The answers you need – righT now - UPM Paper

UPM AP CUSTOMER MAGAZINE 2/2012
UPM FLASH
Cooperation in a Green way
The answers you need
– right now
www.upm.com

EDITORIAL
A new Chapter
for UPM!
Since its establishment in later 1990s, UPM was able to progressively
increase its footprint in the APAC region, investment in
few phases has allowed us to provide an expanded offering to our
customers in this dynamic territory. Today we are marking another major milestone in the development
of our Changshu operations. The decision to build a new paper machine at Changshu
mill in China will further strengthen our presence in the Asian paper market, especially in the
value chain of self-adhesive materials.
The new machine is designed with a swing capacity catering to the evolving demands: It is
capable of producing up to 360,000 tonnes of wood free uncoated grades or 170,000 tonnes
of uncoated high quality release base papers. The total investment is 3 billion CNY (390 million
EUR) and the machine is expected to be operational by the end of 2014. In addition, we are
finalising the construction of a 100,000 tonnes cut-size sheeting line, which will enhance our
deliverability and service capability in office paper grades in the region.
UPM FLASH
2/2012
UPM Flash is UPM Paper Business
Group’s customer magazine in Asia
Pacific region.
EDITORIAL BOARD: Lenny Zhong,
Vivian Wang, Jackie Bao, Mary Ma
EXECUTIVE EDITOR: Ada Qin (Chinese
Version), MOLI Design (Chinese
and English Version)
LAYOUT: MOLI Design
PAPER: UPM Finesse premium silk 250
g/m 2 (cover), UPM Finesse premium
silk 130g/m 2 (inside)
SUBSCRIPTION: fax 86 (21) 5292
8912 or email upm.flash@upm.com
Please email your feedback on Flash
magazine to: upm.flash@upm.com
UPM in-house magazine
We realize the promising outlook in both label and woodfree uncoated paper products. In this
challenging time of the global economy, it is crucial to place our focus in the high performing
market, leveraging our long standing global expertise and advanced solution in the self-adhesive
and release liner industry. Those experience will be very valuable for our local customers here
in Asia.
Given our extensive sales and logistic networks today in the region, we are well positioned
to support you with excellent service and high quality products. Our recently launched UPM
Customer Online tool also provides you the real time visibility of your supply chain information.
You are highly encouraged to utilize this web-based platform to track your order status 24/7.
As an environmental-friendly company, we take pride in our world leading environmental
performance in the paper mills, and our dedication to driving innovation and environmental
excellence has always been the foundation of our success.
UPM China & Asia-Pacific
Sales Network
Shanghai: 86 21 6288 1919
Korea: 82 2 723 0555
Hong Kong: 852 2527 0177
Singapore: 65 6838 7280
Japan: 81 3 5778 2660
Australia: 61 2 9334 5000
www.upm.com
We look forward to building upon our strong relationships in APAC as we enter the new chapter.
Jaakko Nikkila
Vice President, Sales
Asia Pacific
UPM Paper Business Group
2 / 2 . 2012 / UPM FLASH

CONTENTs
10
Drupa exhibition proved
that print has great potential
EDITORIAL 02
News 04
FEATURE STORY
The answers you need – right now 08
Drupa exhibition proved
that print has great potential 10
18
CUSTOMER STORY
Printing Pioneer 12
A leading variable information
specialty paper producer 15
CORPORATE RESPONSIBILITY
Cooperation in a Green way 18
TECHNOLOGY FRONTLINE
An introduction to dot of printing 20
08
MARKETING INFORMATION
Key Points of The 12th Five-Year Plan for
China Pulp and Paper Industry 22
PRODUCT & SERVICE 23
15
UPM FLASH / 2 . 2012 / 3

