, for example.
The sale of the Dutch specialty
chemicals company Verdugt BV (picture) to Kemira Oyj was also confirmed
after competition authorities approved
the deal. The sellers were CVC Capital
Partners and the serving management
of the company.
Acquisition of Verdugt BV triples
Kemira's sales of organic acids and derivatives to more than EUR 170 million
and opens up new growth opportunities for the company in terms of both
business operations and geographical
reach.
The purchase of Verdugt is in line
with Kemira’s strategy of shifting increasingly towards derivatives, and the
deal now makes Kemira the world's
leading producer and marketer of organic acid derivatives. Kemira is now
the world‘s second largest manufacturer of formic acid and its derivatives.
KEMIRA SELLS
ALL REMAINING
GROWHOW SHARES
Kemira Oyj has sold its remaining 8,344,999 shares in Kemira
GrowHow Oyj, corresponding
to some 14.6% of the share
capital of this company.
The shares were sold at a
price of EUR 6.00 per share.
The proceeds from the sale
were approximately EUR 50.1
million, before fees and expenses.
The shares were sold in a
placing lead managed by ABN
AMRO Rothschild. They were
sold to institutional investors in
Finland and internationally.
ABN AMRO Rothschild has
waived the lock-up agreement
entered into by Kemira Oyj in
connection with the IPO of
Kemira GrowHow Oyj in October, 2004.
Kemira Oyj no longer owns
any
shares
in
Kemira
GrowHow Oyj following the
sale.
KEMIRA PLACED IN NEW INDUSTRY CLASS ON HELSINKI STOCK EXCHANGE
The Helsinki Stock Exchange will begin using a new industry
classification standard in July. Kemira's operating sector under
the new classification will be Sector: Materials, Industry
Group: Materials, Industry: Chemicals and Sub-Industry: Diversified Chemicals.
Use of the new industry classification will improve the international comparability of companies listed on the Helsinki
Stock Exchange and provides them with a clearly defined
reference group.
The new system classifies companies under four headings: Sector, Industry Group, Industry and Sub-Industry. These
classes will replace the system that is currently used at the
Helsinki Stock Exchange. The new sectors are Materials, Industrials, Consumer Discretionary, Consumer Staples, Health
Care, Financials, Information Technology, Telecommunication
Services, and Utilities.
The Global Industry Classification Standard (GICS) is an international classification system developed by Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor's
(S&P).
The Stockholm, Oslo and Copenhagen stock exchanges
have been using GICS since 2001. Besides Helsinki, the classification is now due to be introduced in the stock exchanges
of Tallinn, Riga, Vilnius and Reykjavik.
2/2005 Kemira 5
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news
Although the order books of
Finnish chemical industry businesses
are unusually full, these businesses
nevertheless anticipate a fall in the
rate of production growth. The number of people working in the industry
is also expected to fall, but by less
than in other industries. The industry
expects to be able to pass on its elevated production costs to the customer, resulting in a slight improvement in profitability. The Research Institute of the Finnish Economy – ETLA
forecasts growth of 2.6 per cent in
the chemical industry this year.
Output of basic chemicals began
rising again in spring 2004 and a high
level was maintained for the rest of
the year. This was a reflection of the
favourable
economic
climate.
Growth was particularly evident in
demand for chemicals used by the
pulp and paper industry. The market
situation for titanium dioxide has improved and prices are rising again.
Both building construction and
renovation showed growth in 2004,
resulting in higher paint sales. Demand for printing inks has remained
stable in Finland. Exports of paints
and printing inks continued to grow,
with the principal export markets in
Russia and the Baltic States.
FOREST SECTOR BOOSTS
CHEMICAL INDUSTRY
According to the economic review of
the Chemical Industry Federation of
Finland, Finnish chemical industry
output continued growing until the
end of 2004. No major changes are
expected in the situation. The industry is faring better in the USA than in
Europe, where output even fell after
spring 2004.
AWARD FOR HUMANE
INTERNET PROJECTS
Sir Tim Berners-Lee, the British winner of
the first Millennium technology prize in
2004, visited Oulu and Tampere during
the spring. These visits marked the start
of a new global Millennium project to find
a suitable recipient for the 2006 prize.
Recognition prizes were awarded both
in Oulu and in Tampere to three projects
that have found humane ways to use the
World Wide Web and the Internet. The
recognition prizes in Oulu were awarded
to the Poliklinikka.net health service, Internet Relay Chat (IRC) and the Moop
mobile and networked learning environment. The corresponding prizes in Tampere were awarded to an Internet-based
booking system for health care laboratories, the mathematics department of
Päivölä Folk High School and the NettiNysse Internet bus.
MORE NEWS IN BRIEF
»
Chemicals output in China increased by 14 per cent in 2004. This
rate of growth was three times faster
than the global average.
(European Chemical News 4-10 April
2005)
»
Advances in R&D have already
made eucalyptus superior to birch
wood as a raw material for fine grade
6 Kemira 2/2005
paper. Research into birch wood has
been minimal in Finland.
(Finnish business magazine
Talouselämä 13/05)
»
Prussian blue was
the first modern synthetic pigment. This
blue iron compound
was created by chance in tests
made by a pigment manufacturer in the
early 18th century.
(Tiede science magazine 2/04)
»
The latest water quality classification
indicates that the quality of water in
Finland‘s lakes is largely unchanged,
but there has been a clear deterioration
in the state of sea areas.
(Ympäristö environmental magazine 2/05)
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news
KEMIRA PAID DIVIDEND
OF 34 CENTS PER SHARE
The Annual General Meeting of Kemira
Oyj approved a dividend of EUR 0.34
per share for the 2004 financial year.
The meeting authorised the Board
to decide on the use of retained earnings to purchase up to 2,156,030 treasury shares. Together with the company's current holding of treasury shares,
this will amount to 5 per cent of the
share capital and voting rights in the
company. The Annual General Meeting
also authorised the Board to decide on
the sale of the said total of 6,238,110
treasury shares. These shares may be
used, for example, to finance enterprise sales or mergers and acquisitions,
or to implement management or staff
incentive schemes.
The authorisations are valid for one
year from the date of the Annual General Meeting, i.e. until 5 April 2006.
STOCK MARKET
12-euro limit exceeded
Kemira‘s share price broke through the
12-euro ceiling for the first time in the first
quarter of 2005, taking the total market value of the company to nearly EUR 1.5 billion
at a Price/Book value ratio of 1.6. The rise in
the company‘s value over the last two
years has been remarkable, as the closing
price at the end of March 2005 was EUR
11.95, compared to a corresponding price of
EUR 6.05 on 31 March 2003, when the company‘s total market value was EUR 740 mil-
KEMIRA TO WORK WITH HELSINKI FESTIVAL
lion and its Price/Book value ratio was 0.7.
Kemira and Helsinki Festival have concluded a two-year partnership agreement. Kemira will also take part in the Baltic Sea work of WWF, which is a special project of the
Festival.
