| © UPM1

2016

UPM – THE BIOFORE COMPANY

SPECIALTY PAPERS

| © UPM3

Welcome!

Safety first.

Changshu mill emergency number is

5110 or +86 512 5229 5002

Please take the time

to read the safety

instructions given

to you

Keep your visitor

badge visible

Stay with your

host and follow

instructions

Mind the steps,

hold onto the

railings

Smoking, alcohol and other

intoxicating substances are

prohibited on the premises

Photography, videotaping

and recording are prohibited

without a written permission

Wear the required

Personal Protective

Equipment in all

instructed areas.

| © UPM4

UPM – The Biofore Company

When we at UPM look into the forest, this is what we see:

• A future where wood is used innovatively and

efficiently.

• A world where bio and forest industries are integrated

to create new high quality alternatives to non-

renewable materials.

• Profitably and responsibly.

| © UPM5

UPM today

UPM Biochemicals

• Chemical building blocks• Lignin products• Biofibrils• Biomedical products

UPM Biocomposites

• UPM ProFi• UPM Formi

UPM Raflatac

• Label materialsfor product and informationlabelling

UPM Specialty Papers

• Fine papersin China and APAC

• Labelling materials globally

UPM Energy

• Hydro-, nuclear- and condensing power(incl. shares in energycompanies)

• Electricity productionand trading

UPM Biorefinig

• Pulp

• Plantations

• Biofuels

• Sawmills

• Wood Sourcingand Forestry

UPM Plywood

• Plywood andveneer products

UPM Paper ENA

• Magazine papers, newsprint and fine papers for variousend-uses

Sales 2015:

EUR 10.1 billion

Personnel:

19,600

Shareholders:

approx. 85,000

UPM SPECIALTY PAPERS

| © UPM7

UPM Specialty Papers

• Global market leadership in labelling materials, focusing on high quality

release liners, face papers and flexible packaging papers.

• High quality fine papers in Asia Pacific with extensive distribution

network.

• The leading woodfree copy paper producer in China, strong market

position with own copy paper brands.

www.upmpaper.com

The products of all three production units can be

sold either as FSC® or PEFC™ certified.

One of the first members in the WWF China

Sustainable Paper Alliance promoting responsible

fibre sourcing and sustainable paper on the Chinese

market.

| © UPM

UPM Specialty Papers business area

MillCapacity

Million t/aProduct

Changshu 1.4

• Woodfree Fine

• Release liner

• Speciality

Tervasaari 0.3 • Release liner

Jämsänkoski 0.3• Label papers

• Packaging papers

• Global market leader in labelling

materials

• Leading position in quality copy

papers in China

• High quality fine papers in Asia

Pacific

Paper Mill

8

| © UPM

Specialty Papers Sales in 2015

1,168 MEUR

China 26%

APAC Other 33%

Central Europe

17%

North Europe

12%

South Europe

3% US9%

Fine 55%

Spec45%

By market By Products

9

| © UPM2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

UPM China

Company

established

1998

PCC plant

started up at

Changshu Mill

2015

UPM Australia office

1974

UPM Japan office

1980

UPM Singapore office

1990

UPM Hongkong office

1996

UPM Korea office

2002

10

UPM has a long term commitment to Asia Pacific

Changshu Mill

PM1 started up

2005

Changshu Mill

15-pocket

Cutsize line

started up

2005

Raflatac

Changshu

Factory started

production

2007

R&D Center

established

2007

APAC Supply

Chain Centre

in Changshu

2008

Changshu Mill

8-pocket Cutsize

line started up

2012

PM 3 Project

launched

2012

Total Investment in China exceeds USD 2 billion

Changshu Mill

PM3 start-up

2015

Changshu Mill

8-pocket Cutsize

line started up

2015

| © UPM

Specialty Papers products

Printing papers• Magazines

• Catalogues

• Newspapers

• Direct mailing

• Advertising materials

• Commercial form Printing

Office papers• Copy

• Laser

• Inkjet

• Fax

Label papers• Self-adhesive

labelstock

• Conventional

labeling

• Siliconizing

Packaging papers• Flexible packaging

• Food packaging

• Other industrial

converting

11

FINE AND SPECIALTY PAPERS, APAC

| © UPM

APAC Sales in 2015 (excl. Label Papers)

641 MEUR

Australia10%

China47%

Hong Kong10%

Japan16%

Korea6%

Singapore8%

OS4%

WFU cutsize

54%

WFU folio13%

WFU reels13%

WFC folio8%

WFC reels12%

By market By Products

13

| © UPM

Fine and Specialty Papers, APAC

7 Regional warehouses in China

9 Sales Offices

JapanKorea

Beijing

Changshu

ShanghaiWuhan

Chengdu

Guangzhou

Hong Kong

Singapore

Australia

New Zealand

Chongqing

1 Paper Mill

Personnel 1,285

Capacity 1.4 million t/a

Production site Changshu mill

Production unit PM1, PM2, PM3

Products

WFU, WFC, WFU

Spec, Office paper,

Labelling material

14

| © UPM

Sales network of Asia Pacific

Korea

Japan

Taiwan

Singapore

Australia

Main export area

UPM sales offices in Asia Pacific

Changshu

Europe

Middle East & Others

New Zealand

SEA

N.A.