NEWS
UPM CEO Pesonen states confidence in UPM’s
growth businesses underlining importance of
solid margins in Europe
Jussi Pesonen, UPM’s President and CEO,
stated his confidence in the company’s growth
businesses during its Capital Markets Day in
London. He also underlined the importance
of improved margins in the mature European
businesses to maximize the cash flow of the
company.
“UPM’s growth businesses sales today exceed
EUR 4.0 billion and we have confidence
in further growth going forward. More than
50% of our sales will derive from these solid
performing growth businesses on latter half
of this decade,” said Pesonen.
Pesonen highlighted that since 2007, UPM’s
Energy, Pulp, Label and Asian Paper business
have grown by 40 % in the topline.
As future sources of top line growth, he identified
Paper in China, an expanding Pulp
business, continued Label expansion in the
emerging markets, biofuels and nuclear power
generation - where UPM has a significant holding
through the Finnish energy company TVO.
“Our first investment in biofuels will add a
totally new dimension to the business portfolio
and growth outlook,” said Pesonen. “In
the longer term, biocomposites, biofibrils and
biochemicals will also complement the business
portfolio.”
“While other businesses have grown, sales of
our mature Paper, Timber and Plywood businesses
have come down by 10 % since 2007.
However, these businesses have a pivotal role
in our growth strategy. We are expanding in
growth businesses with the cash flow generated
by the mature businesses. Improving
margins for strong cash flow and releasing
capital from our mature businesses is crucial.
To this end, further consolidation in the
industry is needed,” said Pesonen.
UPM grows in China and in the fast developing label materials segment
UPM takes further steps to reshape its business
portfolio and expands in profitable
growth businesses in Asia. The company will
increase its presence in the attractive Asian
paper segments and strengthen its position in
the label materials value chain by building a
new woodfree speciality paper machine at its
Changshu mill in China.
“This move is aligned with our strategic target
to have more than 50 % of our sales from
well performing growth businesses in the latter
part of the decade. It supports our growth
in China and provides an excellent platform
to strengthen partnerships with self-adhesive
labelstock customers and expand into new
end uses in Asia. It also supports the good
profitability of our growth businesses,” says
Jussi Pesonen, UPM’s President and CEO.
The new machine is an uncoated woodfree
speciality machine capable of producing up to
360,000 tonnes of uncoated woodfree grades
and high quality label papers. The machine
will start up by the end of 2014. The investment
will also include future-oriented infrastructure
investments in the Changshu site.
The total investment cost is CNY 3,000 million
(EUR 390 million). In addition, UPM
Changshu is finalising a 100,000 tonnes cutsize
sheeting line investment which strengthens
the Group’s leading position in office
paper grades in China.
Both label paper and uncoated woodfree papers
have a healthy demand outlook in Asia.
The annual growth of UPM’s label paper
mix is expected to be 8 % in Asia and 4 %
globally. In uncoated woodfree grades, UPM
focuses on high quality office paper, where
the Chinese market is expected to grow by
8 % annually.
4 / 2 . 2012 / UPM FLASH

UPM named “Most Innovative Company” at 2012 Ethical Corporation Awards
UPM has been awarded “Most Innovative
Company” at the 2012 Ethical Corporation
Awards held in London. UPM was highlighted
for its Eco Design approach and overall
sustainable thinking. UPM’s innovative approach
has seen new products created such
as the world’s first biodiesel manufactured
from wood raw material.
“Our focus on producing more with less is
a clear example of UPM as a forest industry
company is now creating tangible results
with bio composites, bio fuels and the use of
non-fossil fuel energy,” comments Hartmut
Wurster, Executive Vice President Technology
and responsible for new businesses and
environmental issues.
“The integration of the bio-based and forest
industries has created the Biofore vision the
foundation of our corporate responsibility.”
A spokesperson for Ethical Corporation
commented: “The judges commended UPM
for its commitment to creating innovative
materials for increased recyclability and
robustness.This is traditionally a very challenging
category and the judges commended
the effort of all entrants to demonstrate
genuine innovation in their sustainability
approach.”
UPM has brought to market several innovative
products recently including UPM ForMi
a composite material made from pulp fibres
from sustainably managed forests and
clean plastic polymers. It has also launched
the fuel of the future, UPM BioVerno, the
first wood-based biofuel. UPM aims to be a
major player in the production of advanced
transportation biofuels.
UPM plants thousands of trees with school children
UPM organises a global Plant a Tree Day
each year in spring and especially on May
22nd, the UN International Day for Biodiversity.
This year school children and other
stakeholders in Finland, the UK, Russia,
China, the US and Uruguay participated in
Plant a Tree events.
In Finland the school children and UPM
forest professionals plant trees together in
Pyhäjärvi, Nokia and Joroinen. UPM participates
also as a partner in the ENO tree planting
day in Espoo, one of the global events
organized by ENO Environment Online. The
seedlings for these events come from UPM’s
nursery in Joroinen, which produces high
quality seedlings of native origin to be used
to regenerate UPM forest service customers’
and UPM company forests.
“A tree seedling and a school child are creators
of the future,” says Päivi Salpakivi-Salomaa,
Vice President, UPM Environment.
“Planting a tree is an investment and good
for the climate. A growing tree sequestrates
atmospheric carbon throughout its lifetime.
The new forest improves the quality of surface
and ground water, it creates the preconditions
for berry and mushroom production
and makes a habitat for hundreds of other
species.”
Every year UPM plants more than 50 million
tree seedlings. The long time span of sustainable
forestry materialises in tree planting.
Forest regeneration is a central element of
responsible forest management.
UPM FLASH / 2 . 2012 / 5