Read more about the Helsinki Festival at www.helsinkifestival.fi.
ary to March was consistent with market
Kemira‘s result for the period from Januexpectations. Operating profit was 43 per
cent higher than during the corresponding
period in 2004 and earnings per share increased from EUR 0.04 to EUR 0.15 (pro forma). In the week following announcement
ANSSI SOILA CONTINUES AS CHAIRMAN OF THE BOARD
of the interim result the share price varied
between EUR 10.30 and 10.70, compared to
strong, management consultant Ove
Mattsson, Markku Tapio, Head of the
State Shareholdings Unit of the Finnish
Ministry of Trade and Industry, Managing Director Heikki Bergholm of
Suominen Yhtymä Oyj and Kaija PehuLehtonen, Site Manager of the Oy
Metsä-Botnia Ab pulp mill in Rauma,
Finland will also continue to serve on
the Board.
a closing price of EUR 10.50 on the day before the announcement. One analyst monitoring Kemira reversed a previous “reduce”
recommendation for Kemira shares and encouraged investors to “accumulate”.
The writer is Päivi Antola,
Investor Relations Manager, Kemira Oyj.
HEX/KEMIRA SHARE PRICE
12,0
10,0
Kemira
8,0
6,0
HEX PORTFOLIO
4,0
01.2003
03.2003
05.2003
07.2003
09.2003
11.2003
01.2004
03.2004
05.2004
07.2004
09.2004
11.2004
01.2005
03.2005
The Annual General Meeting of Kemira
Oyj approved the proposal of the
nomination committee and elected a
seven-member Board of Directors to
serve for a new one-year term of office under the continued chairmanship
of Anssi Soila, M.Sc. (Eng. & Econ.) –
who is also Chairman of the Board of
Sponda Oyj – and the vice-chairmanship of Eija Malmivirta, M.Sc. (Eng.).
Company President Elizabeth Arm-
2/2005 Kemira 7
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By effectively managing our
procurement and logistics we
also support the competitiveness of our customers,
says Pekka Ojanpää, Kemira‘s
Executive Vice President,
Procurement and Logistics.
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BY J O R M A L E P P Ä N E N
PHOTOS BY P E K K A J Ä R V E L Ä I N E N
Procurement
benefiting the customer
A
business is better placed to invest in R&D and other
functions when the costs of top quality raw materials
and logistics can be kept below those paid by its
competitors. Purchasing is fundamental to Kemira’s customer-oriented business operations.
“All of the Group’s businesses compete to increase the
shares of their products and services in their chosen markets. Everyone is familiar with this kind of competition at
the top end of the value chain. All too frequently, however,
people forget that competition is equally tough throughout
the value chain – including raw material procurement,”
Pekka Ojanpää explains.
Despite its relatively small size, Kemira has managed to
secure supplies of all key raw materials. Even so, Ojanpää
describes the market situation as challenging.
cording to Ojanpää, is the demand for raw materials in
China.
“The impact of economic growth in China can be seen in
the prices of chemicals and various metals such as steel
and aluminium. For example, one important product for us
is aluminium hydrate, which is used in manufacturing coagulants for water treatment. This is an area in which
prices increased considerably last year and this year.”
“The third reason for our rising procurement costs has
been the unwillingness of the chemical industry that supplies these raw materials to invest in new production capacity in recent years. There has been lack of investment
because profitability has been limited. Now that demand
has increased, there is also more willingness to invest, but
it takes at least a year and often a couple of years to bring
new production capacity on stream.”
SUBSTANTIAL PRICE RISES
“The prices of many raw materials that are essential to
Kemira rose last year. Price fluctuations have been very
considerable. Under these circumstances it is our job to
maintain the relative competitiveness of purchasing functions and thereby ensure reliable supplies to our customers.”
Ojanpää identifies three principal reasons for the rising
prices of Kemira’s key raw materials.
“The first reason is the rising world market price of oil,
which is still continuing. This has an inevitable impact on
the prices of oil-based raw materials, which in turn affects
our production costs. Materials of this kind include propylene, ethylene and benzene. Oil price rises are also reflected in logistics costs, as a lot of our haulage is done by road.”
The second factor that increases Kemira’s expenses, ac-
USE OF ALTERNATIVE PRODUCTS INVESTIGATED
Chemists can solve some of the problems involved in raw
material availability by finding surrogate materials in the
laboratory.
“One noteworthy example of this among many was the
replacement of acrylic acid by lower cost acrylamide. The
search for alternatives has become more topical not only
because of rising raw material prices, but also because of
the new European Union chemicals Regulation. It is possible that when the Regulation takes effect some of the raw
materials used by Kemira will be withdrawn from the market, and then we shall need to replace them with alternatives.”
The procurement unit must continuously support the
R&D units for various production sectors of the current »
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availability and prices of raw materials.
“Many of our products are combinations of several substances. It is important to make an early start when
investigating the impact on the solution offered to customer of replacing
one substance with the another.”
IT PAYS TO CENTRALISE
PROCUREMENT
Ojanpää points out that the solutions
provided by Kemira to the forest industry, for example, are created
through co-operation with the customer. The quality and price of raw
materials affect customer choices,
which means that procurement functions must also maintain a close relationship with the sales.
“It is essential for Kemira’s productivity that all of the links in the value
chain interact with one another effectively. Any breakdown in communication at some point in the chain can
greatly increase overall costs.”
“We have centralised our (procurement) purchasing power by combining common raw materials for various
business operations. This work is not
yet complete, but we can already see
clearly that maximising purchasing
power in common raw materials improves our relative competitiveness.”
Ojanpää stresses the importance of
co-operation between the purchasing
managers of various business units in
finding effective synergies.
“Besides mutual co-operation, it is
also vital that we work together with
raw material suppliers. Effective procurement work requires close contact
and exchange of information. This is
an interpersonal business based on
trust.”
SAFETY FIRST
Kemira is growing not only organically, but also through business acquisitions. What is the importance of raw
material availability and logistical effectiveness in acquisitions?
10 Kemira 2/2005
“Procurement operations already
form an aspect of business integration
before an acquisition takes place, and
their role afterwards is an obvious
one. Before acquiring any enterprise
we have to make sure that key raw
materials will be available. We have to
consider how the purchasing power of
the new business can be combined
with that of Kemira as a whole. At the
same time we investigate logistical efficiency and synergies.”
Ojanpää explains that Kemira has
implemented similar solutions for logistics as in raw materials.
“We are combining the logistics
needs of Kemira’s various business op-
erations and centralising logistics purchasing when possible. We seek to
consider the entire operation and to
avoid partial optimisation. This is our
route to cost-effectiveness.”
PROCUREMENT OPERATIONS
MUST BE NEAR TO CUSTOMERS.
Ojanpää also stresses that price is
not the only factor that guides Kemira’s logistics package.
“Our main concern in logistics is
safety. Quality of service and price are
important factors, but safety must always come first.”
■
Pekka Ojanpää finds that
cost-effectiveness comes from
managing operations as a whole.
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Sivu 15
Europe today
STRONG CHEMICAL INDUSTRY SUPPORTS EUROPEAN UNION REGENERATION
I
n its recent report on the
as health-enhancing products.”
current trends. As the first step
“The main aim of this group
outlook for the chemical inThe Cefic report finds that
in the right direction, Cefic is
would be to work together to
dustry to the year 2015 the
the European chemical industry
proposing the establishment
create a clear, long-term vision
European Chemical Industry
risks losing its global leaderof a high-level advisory group
for the European chemical inCouncil – Cefic stresses that a
ship over the next few years.
of European Union policymakdustry. This would pave the
strong chemical industry is esThere are three key factors uners that would bring together
way for a common plan of acsential for European regeneraderlying this deterioration in
representatives from the Eurotion regarding the key factors
tion, wealth and national affluthe business environment: legpean Commission, the Eurothat will ensure the future of
ence. The report
islation, energy and
pean Parliament and the Memthe European chemical industry
calls for swift action
logistics. The Eurober States, small and large
in the Member States and at
Chemistry
to improve competpean Union is movchemical industry businesses,
individual enterprise level.” ■
itiveness
through
ing more rapidly
trade organisations and the sciis essential
close co-operation
than most third
entific community.
