What quality do the reprocessors expect? Craig Robinson Head of RCP Sourcing – UK & Ireland UPM Shotton

Summary UPM overview What is quality? UPM specification Quality inspection methodology Quality statistics/trends Impact of low quality Costs of low quality What do we want MRF operators to do?

UPM One of the world's leading forest industry groups and number one in printing papers. Main businesses are magazine papers, newsprint, fine and speciality papers, self-adhesive label materials and wood products. In recent years, UPM has strongly developed new business opportunities including RFID tags and inlays, wood plastic composites and bio-fuels.

UPM Changshu Blandin PAPER MARKETS UPM - Paper and pulp mills in the world Kajaani Kaukas (also pulp) Kymi(also pulp) Pietarsaari (also pulp) Jämsäkoski Kaipola Tervasaari (also pulp) Rauma Augsburg Caledonian Shotton Chapelle Docelles Stracel Steyremühl Schwedt Nordland Schongau

Top Deinkers in the World - December 2008 Source: Pöyry, UPM White Birch Paper Myllykoski Oji Georgia-Pacific SCA Stora Enso Norske Skog Nippon Paper Group AbitibiBowater UPM '000 tons

UPM Shotton – RCP Sourcing Consume 640,000 tonnes/year of recovered paper (12,500 tonnes/week average) Pre-consumer  Over-Issue News  Over-Issue PAMs (periodicals & magazines)  Customer press room waste Post-consumer  News & PAMs  sourced from Local Authorities, merchants, waste management companies, and community groups across the UK & Ireland

What is quality? It's not just about the product Quality is now a prerequisite, not a market differentiator A customer's expectation is to buy a high quality product at the lowest cost Customer expectations are continuously increasing It is vital for all stakeholders to effectively manage their position in the whole supply chain Under any market conditions, quality will always sell

UPM Shotton – News & PAMs specification summary Optimum newsprint/magazine content <6 months old Dry (<12.5% moisture content) Max 10% white office paper <4% grey/white board <1% brown board <1% non-pulpable Source Segregation Mixed Paper/Board Co-mingled

UPM Shotton – RCP quality inspection UPM Shotton inspects loose inbound deliveries using INGEDE Method No.7 – Entry inspection for sorted graphic paper for deinking 1.11 This method assesses the following criteria:  general condition  odour  mould and decomposition  moisture  age  paper composition  contamination composition

UPM Shotton – RCP quality inspection This method utilises the following tools:  Visual check (target - 100% of loads)  30m 2 of surface area only  Gravimetric check (target - 10% of loads)  45kg random weight sample used as a calibration for the visual check Since January 2006, we have completed:  37,467 visual checks  2,700 gravimetric checks

Quality statistics/trends

Impact of low quality Increased production variable cost Increased disposal cost Increased maintenance cost Reduced service life of capital equipment Reduced mill yield Reduced mill production efficiency Reduced competitiveness of UK manufacturing in a global market place

Costs of low quality 2008 non-pulpable contamination cost elements:  raw material  logistics  handling  storage  processing  chemical/water usage  yield loss  waste management  disposal  taxation 10,000 tonnes = £2.05m

What do we want MRF operators to do? Engage with reprocessors during MRF design phase Invest in the right technology Align process to collection systems Inspect input/output quality and communicate the results Enforce input quality contractual conditions Have a customer focus throughout the organisation Adopt continuous improvement principles Adhere to maintenance schedules Re-invest/replace as required Do not run above optimisation capacity Protect your product

Thank you Craig Robinson