NEWS
“Care for a Green Future”
summer camp inspires students
UPM’s “Care for a Green Future” summer
camp was held on July 18. The event raising
awareness of environmental protection
brought together 47 teachers and students
from four local primary schools. The governors
from Changshu Environmental Protection
Bureau, Municipal Education Bureau
and Law Promotion Division also attended
the summer camp.
During the summer camp, students visited
the Changshu mill and gained insights into
paper-making technology. The students also
practiced team working skills by making
paper-cut art works and putting together a
green fashion show using recycled materials.
“The summer camp is an extension of UPM
green education and it enables us to experience
the meaning of environmental protection
first-hand and see environmental
protection in action,” says Headmaster Fei
of the Lv Di Primary School.
“Through the summer camp activities, we
hope the students will take home green thinking,
and start making small steps toward
making a larger environmental difference
in their everyday lives,” says Lenny Zhong,
Head of UPM Communications, APAC.
UPM Clean Run campaign stresses environmental
leadership
In 2011, UPM launched the Clean Run campaign aiming to further reduce the environmental impact
of UPM operations. The campaign encourages all employees to strive towards a greener UPM
through actions in daily work including discussions, performance assessments, and operation audits.
One of the major steps of the Clean Run campaign has been the mill operation audit. Päivi Rissanen,
Environmental Director from UPM headquarters in Finland, audited the clean operations
of Changshu mill during May 22-23, 2012. During the mill operation audit, Rissanen inspected
energy and water consumption as well as other emission data at the mill’s power plant, wastewater
processing plant, and production workshop.
Changshu mill has performed well on the Clean Run campaign. Besides the enhancement of employee
environmental training, the mill has made substantial investments in equipment improvement,
including a German filtering device to further reduce the suspended solids in wastewater.
6 / 2 . 2012 / UPM FLASH

NEWS
UPM Changshu mill upgrades Preprint Papers
In September, UPM Changshu mill upgraded its Fine Preprint Papers. The upgraded
preprint papers not only provide customers with more options on grammage, but also
extend the whiteness to fully meet requirements of different customers.
The UPM Preprint Papers includes two types of products: UPM Fine Preprint and
UPM Fine Premium Preprint.
UPM Fine Preprint line has expanded from the 60, 70 and 80 g/m2 series to 60, 70, 80,
90, 100 and 120 g/m2. UPM Fine Premium Preprint still includes the 70g/m2 and 80g/
m2. The whiteness has been upgraded by three grades, including CIE whiteness 145,
155 and 167.
UPM Preprint range covers papers for all
main preprint end uses. It’s suitable for
documents such as invoices, bank account
and insurance statements, advertising leaflets
or any kind of direct mail. Both FSC
and PEFC certified Preprint papers are
available.
UPM sponsors printing skills competition in China
Mini-pack of UPM Jetset
Presentation launched
The mini-pack of UPM Jetset Presentation
is now available in the Chinese market. 100
sheets of copy paper in A4 size are packed
into a smaller plastic bag with a self-adhesive
sealing. The smaller pack provides an easy
choice for consumers to carry, use and storage.
This year, UPM sponsored the Third National Occupational Skill Competition for the
Printing Industry, following on the success of its sponsorship of the same event in 2010.
As the exclusive paper sponsor for the competition, UPM provided competition paper
to the final round of the competition. The paper used was the 105g UPM Finesse classic
gloss produced by UPM Changshu mill.
There were two series in the competition: the six-day student competition was held on
May 29 in Shenzhen and drew 119 students from national printing colleges and technology
schools. The competition for industry representatives including 150 participants was
held in Shenzhen on Aug 13. UPM Finesse classic gloss paper performed as expected,
providing superlative paper performance ensuring the fairness of the competition.
UPM wins government
bid in China
UPM has won the bidding for the 2012 governmental
procurement for information products
with its UPM Jetset,
Copykid, Yes, Future
and Office series copy
paper. The papers
were cited for their
high quality, excellent
environmental
credentials and
reliable service.
UPM FLASH / 2 . 2012 / 7