BY JUKKA-PEKKA JÄRVENTAUS
for product
between industry
countries to tighten
improvements its laws on health, The EU´s share of global chemicals
and public authorities. The report entisafety and the envi- production is dropping
in many
tled “Horizon 2015:
ronment. This alindustries.
Perspectives for the
ready means, for
European Chemical
example, that it
Industry” is the outcome of
takes three times as long and
work by 150 chemical industry
costs ten times as much to
experts.
bring a new chemical product
Unless rapid measures are
onto the market in the Eurotaken, the European Union’s
pean Union compared to the
status as a leading chemical inUSA.
dustry producer and investor in
René van Sloten says that
research and development will
the Cefic report identifies sevdecay over the next ten years.
eral key factors for improving
René van Sloten, Cefic’s Directhe competitiveness of the
tor of International Trade and
chemical industry through coSource:Cefic
Note: figures exclude pharmaceuticals and are previous to Enlargement
Competitiveness, points out
operation between the industhat the European chemical intry and public authorities.
Chemical products account for nearly
dustry is a key factor for prof“These key factors include
one-third of the material cost of an automobile
itable growth in many sectors
innovation, image and reputaof the economy and a source of
tion, international trade, legisnew, viable applications.
lation, energy and logistics. In
“Chemistry provides a platall of these areas the European
form for countless innovations
chemical industry faces difficulin information technology, aviaties that affect its competitivetion, medicine, hygiene, nutriness. To be able to respond to
tion, housing, clothing and a
these challenges effectively,
host of other areas of life. It is
the chemical industry and pubΣ=31%/car*
chemistry that provides the
lic authorities must reach a
stimulus for new inventions in
sound understanding on how
bio and nanotechnology, which
to tackle them.”
in turn give rise to new
Van Sloten stresses that it is
Source:Cefic
*European middle class car
processes and applications such
still not too late to influence
2/2005 Kemira 11
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Titanium dioxide –
the ideal parasol
12 Kemira 2/2005
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Sivu 13
If you care about your complexion in the long run, then you will take care to avoid overexposing your skin to sunshine. Ultrafine titanium dioxide provides protection from harmful ultraviolet radiation both in suntan lotions and everyday cosmetics.
BY HILKKA LAHTI PHOTOS BY LUMENE
T
he Kemira Pigments plant in the south-western
Finnish town of Pori also manufactures titanium dioxide pigments and ultrafine titanium dioxide for use as
raw material in the cosmetics industry. “Titanium dioxide
pigments have been used in cosmetics for many years to
improve the depth of colour. Ultrafine titanium dioxide, on
the other hand, is a newer product that is used to provide
protection against the ultraviolet radiation in sunshine,”
explains Leena Kujansivu, who is Product Manager of Specialty Products in Pori.
With greater awareness of the dangers of overexposure
to sunshine, people are now taking greater care to protect
themselves. “The more consumers learn about the drawbacks of ultraviolet radiation, the more they have been
looking for cosmetics that provide UV protection,” says Heli Aro, who is Technical Service Manager of Specialty Products in Pori.
skin, which means that it can also be recommended for
children and for people with sensitive skin who may react
to chemical UV-absorbers,” Kujansivu explains. Physical
UV-filters are also recommended for infants.
A suntan lotion must provide protection against both
UVA and UVB radiation. Ultrafine titanium dioxide is also
approved as a UV-filter in accordance with European Union
Directives. “This was the result of many years of work, as
previously only organic UV-absorbers were accepted in the
list of permitted UV-filters which cosmetic products may
contain,” Kujansivu points out. European Commission approval required extensive research into the purity and
safety of titanium dioxide products.
WHITE AND TRANSPARENT
Titanium dioxide pigments have traditionally been used in
cosmetics and toiletry products to improve the depth of
colour, as they provide the equivalent of a white backdrop
SUNSHINE: A BLESSING AND A CURSE
Solar ultraviolet radiation is a risk factor in skin cancer,
and excessive sunbathing also encourages wrinkles and
premature ageing of the skin. The effects of a radiation
dose on the skin last for many years, and so it is wise to protect yourself from sunshine.
The UV-filters used in suntan lotions and cosmetics are
either chemical or physical in function. Chemical UV-absorbers are organic substances that protect against the
harmful effects of solar radiation by absorbing it, while
physical UV-filters such as ultrafine titanium dioxide act as
a shield between sunshine and the skin.
“Ultrafine titanium dioxide provides protection by reflecting harmful ultraviolet radiation away from the skin.
Titanium dioxide neither penetrates nor sensitises the
UV-FILTERING IS AN ESSENTIAL PROPERTY
OF NEARLY ALL MODERN COSMETICS.
that makes colours appear more radiant. These pigments
are used in such products as lipsticks, mascara, face powder and foundation creams.
Ultrafine titanium dioxide, on the other hand, is used in
foundation and other skin creams or lipsticks because it
provides protection from ultraviolet radiation. The material is almost transparent in appearance.
UV-filtering properties have now become virtually an
essential feature of nearly all cosmetic products. The Sun
Protection Factor (SPF) of everyday cosmetics is lower than
that of suntan lotions proper.
■
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Sivu 2
New
Kvarnsveden
papermaking machine operational in November
Stora Enso will begin operating a new papermaking machine at
its Kvarnsveden paper mill in November. Construction of the new
PM 12 machine is a rare event for Northern Europe. Kemira will be
the lead supplier of chemicals for the wet end of the new machine.
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Sivu 3
BY J U K K A - P E K K A J Ä R V E N T A U S
K
varnsveden paper mill in Borlänge,
Central Sweden, is an industrial plant
with a long history. The mill was established in 1900 and many of its current
workforce of 900 people are from families
that have worked there for generations.
The four papermaking machines at the
Kvarnsveden mill produce 700,000 tonnes
of newsprint and uncoated magazine paper
annually. The PM 12 machine will have a
capacity of 420,000 tonnes, which will increase the overall output of the mill to
about one million tonnes, even after the
old PM 9 machine is decommissioned following start-up of the new machine.
production changes at other Stora Enso
mills, including the Langerbrugge mill in
Belgium.
“These changes will aim for more efficient and competitive production throughout the Group,” Fabritius says.
One feature of the globalisation of
Finnish forest industry corporations was a
marked trend for both business acquisitions
and real investment to occur outside Finland during the 1990s. More than 60 per
DEMAND RISING
IN CENTRAL EUROPE
DISINFECTING PAPERMAKING
Operations engineer Lars Fabritius explains that the aim is to find a market in
Central Europe for the net increase of about
300,000 tonnes.
“Demand seems to be rising in our main
markets for uncoated magazine paper
newsprint in Germany, France and the United Kingdom.”
Indeed the location of the Kvarnsveden
mill fairly close to the markets of Central
Europe is one reason for increasing its capacity.
“Kvarnsveden is one of the most efficient units in the Stora Enso Group. Over
the years the mill has proved to be a profitable site for investment.”
According to Fabritius, the availability of
raw materials is also better than in Finland,
where shortages have already occurred.
