Investing in Plantations. Stora Enso s Experiencies

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Kory Burke
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1 Investing in Plantations Stora Enso s Experiencies

Stora Enso in Brief Paper Packaging Boards

7 million tonnes of paper and board 1570 7.

products 740 Three core product areas Paper,

2 Stora Enso in Brief Paper Packaging Boards Forest Products Production capacities 15.7 million tonnes of paper and board million m 3 of sawn and processed wood products 740 Three core product areas Paper, Packaging Boards and Forest Products Sales: EUR 12.2 billion 122 Approximately employees in 40 countries Market capitalisation: EUR 8.9billion 89 Shares listed on Helsinki, Stockholm and New York stock exchanges 2

Leading Producers Paper and Board, July 2004 20047 Stora Enso International Paper UPM-Kymmene Oji Corporate Georgia-Pacific Corp. Weyerhaeuser Corp.

3 Leading Producers Paper and Board, July Stora Enso International Paper UPM-Kymmene Oji Corporate Georgia-Pacific Corp. Weyerhaeuser Corp. Nippon Unipac Holding Smurfit-Stone Container Corp. Abitibi-Consolidated SCA 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Capacity in tonnes Source: Jaakko Pöyry Consulting 3

4 Sustainability in Stora Enso Mission : Vision Values : Policy : Our products promote well-being We take the lead Responsibility Environmental and Social Responsibility CSR Principles Environmental Principles Financial Sustainability Environmental Social Accountability: Transparency, Stakeholder dialogue Company strategy: Stora Enso wants to achieve operational excellence, superior performance and image in sustainability and social responsibility. 4

/ISO14001 Stora Enso has been included since the launch in 1999 (six times

5 Feedback from the market Dow Jones Sustainability Index 100% of Stora Enso s pulp, paper and board capacity is covered by EMAS and/or ISO /ISO14001 Stora Enso has been included since the launch in 1999 (six times now) 1999 FTSE4Good index Index series for socially responsible investors 5

Stora Enso in China Paper production and converting Sales network covering whole country Sales of 600.

6 Stora Enso in China Paper production and converting Sales network covering whole country Sales of tonnes with value of USD 400 million 604 Asian Pacific Head Office in Shanghai Plantation project in Guangxi Target to establish an integrated pulp and paper/board production 6

7 Experiences in Guangxi Land available for industrial-scale operations Soil and suitable terrain Relative flat Good infrastructure Good co-operation with local Government and Forest Bureaus Opportunities to increase growth rates 7

8 Challenges in Plantation Management Land availability Collectives are reluctant to rent out land use rights Sense of security having own land rather than receiving rental income Day to day living is more important than long term benefits Worried not to receive rental income as promised Land ownership and usage rights are not clear in all the cases Certain plot of land are not viable for higher yield plantations 8

9 Challenges in Plantation Management Different expectations regarding speed of the process Sustainable and fast-yielding plantation management needs time Well implemented preparations and practices enable higher growth rates and require less land Solid fibre base is a crucial condition for a successful pulp and paper making Needs patience from local Governments in order to achieve long term success 9

How to proceed Discussions with farmers and collectives in order to set common goals Establish new models in order to anchor the company into local community Provide fund for promoting well-being of

10 How to proceed Discussions with farmers and collectives in order to set common goals Establish new models in order to anchor the company into local community Provide fund for promoting well-being of local people in the area of infrastructure, education level, health and sanitation etc. Cooperation with international independent organizations in analysing environmental and social impacts of integrated forest-pulp-paper project in Guangxi Continuous co-operation with local Governments to jointly develop sustainable and viable approach for both plantations and industry 10

Win Win Stora Enso can provide Know-how based on experiences in forestry since 1870 s 1970 Forestry development in Europe and Latin- and North America, Africa and several Asian countries such as

11 Win Win Stora Enso can provide Know-how based on experiences in forestry since 1870 s 1970 Forestry development in Europe and Latin- and North America, Africa and several Asian countries such as Indonesia, Thailand and Laos Latest methods for growing seedlings, planting and cultivation Continuous Research and Development work Sustainable methods from plantations to pulp and paper making Support Central Government s target to increase plantations as fibre resource in China 11

12 Actual Net Growth of Plantations Actual net growth of forests falls behind their potential growth in all parts of the world. 60 Net growth, m3/ha/a 40 Stora Enso actual 20 0 Brazil (Eucalyptus) New Zealand (Pine) Indonesia (Acacia) Source: Jaakko Poyry, Stora Enso China (Eucalyptus) 12

13 13

14 Attachment 1 1 Growing Stock on Forest Area Available for Wood Supply 1 North America, Europe and Russia have most (85%) of the available softwood stock, while the hardwood stock is concentrated in Latin America, Africa and Southeast Asia Refers to growing stock in closed forest area in Latin America, Africa, Asia (excluding Japan and China) Total 300 billion m3 Softwood 102 Hardwood

Attachment 2 2 Stora Enso s EMAS approach Stora Enso is a forerunner in the forest industry in EMAS (Eco-Management and Audit Scheme) registration ) 100% of Stora Enso s pulp, paper and board

15 Attachment 2 2 Stora Enso s EMAS approach Stora Enso is a forerunner in the forest industry in EMAS (Eco-Management and Audit Scheme) registration ) 100% of Stora Enso s pulp, paper and board capacity is covered by EMAS and/or ISO / ISO14001 Also all Nordic sawmills and wood procurement in Finland, Sweden and Russia have been EMAS registered EMAS allows Stora Enso to focus on most relevant issues in each production location 15

16 Attachment 3 3 Sustainability Indexes Dow Jones Sustainability Index Stora Enso has been included since the launch in 1999 (six times now) 1999 Tracks the performance of leading sustainability-driven companies worldwide FTSE4Good index Index series for socially responsible investors Assesses achievements in: upholding and supporting universal human rights developing positive relationships with stakeholders working towards environmental sustainability 16

Pulp Industry Expansion and New Wood Fibre Demand in Southern China - Implications for the Region -

Pulp Industry Expansion and New Wood Fibre Demand in Southern China - Implications for the Region - Christian Cossalter CIFOR The Future of Forests in East Asia and China 7 8 October 2004 Kuala Lumpur,