featUre stOrY
Text: Ada Qin Photos: UPM
The answers you need
– right now
The newly upgraded UPM Customer Online tool provides customers the convenience
and accessibility to track their order status anywhere at any time, enabling UPM to
offer superior services.
Ms. Guo Zhijun, General Manager of Shanghai Guantian
Paper Co., Ltd. (SGP), is a regular user of the
UPM Customer Online service. The service fits
her busy schedule as it allows her to track orders
quickly and efficiently.
“In the past, we had to phone or fax UPM Customer Service Specialist
to obtain our order information. Now, it is much more convenient
and the information is easy to access,” says Guo Zhijun.
SGP is a professional paper distributor that has grown rapidly
for 15 years in Shanghai market and is one of UPM’s earliest
customers in China.
“We’ll most often look into order status when our customers need
an urgent delivery. So, ideally we would like to get order information
within a few minutes so that we can answer our customers
promptly. Through conventional ways such as phone and fax, that
just wasn’t possible,” explains Guo Zhijun.
SGP and other customers began to use UPM Customer Online
about two years ago. In March this year, UPM launched an
upgraded version offering better performance and improved user
friendly interface.
Available all the time
The prime advantage of UPM Customer Online is providing customers
with real time online information - 24 hours a day, seven
days a week. With a computer or a portable computing device,
like IPAD and an Internet connection, customers can log onto the
8 / 2 . 2012 / UPM FLASH

featUre stOrY
system anywhere at any time.
In the system, the customers have a wealth
of information at their fingertips: order
status, delivery status, stock information,
and invoices. Customized reports can be
requested at the click of a mouse and all
changes are updated in real-time.
“After office hours, if a UPM Customer Service
Specialist is not available, we can check
our order status, and print copies of the information
we need. Knowledge of order status
allows our logistics planners to make proper
arrangements,” says Ms. Makiko Nakao of
Marubeni Corporation.
“We anticipate that by the end of this year
more and more customers in the Asia-Pacific
Region will be using UPM Customer Online
to support their business,” says Tim Huang,
E-business Manager of UPM Asia-Pacific
Region.
Efficiency and cost savings
Customers appreciate the efficiency gains
provided by the new system. Chengdu Zhenxingheng
Trade Co., Ltd. (CZT) is one of the
largest copy paper dealers in Southwest
China. This March, they began to use UPM
Customer Online Service, and were amazed
by the system capability.
“The new system allows us to get the most
up-to-date information on order quantities,
delivery times, invoices and allows us to calculate
our rebates. Gathering such information
before was time consuming, but now
that we’ve tailored the system to our needs,
the information can be with us in an instant,”
says Ms.Yan, a CZT Accountant.
Shu Yuqiong, the CZT account manager, also
spoke highly of the cooperation with UPM.
“Out of all the paper suppliers we work with,
UPM is the only one who can offer an online
customer service system,” says Shu.
Guo Zhijun, GM of SGP, also underlined
the saving advantage of using the customer
online service.
“In the past, all our reports were printed by
fax. The resulting piles of paper were all
stored in a warehouse, and because of confidentiality
issues, had to be shredded before
disposal. It goes without saying, that the system
has provided us a lot of efficiency and
savings.” says Guo Zhijun.
“I like the new UPM online customer service
very much,” praises Kathy Law, a buying
clerk from the Samson Group in Hong Kong.
“It’s fast, and the dashboard is clean and easy
to navigate.”
Improved management control and
overall business planning
To give the users a better experience, each
customer can customize the interfaces to their
needs. Customers can also create user-defined
printed reports.
“Having easy access to the information and
reports allows the management to have better
control and visibility of their own daily
operation and enhance their business planning.”
Says York Fang, VP Supply Chain,
UPM Asia Pacific.
“We have received many positive feedbacks
from our customers but we are striving to
incorporate more functionality to the system
such as placing orders on line, track and
trace function and other system updates. Ultimately,
the system will be developed to meet
the evolving customer needs. It also plays a
key role in shaping our high quality customer
service!”
UPM FLASH / 2 . 2012 / 9