“The short-term impact of the unusually severe winter storms in Sweden mean that
raw materials are now being shipped north
from Småland.”
FALLING INVESTMENT
IN RECENT YEARS
The new papermaking machine at
Kvarnsveden will mark the beginning of
KEMIRA IS RESPONSIBLE FOR
MACHINES.
cent of total investment in 2000-2001 was
made abroad. A lower level of investment
has also continued in recent years. The total
investment of Finnish forest industry enterprises in 2004 was EUR 2.3 billion, of which
EUR 1.5 billion was targeted at sites outside
of Finland.
CO-OPERATION WITH
KEMIRA ENLARGES
Kemira has been working with the
Kvarnsveden mill for a quarter of a century.
After beginning in the early 1980s, this cooperation advanced from one papermaking
machine to the next, and by the middle of
the decade Kemira was responsible for disinfecting all of the machines in the mill.
Collaboration subsequently expanded to
include dispersing agents, with responsibility for retention agents as of 2004. At the
beginning of 2005 Kemira and Stora Enso
concluded a preliminary agreement on
comprehensive chemical supplies to the
wet end of the new PM 12 machine.
■
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The Gulf of F
a haven for birds and
BY ARI RYTSY
PHOTOS BY LEHTIKUVA
The avifauna in the eastern
reaches of the Baltic Sea is
particularly rich and diverse,
but heavy nutrient discharges
also encourage excessive
growth of toxic algae.
O
ver the last century a growing variety of birds, and particularly larger
species, have come to inhabit the
Gulf of Finland. The mute swan, the cormorant and the barnacle goose have been
highly successful, and the Canadian goose
has thrived following its introduction by
man. Even the long-gone white-tailed eagle
has gradually made a comeback to the
rocky islands and coastline of the Gulf.
Large gulls have favoured the region for
many years now. The reasons for this success are hard to specify.
“Improved nesting areas and changes in
attitudes both here and in the regions
where these species spend the winter have
certainly contributed to the general recovery. For example, hunting is more strictly
regulated nowadays than in the early 20th
century,” explains Professor Mikael Kilpi,
who is Head of Research at the Aronia joint
research and development institute of
Åbo Akademi University and Sydväst Polytechnic.
16 Kemira 2/2005
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Sivu 25
f Finland –
d algae
The Gulf of Finland suffers from chronic eutrophication due to
long-sustained excessive phosphorus and nitrogen loading.
2/2005 Kemira 17
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While the situation may therefore
land. Saltwater arriving from the North
gramme on protection of the Baltic Sea
seem favourable for ornithologists on
Sea is more dense than the freshwater
at the Finnish Environment Centre
the whole, Kilpi explains that problems
that reaches the Baltic Sea as rain and
(SYKE), this ”internal loading” phenom-
have arisen with particular species in
effluent from rivers and the coast, and
enon is currently the most important
the avifauna of the Gulf of Finland.
so it tends to remain near the seabed.
single reason for eutrophication in the
“The population of lesser black-
The resulting stratification hampers the
Gulf of Finland.
backed gull is falling, and this is an en-
normal currents that carry oxygen to
“Even though matters have largely
dangered species. The reason for this
the seabed, causing recurrent periods
improved in respect of discharges of
deterioration is probably not conditions
of oxygen depletion in sea depths. The
harmful and cumulative substances,
here, but environmental toxins in the
slow turnover of water in the Baltic Sea
summertime eutrophication due to in-
wintering regions. The eider duck has
also means that any nutrients, harmful
ternal
also been faring poorly in the Gulf of
chemicals and heavy metals that are
blooms of toxic blue-green algae have
loading
has
continued
and
increased.”
Internal loading has increased to
THERE ARE NO SHORTCUTS TO IMPROVING THE STATE OF
such a degree that it now partially ob-
THE BALTIC SEA; ONLY A SLOW AND PATIENT PROCESS.
through discharge reductions.
scures the favourable effects achieved
RESTORATION TAKES TIME
Finland for about 10–15 years now. This
discharged to this sea region remain
is a source of concern and the topic of
there for a very long time.
However, the basic problem of Baltic
Sea eutrophication lies in the nutrient
About 13 million people live in the
reserves that have accumulated on the
Environmental toxins are merely one
catchment area of the Gulf of Finland,
seabed as a result of sustained dis-
of a range of problems that threaten
and the human settlements, industry
charges over many years, and which will
bird stocks, and other factors can also
and agriculture of this area create ma-
continue to cause problems for several
be found to explain the disappearance
rine discharges amounting to more than
decades to come. Solutions proposed in
of species. Broods can be decimated by
6,000 tonnes of phosphorus and 120,000
Sweden – in addition to further dis-
hitherto unknown viral infections, for
tonnes of nitrogen each year. With Fin-
charge reductions – include enhancing
example. Eutrophication caused by ex-
land and Estonia each accounting for
the exchange of seawater with the
cessive nutrient discharges to the Gulf
some ten per cent of these discharges,
world’s oceans, artificial oxygenation of
of Finland also underlies changes in the
Russia remains the main source of pol-
the Baltic Sea, removal of nutrient-rich
region’s bird stocks, although unlike
lution, and is responsible for more than
sediment and remedial fishing on a
many other environmental influences,
half of the nitrogen and up to three
massive scale. Pitkänen reflects on the
the ultimate impact of this factor re-
quarters of the phosphorus reaching
inadequacy of our knowledge regarding
mains largely obscure.
this sea area.
the conditions for implementing such
A YOUNG AND SLOW-MOVING SEA
INTERNAL LOADING ENCOURAGES
The Gulf of Finland forms part of the
ALGAL BLOOMS
Baltic Sea: a relatively small, young and
The impact of phosphorus and nitrogen
such manipulation could cause. The fact
shallow body of water that is replen-
discharges on the Gulf of Finland and
is that the Baltic Sea is a heavily used
ished rather slowly. The Baltic is linked
the archipelago sea area off the South-
sea area. There are no shortcuts to im-
to the North Sea and the world’s great
west Coast of Finland has reached an
proving its condition; only a slow and
oceans only through the narrow and
advanced stage. Under conditions of
patient process.”
shallow Straits of Denmark, and its
oxygen depletion, chemical and micro-
Pitkänen concludes that it is unreal-
brackish character arises from the mix-
biological reactions occur in the sedi-
istic to speak of restoring the Baltic Sea
ture of fresh water and salty seawater.
considerable research.”
measures and on their effectiveness and
side effects.
“We have no idea what new problems
ment layers formed from dead organic
to a natural state. “We can be happy if
The salinity of Baltic seawater varies
matter that has sunk to the seabed. One
we manage to reduce discharges to the
between 15 parts per thousand in the
effect of these reactions is to release
pre-1950s level. But even this will not
Straits of Denmark to less than 2 parts
previously fixated phosphorus back into
mean that the sea itself would immedi-
per thousand in the farthest reaches of
the water. According to Heikki Pitkä-
ately return to its condition of half a
the Gulf of Bothnia and the Gulf of Fin-
nen, who leads the research pro-
century ago.”