Russia

15

| © UPM16

Extensive network in Greater China

UPM Changshu Site

Paper mill

Labelstock factory

Asia R&D centre

APAC Supply Chain Centre

5 Sales offices

7 Distribution

warehouses

2 Label material

terminals

WuhanChongqing

Chengdu

Changshu

Shanghai

GuangzhouHong Kong

Beijing

Tianjin

Shenzhen

| © UPM

UPM Asia

R&D Centre

PM 1 PM 2

Effluent treatment facility

Power Plant

Jetty

17

PM 3

Changshu Mill Site

Pulp storageUPM Raflatac

Container yard

Converting

APAC Supply Chain Centre

PCC Plant

Finishedgoods storage

| © UPM

Changshu Mill Production

18

PM 1 facts and figures• Start - up of PM1 in 2005

• Width: 9.70 m

• Designed speed: 2,000 m/min

• Capacity: 450,000 t/a WFU

PM 2 facts and figures• Start - up of PM2 in 1999

• Width: 8.66 m

• Designed speed: 1,500 m/min

• Capacity: 350,000 t/a WFC and WFU

| © UPM19

Changshu Mill Production

PM3 facts and figures

Biggest investment in UPM group in 2014-2015

4.5 million working hours with no accidents of lost time during the whole project time

2/3 of the investment value was delivered from China

“Swing-concept” makes it possible to switch between different grads.

State-of-the-art technology allowing consistent quality for a wide range of products

• Width: 7.5 m

• Speed: 1,600 m/min

• Capacity:600,000 t/a

• Product: WFU & labelling material & specialty paper

| © UPM

Infrastructure

20

• Capacity 100 MW

• Efficient co-generation

• Connected to National Grid in July 2004

• Environmental Investment over RMB 450

million

• Waste water and air emissions were

measured by on-line meters, and the

measurement signals were connected to

the authorities’ monitoring rooms

• 11, 500 DWT multi purpose cargo

• 3,000 DWT bulk cargo

Power

Plant

Environmen

- tal

Protection

Harbour

& Jetty

| © UPM

Excellent Print

UPM Jetset Yes UPM Office Horizon

UPM Copykid Future SOHO

Changshu Products - office papers in China

Brand Families

21

Specialty Papers ENA

| © UPM

Label Sales in 2015

527 MEUR

C1S43%

Glassine 57%

By market By Products

APAC12%

Central Europe

39%North Europe

23%

South Europe

7%

US19%

23

| © UPM

UPM Specialty Papers ENA

• The world’s leading producer in label papers with release base papers and label face papers.

• In packaging papers UPM is concentrating on C1S papers and barrier papers

• Customers:

– paper converters and printers

• Main end uses:

– self-adhesive labels and release liners

– barrier papers & flexible packaging

– boutique bags

24

| © UPM

UPM Specialty Papers ENA

Production Units - Tervasaari

* FSC ® and PEFC™ on request but subject to availability

Facts and Figures

• Production lines: PM5 and PM8

• Products: Release base papers

• Total capacity: 300,000 t/a

• Grammage: 45-120 g/m2

Tervasaari

25

Certification

• Environmental and Quality

management system:

EMAS, ISO 14001, ISO 9001

• ISO 22000 in progress

| © UPM26

UPM Specialty Papers ENA

Production Units – Jämsänkoski

Facts and Figures

• Production lines: PM3 and PM4

• Products: C1S and barrier papers

• Total capacity: 300,000 t/a

• Grammage: 45-135 g/m2

* FSC ® and PEFC™ on request but subject to availability

Certification• Environmental and Quality

management system:

EMAS, ISO 14001, ISO 9001

• ISO 22 000 in progress

• Health and safety system: OHSAS

18001

| © UPM

Specialty Papers ENA Products

Packaging paper - UPM C1S Papers

• Chocolate wrapping

• Coffee wrapping

• Biscuits and other food wrapping

• soup pouches

• Gift wrap

• PET-bottle labels

Packaging paper - UPM Barrier Papers

• Bread bags

• Biscuit wrappings

• Greasy food wrappers

• Ream wraps

For labelling and siliconizing Product labeling

• VIP labeling

• PE-coated release liners

• Two-sided tapes

• Fanfolding and cutsize labels

• Self-adhesive graphic arts

27

ENVIRONMENT AND RESPONSIBILITY EXCELLENCE

| © UPM

UPM Environment and Responsibility Excellence

UPM is an industry leader in environmental performance in China and APAC

UPM has a wide range of environmentally certified papers in China and APAC

UPM paper is safe to use through its whole product lifecycle

UPM is committed to social responsibility with strong business ethics

29

| © UPM30

• United Nations Global Compact LEAD– world's top 50 sustainability leaders, the first forest industry company

• The Dow Jones Sustainability Indices– The best company in the environmental dimension within Paper &

Forest Products sector in the world, RobecoSAM Sustainability Award

Gold Class

• 100 most sustainable corporations in the world (Corporate Knights)– 25th, the only company in the Paper and Forest Products category

Industry-leading sustainability practices

| © UPM

Responsible management

31

Mills

Wood fibre

Raw Materials

Resources

Value-added

products

Responsible sourcing• Supplier Code

• Risk assessment

Mill Management Systems• ISO 9001

• ISO 14001

• OHSAS 18001

• EMAS

• FSC & PEFC Chain of Custody

Product stewardship• Product safety

• Eco-labels

• Product profile with

carbon footprint

| © UPM

Water

- 60%Per tonne of paper

Energy

- 25%Per tonne of paper

Waste to landfill

- 60%Per tonne of paper

Certified fibre

85%In 2015

Continuous improvement process at

UPM Changshu mill over the last 10 years

*2015 compared to 2005

COD in waste water

- 75%Per tonne of paper

SO2 Emission

- 90%Per tonne of paper

Water

we takeWater we

discharge

32

| © UPM

Responsibility is good business

Consistent approach attracts recognition

33

China National

Environmental friendly

Enterprise

ISO 14001

ISO 9001

China

Green Label

Singapore

Green Label

Third party recognition

as a sustainable company

Paper with the most reliable

environment quality