featUre stOrY
Drupa exhibition proved
that print has great potential
Text: Thomas Ehrnrooth Photos: UPM
At the drupa exhibition in May I realised at the latest, how much
the paper and printing industry have changed during the past six
years I spent in another business. Technological development,
innovations and new features made me impressed.
10 / 2 . 2012 / UPM FLASH

featUre stOrY
service for comprehensive workflow, colour
and print quality management.Also our environmental
team had a strong presence at our
stand and our customers and other stakeholders
got to know the new UPM Responsibility
HUB website as well as our brand new UPM
Paper Life video among other interesting topics
discussed during the exhibition.
Having a long history in the paper
business I was expecting to meet
the good old drupa atmosphere at
the biggest expo of the worldwide
print and media industry – but my expectations
did not realise. There was something
new in the air this time.
Drupa 2012 - held in Germany, Düsseldorf -
was clearly showing that despite of the huge
challenges the whole industry is facing – print
has potential and the sector is renewing and
investing heavily in its future.
As the world’s leading manufacturer of
graphic papers, we wanted to stand out at the
fair above all as a frontrunner and a partner
that keeps up with the times, who strongly
believes in paper and print – today and tomorrow.
That was well recognised and appreciated
by our customers too.
Our stand supported the chosen theme and we
succeeded extremely well in presenting paper
as a gateway to new and inspiring experiences
by introducing the third dimension of print at
our stand. Augmented reality, QR codes and
other examples of combining print and digital
content were a hot topic at drupa and also an
integral part of our appearance there. Our
own experts and visionary cooperatives were
showcasing exciting examples of combining
digital and print – providing inspiration and
solutions to all in the media industry.
UPM’s services were well present at the
stand. As part of our technical service offering
we showcased UPM ColorCTRL, a new
An international trade fair, drupa, is the biggest exhibition of
the print and media industry. The event is held every four years
and it brings together media and printing professionals from
all around the world. This year drupa trade fair gathered over
314,000 experts and almost 2,000 exhibitors from more than
130 countries to Düsseldorf, Germany in May. More information
can be found at www.drupa.com.
Despite the first impression you might have
got as a visitior drupa is not only an exhibition
for digital printing. After what I have
heard and seen at the exhibition I believe that
both digital and analog printing will continue
living in a constructive co-existence also in
the future.
During drupa the Landa Corporation launched
a new printing method that is based on the
nano- technology aiming to set a new industry
standard for mainstream printing. The most
unique feature in the presses is probably that
they are operated by a touch screen which
looks looking like a giant iPad. Due to the
high degree of automation a single operator
can manage even four presses at a time. It is
interesting to see, if Landa will be showing
the way also for other companies.
The finals of the “SHOTS Heard Around the
World” print simulator-based productivity
contest culminated during the expo. Over
150 students from Asia, Europe and North
America had been remotely competing at
their technical schools and the best students
met face-to-face at drupa.
Simulation-based training is now a worldwide
norm in almost every profession. We
have been using printing simulators successfully
for several years to train customers and
our own staff to improve their understanding
on the printing processes.
Let’s continue to explore the new opportunities
paper and print have to offer!
UPM FLASH / 2 . 2012 / 11