18 Kemira 2/2005
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Regional international
co-operation essential
The fate of the Baltic Sea depends on future trends in European Union agricultural policy and
on the attitude of the region‘s coastal States towards conserving the unique marine ecosystem.
egional co-operation between the countries around the
R
Point discharges in Finland have now been brought under
Gulf of Finland is of major importance, particularly in con-
quite effective control. Use of precipitation chemicals has greatly
trolling the discharges of the St. Petersburg area. Waste-
improved the progress made in this field in Estonia. The ambi-
water discharges may be reduced through chemical and biologi-
tious future objective for St. Petersburg is likewise to bring dis-
cal treatment and by improving industrial process technology.
charges to levels well below those recommended by the Baltic
For example, only a little over 50 per cent of the phosphorus
Marine Environment Protection Commission – HELCOM.
in domestic wastewater treated in St. Petersburg is removed in
“I think this is a desirable trend, as according to the latest da-
processing, even though chemical precipitation could increase
ta St. Petersburg is seeking to bring its phosphorus discharge
this figure to about 90 per cent.
rates down to one part per million. Cutting the concentration of
discharged phosphorus from the HELCOM recommendation of 1.5
The Greylag goose
mg per litre to less than 1 mg per litre would already reduce
(Anser anser) nests in
phosphorus loading of the Gulf of Finland by nearly as much as
the Archipelago sea
the combined phosphorus discharges of Finland as a whole, in-
area of the Gulf of Fin-
cluding non-point discharges. This objective would be complete-
land. This species is
ly unrealistic without chemical precipitation,” observes Aija Jan-
rare in Finland.
tunen, Kemira Kemwater‘s Marketing Director for Russia, the
Baltic countries and Finland.
PHOSPHORUS PRECIPITATION IS AN EFFECTIVE
METHOD OF PROTECTING THE ENVIRONMENT.
Kemira will shortly be involved in launching phosphorus precipitation trials at two wastewater treatment plants in St. Petersburg. The Finnish Ministry of the Environment is considering an
application for a subsidy towards the costs of dosing equipment.
The authorities have shown provisional interest in the project.
Jantunen feels that this reflects an awareness of the effectiveness of phosphorus precipitation for environmental protection.
“Precipitation is a powerful method of dealing with point discharges, as it is immediately effective and requires no major capital investment,” Jantunen explains. There is no call for despair
with respect to the future of the Gulf of Finland in her opinion, as
something can always be done.
For example the new, stricter requirements for wastewater
treatment in sparsely populated areas will enhance water protection in Finland. There is also plenty of work to be done in dealing with non-point discharges from forests and fields.
■
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BY H A N N U V I R T A N E N PHOTOS BY J U H A S A L M I N E N
Finnish
Chemi
for the finest production exp
Finnish Chemicals is one of the world's most
efficient leading suppliers of sodium chlorate.
This enterprise has focused strongly on improving output and has been closely involved
in the success of the Finnish forest industry.
S
odium chlorate is a raw material for manufacturing
chlorine dioxide, the most common bleaching chemical used in modern pulp production. Finnish Chemicals makes sodium chlorate using a patented electrolysis
technology at its manufacturing plants in Äetsä and Joutseno in Finland.
“Our production facilities are in excellent condition.
Our chloralkali and chlorate technologies are based on
our traditional core competence in electrochemistry. We
have also subsequently developed the technology for manufacturing sodium borohydride. Our manufacturing operations compare favourably with any competing technologies,” says Jarmo Savolainen, who headed the pulp and paper chemicals division of Finnish Chemicals.
Savolainen is currently responsible for Kemira’s entire
bleaching chemicals operation following Kemira’s purchase of Finnish Chemicals from Erikem Luxembourg S.A.,
a company administered by international capital investors.
Besides its operations in Äetsä and Joutseno, Finnish
Chemicals also manufactures chlorate in the USA at Eastover, South Caroline and Augusta, Georgia, and chlorine
dioxide at Kuusankoski in Finland. The company also
makes chemicals for the pharmaceutical and water
chemicals industries at its plants in Äetsä and Joutseno. Finnish Chemicals is also Finland’s largest importer of caustic soda. The company has a total staff
of about 450 people, nearly half of whom work at
Äetsä.
Finnish Chemicals was established in 1937 to
manufacture chlorine for the rapidly growing pulp
industry. The company was founded by major Euro20 Kemira 2/2005
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Sivu 21
micals
–
xpertise
pean chemical industry corporations.
“Consumption of chlorine fell sharply at the end of the
1980s when the pulp industry discontinued its chlorinebased bleaching operations for environmental reasons.
This meant that Finnish Chemicals had to increase its output of sodium chlorate rapidly to meet the growing demand for this substitute product. The company successfully
rose to this challenge and chlorate technology has subsequently been further developed, with additional manufacturing capacity constructed to meet rising demand and a
growing market.”
In 2000 Finnish Chemicals purchased the US company
Huron Tech. The USA was just making the transition away
from chlorine bleaching at this time and Finnish Chemicals
was keen to gain a foothold in the emerging chlorate market. Huron Tech was also offering interesting expertise.
“In particular, they had developed a technology for coating the anodes used in electrolysis that enabled fine-tuning
of production for improved energy efficiency.”
ELECTRICITY PRICE FLUCTUATIONS
CALL FOR FLEXIBILITY
Kristo Korpela (left) and
Jarmo Savolainen are
convinced that membership of the Kemira
Group will open up new
market opportunities
for Finnish Chemicals.
The profitability of manufacturing is largely a matter of energy efficiency and of the price of electricity at various
times. Finnish Chemicals is capable of using the same
amount of electricity annually as the entire city of Tampere
including all of its industrial plants combined. The company’s annual consumption of 1.2 terawatt hours is equivalent
to about 1.5 per cent of Finland’s total consumption of electrical energy.
“The price of electricity varies by time of year and time
of day. It was worthwhile for us to construct reserve capacity in order to take advantage of these price fluctuations.
Our production runs at full speed when electricity is cheapest, but when the price rises we may cut back to as little as
one third of this maximum operating rate,” Savolainen explains.
The company’s overall sodium chlorate manufacturing
capacity is nearly 250,000 tonnes per annum.
“Our capacity was originally dimensioned for the
Finnish market. From time to time, however, it has been
worthwhile maintaining manufacturing levels that
exceed the domestic demand. This has led to a
search for export markets. More than one third
of our output has been exported in some
years. The low dollar-euro exchange rate has
reduced the profitability of exports to USDbased markets recently, however, and the
share of exports in our operations has contracted.”
Besides
production
efficiency, »
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Sodium chlorate is supplied either in solution or in crystalline form.
Production is based on the company’s own patent electrolysis tech-
Finnish Chemicals makes sure that deliveries are correctly timed.
nology. Most of the electrolytic cells are also manufactured in-house.
Finnish Chemicals has invested in improving its logistics
services. Sodium chlorate is supplied to the customer either in solution or in crystalline form. The company has assumed responsibility for monitoring the stocks of its customers and ensures that deliveries are made at the right
time. The chlorine dioxide manufactured at the Kuusankoski plant is piped directly to neighbouring pulp mills
according to the current needs of the customer.
The company has also developed its own sodium borohydride products for dithionite bleaching of mechanical
pulp. This product has also been further commercialised as
a readymade dithionite solution that is especially suitable
for smaller-scale users and which improves safety in
bleaching.
Fine and specialty chemicals have also been produced
alongside the core products that are manufactured in bulk
for the pulp and paper industry.
“Products for the pulp and paper industry account for
about 80 per cent of the company’s net sales. Fine and spe-
cialty chemicals are a growing product area, however. The
prices of such products can be more than one hundred
times that of our basic product lines. All of our fine chemicals go for export.”
