competitive advantage and growth through innovation · 2018-09-10 · competitive advantage,...

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COMPETITIVE ADVANTAGE AND GROWTH THROUGH INNOVATION Jyrki Ovaska EVP, Technology

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COMPETITIVE

ADVANTAGE AND

GROWTH THROUGH

INNOVATION

Jyrki Ovaska

EVP, Technology

| © UPM

What do we mean by innovations at UPM?

• Target: to find & develop new business

opportunities and enhance existing businesses

• Innovation is an idea that translates

into business value for UPM

– Business model

– Service concept

– Product / product enhancement

– Business

– Technology & process

– New way of operating

2

UPM

Innovation

Management

Current,

mature

businesses

Current

growth

businesses

New

businesses

| © UPM

Innovation needs differ,

but it is a must in all UPM businesses

3

New products

Go-to-market concept

Cost savings

Cost savings

New services

New business modelsMature

Growth

New

New products

New technologies

Application development

Commercialisation

| © UPM

Product innovations in new

and existing businesses

4

| © UPM

Digital innovations offer a new opportunity

to transform existing businesses

5

New products

Go-to-market concept

Cost savings

Cost savings

New services

New business modelsMature

Growth

New

New products

New technologies

Application development

Commercialisation

Digital

opportunities

Digital

opportunities

| © UPM6

Technology

HW & SW

Digitali-

sation+ + =

Monetize Extend

Optimise Control

Analytics

Data

Small & big

Traditional

& IoT

| © UPM

Digitalization and IoT

Why to be interested?

• New competitive advantage

that is hard to copy

• Better customer / user satisfaction

with lower costs to serve

• Disrupt industry practices

and our own ways of working

• Next steps in cost competitiveness

• Frontrunners will define the rules

of the game

7

| © UPM

Our planet has to provide increasingly

more wellbeing to more people

8

Population

growth

Urbanization

Climate

change

Resource

scarcity

Aging

population

Higher

living standards

SUSTAINABLE BIOALTERNATIVES

& NEW BIOINNOVATIONS

| © UPM

Consumer brand owners continue to drive

renewables and green initiatives

9

| © UPM

Wood is a unique and excellent raw material

for mitigation of global challenges

10

SUSTAINABLE

VERSATILE

RENEWABLE NON-FOOD

NON-GMORECYCLABLE COMPETITIVE

LOW MARKET VOLATILITY

| © UPM

New business opportunities for UPM

11

• Auxiliary for

pharma R&D

• Industrial

Applications

• Performance

chemical

• New applications

• New material

• End-user product

• High volume products

• Economies of scale

• Drop-in applications

Biofuels

Biofibrils

Biocomposites

Lignin

Biochemicals

Biorefinery

Chemicals

Biorefinery

Chemicals

Market entry100 kt renewable diesel 2 prod. sites

| © UPM

New separation technologies ensure

best overall value capture

12

Woody Biomass

Glucose

Xylose

Lignin

Wood-to-Sugar-Process Sugar-to-Chemical-Process

Chemical A

Chemical B

| © UPM

Partial overlap with fossil-based

value chains in chemicals

13

Pe

tro

ch

em

ica

l fe

ed

sto

cks

Oil

Gas

Coal

C2: Ethylene

C3: Propylene

C6: Benzene

C7: Toluene

C8: Xylene

C1: Syngas

C4: Butadiene

Key IntermediatesFeedstocks

Chemical

Building Blocks Final products

BiomassC5 Xylose

C6 Glucose10 Mtons

Refinery

Cracker

Coal-to-

olefins

600 Mtons

| © UPM

Diversified chemicals markets

offer many opportunities

14

TYPICAL APPLICATIONS FOR BIOCHEMICALS

PLASTICS

ADHESIVES

FOOD

FIBERS

COSMETICS

AGRICULTURE

PAINTS

INDUSTRIES

+++

COATINGS

MANY OTHERS

| © UPM

Why UPM and biochemicals ?

15

Access to and management

of 2G-biomass

Biomass conversion

processesRun sustainably large

industrial processes

Bioenergy &

Infrastructure

- Biomass boilers

- CHP

- Water treatment

Chemical

processes

- Kraft pulping

- Biodiesel

production

Biomass

handling

- Debarking

- Saw mills

- Mechanical

pulping

| © UPM

REALITY: phenol in resins replaced

by renewable UPM biochemicals

16

Carbon Fibers

Epoxides

PF Resins

Dispersants

Pellets

BioplasticsPolyurethanes

Mo

dif

icati

on

Pro

cess

Mo

dif

icati

on

Pro

cess

UPM Lignin

Insulation

Plywood

Laminates

| © UPM

REALITY: UPM biomedicals enabling

development of new medical treatments

17

3D Cell Culturing Matrix for e.g. Cancer Research

Membranes for e.g. Wound Care Applications

cellulose based hydrogel

for life science applications

| © UPM

Summary

18

• Innovations accelerate transformation, drive

competitive advantage, top-line growth and new

business opportunities

• UPM is in unique position to provide mitigating

solutions for global challenges

• Biochemicals provide large market potential.

UPM is in good position to capture value through

focused growth investments

• Major studies for novel technologies have been

going on for 5 years

| © UPM19

Redefining the industry

| © UPM