customer story
Text: Ada Qin Photos: UPM
12 / 2 . 2012 / UPM FLASH

The acquisition of cutting edge equipment
was the first step. Next Shengtong was chalcustomer
story
Printing Pioneer
Business for Beijing Shengtong Printing is flourishing in the Chinese high-end
printing market. The company is ready to expand its market and go global.
UPM and Shengtong Printing have
been cooperating with each other
for over a decade. The partnership
has been especially fruitful
in northern China.
Since Shengtong Printing was listed on the
Shenzhen Stock Exchange Small and Medium-sized
Enterprise board in July 2011,
this private-run printing company has gained
interest and standing in the public eye. Shengtong
Printing developed rapidly during its
first decade, multiplying its sales income
tenfold, and gaining a firm foothold in the
high-end publication and commercial printing
market. Shengtong Printing’s customers
include many well-known publishing houses
and magazines including the Xinhua News
Agency, People’s Education Press, Foreign
Language Teaching and Research Press, as
well as Outlook, Money Weekly, and Marie
Claire. In addition, Shengtong Printing’s
hardback book products have earned a favorable
reputation in the overseas markets;
such as in Europe. In the brutally competitive
printing industry, Shengtong has risen
high on the list of China’s top 100 printing
enterprises.
“UPM has consistently provided us with high
quality paper, and we feel that the product
quality is as good as UPM’s world-class
reputation,” says Li Yanqiu, Vice-President
and one of the founders of Shengtong
Printing.“Through the close relationship, we
get insights into the changes and future direction
of the international paper making and
printing industry.”
Li Yanqiu credited three factors that have
been key in the success of Shengtong Printing:
vision, determination, and focus.
Target high-end market
The Shengtong Printing entrepreneurial and
management team have broad experience in
the printing industry. During the rapid development
of the printing industry at the turn
of the century, Shengtong’s entrepreneurial
team recognized that the competition in the
printing industry was focused on the middle
and low-end of the market.
“The middle and low-end printing market
was still profitable at that time, but the long
run prospects were limited and the competition
was becoming increasingly fierce,” says
Li Yanqiu.
At that time in the export printing business in
the coastal areas of China, there were also foreign-invested
printers. However, the Shengtong
team found there was a significant gap
in the product quality of world-class printers
and theirs. Since its establishment in 2000,
Shengtong has aimed their development strat-
Li Yanqiu, Vice-President and one of the
founders of Shengtong Printing.
egy at the mid-to-high end printing market.
An industry pioneer
To break through the high-end printing market
Shengtong Printing went on the path of
continuous improvement; especially made a
bold move for investment in printing equipment
and technology, Shengtong soon have
a leading position in the market. In 2002,
Shengtong acquired a GOSS M600 printing
press for printing high-end periodicals
to become the first private-run printer to own
such advanced printing equipment in China.
UPM FLASH / 2 . 2012 / 13

customer story
Shengtong Printing’s customers include
many well-known publishing houses and
magazines including the Xinhua News
Agency, People’s Education Press, Foreign
Language Teaching and Research Press,
as well as Outlook, Money Weekly, and
Marie Claire.
lenged to learn how to get the most out of the
equipment. Both the founders and the management
team of Shengtong Printing waded
through the study and training in order to
master the technology.This in turn led to the
opening of a new market.
Shengtong staked its reputation on staying
current with international cutting-edge
printing equipment and technology. Over
ten years of development, Shengtong has
been ranked at the top of printing industry,
introducing computer-to-plate (CTP) digital
printing technology, the most advanced
American and German printing machines and
a powerful post-press system. Innovation is
always the company’s culture, according to
this, Shengtong designed and installed two
commercial keel transmission systems and
became one of the first printers in China to
introduce the keel transmission system into
the heatset web offset printing. Shengtong independently
developed an enterprise resource
planning (ERP) system for their own business
management, applying information technology
to the production management and has
made great strides in improving production
and operational efficiency.
Committed to sustainability think
Shengtong is also known in the industry for
its commitment to the environment. In 2009,
Shengtong was among the first to join the
Beijing Green Printing Industry Technology
Innovation Association. After joining,
Shengtong invested heavily in green printing
and environmental protection, and has been
awarded the Green Award and green certification
by authorities every year. Using environment-friendly
ink, paper, and pre-press
materials, Shengtong Printing has even infused
the idea of energy conservation and low
carbon into their plant design and construction
as well as equipment model selection.
The ECLOCOOL drier used with the GOSS
Sunday2000/24p wide high-speed Heatset
Web Offset Printing Press adopts secondary
combustion technology, and the watercooling
device for the Heidelberg Format 70
x100 8-color Sheetfed Offset Printing Press
have the latest cleaning and energy saving
mechanisms.
Shengtong Printing and UPM’s shared commitment
to the environment has become a
key factor for long-term cooperation and has
also won the respect of the high-end market.
“Environmental protection reflects the values
and attitudes of an enterprise. When Shengtong
was established, we set a very definite
goal: to make our development sustainable.
We later found it consistent with the theme of
green printing,” says Li Yanqiu. “Sustainability
is at the heart of our strategic development
and this allows us to adopt an integrated approach
in all aspects of our business including
marketing, business management, and
investment.”
14 / 2 . 2012 / UPM FLASH