Finnish Chemicals is the largest industrial employer in
the Äetsä region. Many local families have several members from various generations working for the company.
Two members of the current workforce have been with the
company for over 50 years.
”Finnish Chemicals has been a steady employer and a
sought-after place to work. All members of staff have a
range of skills and their work provides variety of content,”
says Kristo Korpela, the Chief Shop Steward of the company. His own duties are in the machine repair shop at the
Äetsä plant. Korpela explains that the company’s entry into
the Kemira Group was well received at the plant and has
reinforced the confidence of its workforce in the future of
the operation.
■
UNBEATABLE SYNERGY BENEFITS
The acquisition of Finnish Chemicals made
the customer’s point of view when we can
Corresponding functional benefits will al-
Kemira the world’s only supplier offering a
show greater impartiality in emphasising
so arise for water treatment chemicals
complete product portfolio for pulp bleach-
overall optimisation. We do not need to
when Kemwater manages to integrate with
ing. This further reinforced the company’s
favour certain chemicals in order to enlarge
its raw material sources.
position as a strategic partner for pulp and
our business. This also opens up new vistas
Lindholm reveals that Finnish Chemicals
paper manufacturers.
for our research activities and is sure to im-
was considered by Kemira as a desirable
prove their productivity.”
acquisition for as long as 25 years. However,
“The industry is moving increasingly towards more comprehensive services. Chem-
It is now possible for new bleaching
the time was not ripe from Kemira’s point of
ical suppliers are assuming responsibility for
chemical plants to be constructed to pro-
view when this company changed hands
a growing proportion of pulp manufacturing
duce a combination of sodium chlorate and
on two previous occasions in 1982 and
processes, chemical management in mills
hydrogen peroxide. Chlorate production
1996. Now Kemira has finally made its
and water treatment. It is easier to partici-
gives rise to hydrogen, which is a raw ma-
move.
pate in these changes when we command
terial for peroxide. Particularly in developing
“We can see unbeatable prospects for
the entire bleaching chain together with ex-
markets such as Latin America and Asia, it
growth and increased cost-effectiveness in
pertise in water and paper chemicals,” says
will also be possible to set up local bleach-
this new arrangement. Feedback from our
Juhani Lindholm, Executive Vice President
ing chemical installations as part of new
customers has underlined our own assess-
of Kemira Pulp & Paper Chemicals.
pulp mills in order to serve the customer on
ment of the synergy benefits that are now
the spot.
available.”
“It must also improve our profile from
22 Kemira 2/2005
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Sivu 41
From paint
cans to car parts
BY ARI RYTSY PHOTOS BY JUHA SALMINEN
Recycling empty metal paint cans is a good way to
save energy and promote sustainable development.
Including paint cans in the small-scale metal collection
scheme also increases recycling of steel.
M
etal paint cans are often regarded as hazardous waste.
This is a reasonable view if
they still contain wet paint. When
empty and brush-dry, however, paint
cans are just like any other metal
packaging waste.
Since the beginning of 2005 empty paint cans and depressurised
aerosol containers have been collected for recycling in Finland together
with other small-scale metal waste
and packaging. This new national
scheme has been introduced following a successful pilot project recycling
these waste items from households
in the Turku region of Southwest Finland.
According to Pekka Kotilainen,
the Environmental Manager at
Tikkurila Oy, the new recycling practise is a user-friendly solution to a
problem that has worried many consumers. “This is a clear advance,
which gives individual consumers an
opportunity to participate in recycling
empty paint cans.”
Collection points for paint cans
were previously few and far between in Finland, and were mainly
geared to serving the needs of industry and large-scale paint users. The
number of collection points has now
increased.
A European Union proposal envisages that half of all metal packaging
will be recycled by the year 2008.
Achieving this aim will require solid
commitment from the entire painting industry to supporting the project
and playing its part in arranging recycling. Two-thirds of all paint packages
are used in the contracts of professional painters and industry.
Paint can collection has already
been a familiar aspect of the work of
large-scale paint users and industry
for many years. For example, more
than half of all paint cans used in industry are recycled. The European
Union packaging Directive, which
was last revised in February 2004,
has encouraged this practise.
Heikki Riste, who is Marketing
Director of the Environmental Register of Packaging PYR Ltd and Managing Director of the metal packaging
recovery organization, Mepak-Kierrätys Oy, regards this interest in recycling as a good thing on both environmental and energy conservation
grounds.
“In the case of steel and tin packaging, use of recycled materials
saves 75 per cent of the energy that
would otherwise be spent in processing virgin raw materials.” Industry research also indicates that from
an environmental point of view reprocessing paint cans is more costeffective than recycling old motor
vehicles.
The recycled steel from paint containers can be used for such products
as automobile parts and even
ploughshares. This is no trivial source
of raw materials, as a single 20-litre
paint can contains 1.5 kilograms of
scrap metal.
“Steel is basically an ideal recyclable material, as it is easy to separate
from other waste and can be used
over and over again,” Riste explains. ■
Heikki Riste points out that
recycling paint containers is
good for the environment
and for energy conservation.
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The international character of the
modern paper industry makes it
even more appealing to
Philip Gerstner and
Hanna Kunnas.
24 Kemira 2/2005
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Sivu 23
Globalisation in the forest industry is also affecting training
in the sector. Forest products technology studies at Helsinki
University of Technology are expected to attract an increasingly
globally oriented type of student from both Finland and abroad.
BY J U K K A - P E K K A J Ä R V E N T A U S
PHOTOS BY J Y R K I K O M U L A I N E N
Globalisation appeals to
paper industry
students
H
anna Kunnas, from the South
Coast town of Kotka, began her
M.Sc. studies in the Department
of Forest Products Technology at
Helsinki University of Technology in
2000. Hanna is majoring in paper technology, a career choice that she made
while still at school, following a
trainee assignment at the Stora Enso
paper mill in Kotka.
Nearly half of all paper technology
students nowadays are women. Indeed the number of women working
in the industry has been increasing for
some time. As a shift manager in Inkeroinen last summer, Hanna was also
responsible for an operation with a
staff of 21 employees.
“Naturally I was warned that a
young woman in such a position might
not command immediate respect.
However, I had no problems at the
Stora Enso paperboard mill in Inkeroinen or at the M-Real mill in
Kirkniemi.”
WELL PREPARED FOR WORK ABROAD
Five years of continuous studies have
brought Kunnas near to completing
her M.Sc. programme. While working
at the Anjala paper mill this summer
she intends to think through her M.Sc.
thesis with a view to tackling this final
stage in the autumn.
“I’ll start by looking for a position
as a mill operations engineer when I
graduate next year. I am focusing on
the Finnish labour market at the moment,” Hanna says, indicating her engagement ring. “I might also be interested in international assignments after I get some work experience. This
will involve some further discussion
with my partner, who works in the automotive industry.”
Hanna explains that she is already
well prepared to work abroad, as the
last two years of her M.Sc. programme
have been taught in English.
“The advantage of English is that I
have mastered the terminology that is
used in the industry throughout the
world. On the other hand, people
working in Finland continue to use
Finnish industry jargon that cannot be
completely eliminated.”
FINLAND CATCHES THE EYE
Philip Gerstner from Germany is a
first-year student in the same university department as Kunnas. He is involved in the Linkage Programme,
which is part of the international
training operation at Helsinki University of Technology, and he plans to
continue his studies on the new M.Sc.
programme.