customer story
Text: Ada Qin Photos: Guangdong Guanhao & UPM
Guangdong Guanhao
– a leading variable information
specialty paper producer
Guangdong Guanhao, the industry leader for Chinese direct thermal paper and carbonless
paper, has joined forces with UPM to create new businesses in the label industry.
Guangdong Guanhao’s specialty
paper products are widely used
across China in many forms:
value-added tax invoices, express
mail labels, ATM slips, train tickets,
and supermarket receipts.
“We are the first large scale specialty paper
manufacturer in China for direct thermal paper
and carbonless paper,” says Li Zhen,
the Vice General Manager of Guangdong
Guanhao.
Guangdong Guanhao High-Tech Co., Ltd,
founded in 1993, is a leading enterprise in
the Chinese specialty paper industry with a
current annual base paper capacity of 60,000
tons and annual coating capacity of 150,000
tons. Its products are used by tax agencies,
post offices, banks, and business services.
High-tech Products
Guangdong Guanhao targets medium and
high-end markets for both its direct thermal
paper and carbonless paper. In 1990s,
Guanhao began to enter the carbonless paper
market.
The company introduced the most advanced
carbonless paper production line from Switzerland
and adopted microcapsule technology
from Germany, a method crucial to carbonless
paper production. It also partnered with
leading Chinese researchers in order to develop
cutting edge carbonless copy products.
In the following years, the carbonless paper
market developed rapidly, and Guanhao was
UPM FLASH / 2 . 2012 / 15

customer story
ready to meet the needs of the market. With
its technology, equipment and talent people,
the company gained a sizable market share.
According to Li Zhen, carbonless paper
stands out as a successful product case study
in the specialty paper industry. “The annual
global demand has reached over 3 million
tons, benefiting from the requirements of
international accounting standards. The annual
growth of China’s carbonless paper sales
(including export growth) is over 20 percent.
Third party statistics show that the carbonless
paper capacity of China reached 450,000
tons in 2011.”
In terms of total output, Guanhao is not the
largest manufacturer in China, but the company
targets markets requiring higher product
quality and greater added value.
“We seldom enter areas like computer form
which have relatively low product quality
requirements,” says Li Zhen. “Our strength is
in providing customized direct thermal paper
products which are individually formulated to
meet our customers’ requirements exactly.”
The most valued characteristic of direct
thermal paper is its ability to print variable
information rapidly without changing ink
cartridges. Direct thermal printing is used
extensively to print tickets, logistics labels,
supermarket cashier receipts and ATM receipts.
The print quality of these direct thermal
printed documents must be sharp because
of their valuable content of information.
“Train tickets require heat-resistant direct
thermal printing paper that demands a special
production process. Some paper may also
need to go through a special coating process
so that the direct thermal printed information
lasts,” explains Li Zhen.
Changing Markets
Carbonless paper once enjoyed extraordinary
growth in specialty paper sales and its annual
sales growth rate in the Chinese market is still
relatively high.
“However, the multi-ply layers carbonless
paper market is declining year by year in the
global market, especially in the European-
American countries, because of the impact
of informatization,” says Li Zhen.
Li Zhen also points out two reasons why carbonless
paper output in China continues to
grow.
“Firstly, Chinese informatization hasn’t
reached the levels of the developed countries,
and secondly, Chinese firms have considerable
export potential. However, we realize that
the market will eventually come to a halt.”
In comparison, growth in the direct thermal
paper market is showing no signs of slowing
down. According to third party data, direct
thermal paper displays stable global growth
with total output reaching 800,000 tons in
2011. At the same time, direct thermal paper
output in China has maintained a double-digit
increase with total output reaching 110, 000
tons in 2011.
“Although the demand of direct thermal
paper for fax machines is decreasing, tickets,
invoices for logistics, supermarket labels
and cashier receipts, continue to show
healthy growth potential. In this respect, we
can see that new applications are stimulating
demand.”
From the point view of Li Zhen, Guanhao’s
achievements in the field of variable information
specialty paper can be attributed to its
long-term development strategy.
Label Cooperation with UPM
Several years ago, Guanhao turned its attention
to the label industry. In 2008, Guanhao
imported a label production line with the most
advanced technology at that time. This formally
marked the start of its investment in
the adhesive label materials.
“We feel that the demand for label markets
is very high. Statistically, the Chinese label
16 / 2 . 2012 / UPM FLASH