Gerstner’s academic career began
in Germany at the University of Karlsruhe, where he read mechanical engineering. After a couple of years he
transferred to the University of Darmstadt department of paper technology,
where he also created software for
measurements in paper technology.
He came to Finland through the Eras- »
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Sivu 24
began studying paper technology. Finland is a world leader in R&D for this
sector. This brought together my studies and my interest in the country in
general.”
Both Hanna and Philip spend a lot
of their time attending lectures and
engaged in laboratory work. The latter
involves writing reports of between 10
and 30 pages. The students also work
in teams, which gives them a good
chance to get to know one another.
Most of Philip’s classmates are also
foreigners in Finland.
GETTING TO KNOW THE MILLS
Visits to paper mills in various parts of
Finland form part of the study programme. These visits generally involve a presentation of the company’s
operations by the hosts and a chance
STUDIES CONSIST OF LECTURES AND LABORATORY
PRACTICALS. THERE ARE ALSO OPPORTUNITIES TO VISIT
PAPER MILLS IN VARIOUS PARTS OF FINLAND.
mus academic exchange programme
last autumn.
Philip explains that he took an interest in the paper industry, because
the sector is diverse and involves
working with very familiar products.
“I like working in a field where you
can see the concrete results of your
work. My friends were amused at my
choice of studies, but I think paper
technology is needlessly underrated
in Germany.”
INTERNATIONAL INTERACTION
So what brings a young German, who
had never even visited the Nordic
countries before, to study in a place
like Finland?
Philip explains that even at school
he had an interest in Finland as a remote, sparsely populated land offering endless spectacular scenery.
“A further stimulus came when I
26 Kemira 2/2005
to look over the machinery and operating arrangements at the mill. The
students are also encouraged to express their views on how to improve
production and clear any bottlenecks
in mill processes.
With his classmates, Gerstner has
spent some of his spare time making
excursions around Finland. He has also taken an interest more generally in
northern Europe. His travels have already taken him all the way to Ivalo in
northern Lapland, to Turku Castle in
south-west Finland, and to the Russian
city of St. Petersburg just over the
Finnish border to the south-east. Gerstner is also eagerly awaiting the start
of a summer job in the Metsä-Botnia
mill in the northern Finnish town of
Kemi:
“It will be a good base for trips to
Lapland, Sweden and Norway. I’m
sure there will be plenty to see.”
■
TRAINING PROGRESSES
THROUGH
CO-OPERATION
The Department of Forest Products
Technology at Helsinki University of
Technology is developing an international training programme that
includes an International M.Sc.
programme in Forest Products
Technology. This project is a joint
undertaking of the Finnish forest industry, the forest cluster, the Ministry of Education and Helsinki University of Technology.
The international training programme seeks to provide a high standard
of international instruction in the
chemical and wood products
sectors, together with both undergraduate and doctoral degree
programmes. The Department’s Finnish undergraduates complete their
advanced studies together with the
foreign students on the M.Sc.
programme. They are also encouraged to participate in international
student exchange programmes and
to take up trainee positions abroad.
The Department’s Finnish and foreign M.Sc. graduates are thereby
ideally qualified to work in international and multicultural organisations.
Input from the business community
was considerable, even during the
initial development of this training
programme. Kemira was involved in
financing the project and in its monitoring group. This investment now
enables the company to include the
Helsinki University of Technology international programme when planning further training for its employees around the world.
For further details of the
programme contact Katja Hakala,
tel. +358 9 451 3247,
katja.hakala@tkk.fi
812859.qxd
6.6.2005
10:37
Sivu 27
The present wave of construction projects in Ukraine is part of a major initiative
to develop the country under the leadership of President Viktor Jushtshenko.
Kemira’s Tikkurila
gains firm foothold in Ukraine
Paint consumption is forecast to increase rapidly in
Ukraine as the national economy grows. Thanks to a
good distribution network
and highly regarded brands,
Tikkurila products are well
placed competitively.
BY JORMA LEPPÄNEN
PHOTOS BY LEHTIKUVA AND TIKKKURILA
T
hree Ukrainian importers purchase Tikkurila products for distribution to more than 20 retail
sales outlets around the country.
These importers also serve as wholesalers, selling Tikkurila products to
retail chains. This means that these
products are very well positioned to
increase their market share.
“Competition in the Ukrainian
paint market is growing fiercer all the
time. Powerful businesses from several countries, including Russia, Poland
and Germany, have established a
presence in this market. Tikkurila’s
decorative paints entered the Ukrainian market in 1993, and our market
share has already exceeded ten per
cent,” explains Mila Käkelä, who is responsible for Tikkurila sales in
Ukraine, Belarus and Moldova.
The growth potential is quite clear
from the fact that annual consumption
of construction paints in this country
of more than 47 million people is well
under five litres per person. The total
consumption of paints (industrial coatings included) in the Nordic countries
is nearly 20 litres.
CONTROLLING INTEREST
IN A LOCAL PRODUCER
“Consumption is forecast to increase
in all product groups. Last year we
strengthened our range by purchasing
a 51 per cent interest in the Ukrainian »
2/2005 Kemira 27
812859.qxd
6.6.2005
10:37
Sivu 28
company Kolorit Paints, thereby ensuring that we could offer products in almost all segments,” Käkelä explains.
The Kolorit Paints factory in Kiev
manufactures water-borne paints and
lacquers. Käkelä says that this brand is
well known, particularly among professional painters.
“Kolorit Paints opened up new future
distribution channels for Tikkurila products, with about 50 retail outlets. It’s also
worth noting that at the end of last year
the enterprise acquired 12 tinting ma-
chines, which were installed in outlets of the Budmax store chain in
various provinces of the country.
Use of tinting technology in the
marketing of paints is a specialist
competence of Tikkurila.”
APPRECIATED BRANDS
Tikkurila sells products under
four brand names in Ukraine:
with Tikkurila and Beckers at
the top end of the market and
Vivacolor and Kolorit competing for the more budget-conscious segment.
“We are working hard to
make our products better
known to the consumer. This
year we took our Tikkurila,
Vivacolor
and
Kolorit
brands to trade fairs,
where they were very enthusiastically received.
We are also launching
a major campaign that
will include televi-
sion and billboard advertising.”
Käkelä says that Ukrainians
strongly associate Finland and
Tikkurila with high quality.
“Tell any Kiev taxi driver that you
are from Finland and he’ll probably
say something about Tikkurila paints.
People know our brands and have a
high opinion of them.”
CONSTRUCTION SECTOR
GROWING FAST
Käkelä says that demand for construction services in Ukraine has increased considerably since the national economy turned the corner
at the beginning of the new century.
We are expecting the growth in
construction services to continue,
particularly in residential and office construction. There are only
about 70,000 square metres of
office space in the country
meeting Western standards,
but experts assess the actual
need for such space at
about 800,000 square metres. The current hotel
stock also fails to meet international quality standards.
While not forgetting
its Slavic heritage,
Ukraine is now
looking more to
the West for
new patterns
to adopt.
28 Kemira 2/2005
812859.qxd
6.6.2005
10:37
Sivu 29
Ukraine has only
about 70,000 square
metres of office
space that is up to
Western standards.
The demand is for
about 800,000
square metres.
Demand will also continue for
products meeting Western quality
standards for use in building renovation.
“Extensive renovation work is expected in Kiev and other large cities
over the next few years, and this will
mean growing demand for Tikkurila
paints and coatings, which have a reputation for quality.”
LOCAL PARTNERS ARE AN
ASSET IN RISK MANAGEMENT.
ALL EYES ON EUROPE
The wave of construction and building
renovation currently beginning in
Ukraine is part of a much broader
project to take the country into Europe under the leadership of its new
President Viktor Jushtshenko. How is
Jushtshenko’s political renovation getting on?
When taking to the streets in massive numbers to mark the handover of
power at the end of last year, ordinary
Ukrainians demonstrated their wish
to move the country towards Western
democratic ideals. President Jusht-
shenko has announced that he will
work to ensure respect for the law and
for the rights of citizens. Securing
rights of ownership and protecting investment are also part of his programme.
Käkelä believes that Jushtshenko’s
policies will improve operating conditions for businesses and ensure fair
competition. It will take time to realise
these reforms, however.
“The early months following the
handover of power have naturally
been a time of uncertainty and anticipation for us as well. Fortunately, we
have excellent partners who are familiar with conditions in Ukraine and
keep us informed of any changes in
things like customs regulations and
legislation. We are also indebted to the
local Finpro Finland Trade Centre for
its valuable assistance.”
Käkelä stresses that risk management in a developing country like
Ukraine is largely a matter of selecting the right partners.
“It is important to monitor all risk
factors involved in the value chain.
Our local partners know the operating
environment well and can help us in
risk management.”
■
EUROPE’S FASTEST
GROWING ECONOMY
The Ukrainian economy has grown
at an annual average of 8.4 per
cent over the last five years. This
progress is expected to continue
during the term of office of President Viktor Jushtshenko, who has
instituted a programme of Western democratic reforms.
Ukraine is the largest country in
Europe, and has a population of
47.5 million people. 70 per cent of
the land is cultivated and labour
costs are among the lowest in Europe. Businesses have been growing at a rate of well over 10 per
cent annually in many industries.
The robust industrial potential
and rapidly growing market in Ukraine have also attracted many foreign businesses, and foreign investment is forecast to grow substantially over the next few years.
Source: Finpro
2/2005 Kemira 29
811613.qxd
6.6.2005
10:38
Sivu 2
interim report 1–3/2005
KEMIRA'S FIRST QUARTER WAS STRONG, OPERATING PROFIT UP 43%
K
emira’s operating profit for January-March
was up 43% to EUR
30.3 million (2004: 21.2 million). All four business areas
improved their operating profit. Operating profit was boosted above all by higher sales
volumes and the acquisitions
that were made. The Kemira
Group’s full-year revenue, operating profit and earnings per
share in 2005 are forecast to
increase on the pro forma figures posted in 2004.
Kemira Group’s revenue in
January-March 2005 was up
2% on the same period of last
year to EUR 403.7 million
(2004: 394.4 million). Apart
from organic growth, the
higher
business
volume
stemmed from the acquisitions made in 2004 in the pulp
and paper chemicals business
and in water treatment chemicals.
A total of EUR 9.7 million
(9.6 million), or 2.4% of revenue, was spent on research
and development.
The Pulp & Paper Chemicals business area reported an
increase in revenue of 5% to
EUR 143.1 million. Operating
profit rose 9% to EUR 11.6
million.
Kemwater’s revenue was
up 31% to EUR 82.8 million
and operating profit was up
33% to EUR 6.4 million.
The Industrial Chemicals
business area reported a rise
in revenue of 12% to EUR 79.0
million and operating profit
was up 82% to EUR 7.7 million.
The Paints & Coatings unit
had revenue in January-March
of EUR 99.1 million. Operating
profit rose by 5% on last year
and was EUR 8.4 million.
Within pulp and paper
chemicals, the customer industry has been operating at a
good rate in the first part of
the year and it is forecast to
hold up well during the latter
part of the year. Increased
prices for raw materials used
by the Pulp & Paper Chemicals
business area are putting
pressure on earnings. Thanks
to the acquisition of Finnish
Chemicals, the business area’s
revenue and operating profit
in 2005 are set to increase on
2004.
Demand for water treatment chemicals is expected to
improve further. Price increases in iron, hydrochloric acid
and aluminium hydrate are
exerting pressure on earnings.
Kemwater’s full-year revenue
is expected to grow substantially on 2004 thanks to the
Eaglebrook acquisition that
was made in North America.
Operating profit is likewise
forecast to be higher than that
reported in 2004.
Industrial Chemicals is expecting to see a continued
gradual rise in the price of titanium dioxide, offsetting the
higher prices of raw materials.
Thanks to the expansion in-
vestments made, full-year
sales volumes in titanium
dioxide are forecast to be
higher than they were in
2004. The business area’s
sales of formic acid and sodium percarbonate, which is
used in detergents, are
also expected to develop
favourably in the latter part of
the year. Full-year revenue is
forecast to show an increase
on the figure that Industrial
Chemicals reported for contin-
uing operations in 2004. The
acquisition of Verdugt BV
should contribute to an increase in operating profit compared with 2004.
Good demand is expected
in the paints business in the
latter part of the year. Because
some units were sold during
2004, full-year revenue for the
Paints & Coatings business
area is forecast to be at the
level of 2004, but operating
profit is expected to rise.
■
KEY FIGURES FOR Q1
EUR million
1–3/
2005
1–3/
2004*
REVENUE
403.7
394.4
2
EBITDA
57.0
50.7
12
232.0
EBITDA, %
14.1%
12.9%
OPERATING PROFIT
30.3
21.2
43
111.6
5.4%
-
6.6%
Operating profit, %
7.5%
Change
%
1–12/
2004*
1,695.1
13.7%
Financial income
and expenses
PROFIT BEFORE TAX
-3.4
-7.2
-
-12.6
12.0
123
95.3
243
63.8
-
0.50
1,267.7
-
1,252.5
9.4%
7.7%
-
8.6%
-43.5
-20.4
-
107.6
26.7
PROFIT FROM CONTINUING
OPERATIONS
19.2
5.6
Earnings per share, EUR
0.15
0.04
Capital employed **
1,245.1
Return on capital
employed, % **
Cash flow after capital
expenditures
* Continuing operations, pro forma
** 12-month rolling average
All forecasts and estimates mentioned in this report are based
on the judgement of the economic environment as of May 9,
2005 and the actual results may be significantly different.
Source: Kemira
30 Kemira 2/2004
811613.qxd
6.6.2005
10:38
Sivu 3
facts about Kemira
FINANCIAL INFORMATION FOR 2005
■ Leading player in North and East Europe with strong local
brands (Tikkurila, Alcro, Beckers, Vivacolor, etc.)
■ Revenue 2004: 440 MEUR
■ Leading market positions in decorative paints:
■ Finland
No 1*
■ Sweden
No 1
■ Baltic
No 1*
■ Poland
No 3
■ Russia
Best-known brand
*and in industrial paints
28 Jul.
at 9.00 hrs, interim report
January–June
2 Nov.
at 9.00 hrs, interim report
January–September
PAINT CONSUMPTION
IN EUROPE BY AREA
SALES BY AREA
Eastern
Europe
33 %
Kemira plans to publish financial
information for 2005 as follows:
facts
Paints & Coatings
Other
1%
Sweden
31 %
20 litres/person
Other
Western
Europe
12 %
10 litres/person
Finland
23 %
5 litres/person
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2/2004 Kemira 31