customer story
“Through our partnership we
know that UPM’s products and
services are fit-for-purpose.”
market’s sales growth is twice that of the GDP and what’s more important
is that Chinese label consumption per capita is far lower than that of the
developed countries,” says Li Zhen.
The variable information label has a huge market, in which Guanhao has
natural advantages and solid experience.
More than two years ago, UPM started to cooperate with Guanhao as the
supplier of the glassine paper for label base paper. “Through our partnership
we know that UPM’s products and services are fit-for-purpose. No
matter whether it has been in putting together the formula for our label
products or providing us advice on our label production line, we’ve been
provided with strong technology and service support. Working with UPM
has been excellent in every way,” Li Zhen says with certainty.
Juhani Ylikoski, Sales Director of UPM Converters Segment in Asia-
Pacific, said UPM is very optimistic about the growth potential of specialty
paper in the Asia-Pacific region and China.
“We are currently building a professional technical service team here,
hoping to share our many years of accumulated experience in specialty
paper with local manufacturers. We’re utilizing our experience, technology,
products and strong service orientation to help clients grow
rapidly, and to create a win-win situation,” says Juhani. Recently, UPM
has announced an investment in a new woodfree uncoated and label paper
production line in China, aiming to meet the constantly increasing
market demand of high quality label and release liners product in China
and the Asia Pacific region.
“At present, the Chinese label market is still led by international brands.
With cooperation with our international partners, such as UPM, we believe
that Guanhao has the capability to reach a leading market position
by becoming the key local representative for labels,” Li Zhen affirms.
UPM FLASH / 2 . 2012 / 17

CORPORATE RESPONSIBILITY
Text: Mary Ma Photos: UPM
Cooperation in a Green way
— UPM visits WWF and Greenpeace headquarters in China
On a sunny day in Beijing,
UPM Asia Pacific Marketing
and Business Development
Director Ali Malassu, Global
Environmental Director Päivi Rissanen,
and Asia Pacific Environmental Marketing
Manager Mary Ma sat down for a meeting
with representatives of global environmental
organizations World Wide Fund for
Nature (WWF) and Greenpeace. The aim
was to discuss environmental protection
issues and explore opportunities for future
cooperation.
Green partners
UPM has a close partnership with WWF
globally. In the International Year of Forests
2011, UPM and WWF worked together to
produce their joint symbol for forest protection.
The symbol includes the WWF panda
logo and the slogan “Working with UPM
to Protect Our Forests”. The symbol underlines
both organizations’ aim to promote
sustainable forest management and the use
of products from sustainable forests.
But the partnership of the two parties does
not end there. UPM has also supported
WWF’s paper evaluation system “Check
Your Paper”, participated in WWF’s annual
“Earth Hour”, and cooperated with
WWF to promote Next-generation Plantation
Project. In 2011, the project team
visited Yunnan and Sichuan provinces to
improve the economic benefits of planting
and harvesting of forests and improve the
income of local residents.
WWF entered China over 20 years ago,
and currently has around 100 employees in
China in 10 different offices. WWF works
mainly in the Yangzi River Basin, Heilongjiang
River Valley, Yellow Sea biological
area, Upper Mekong River and Tibet.
Major projects include saving the Siberian
Tiger, promoting the expansion of nature
reserves, Yangzi River Basin water conservation,
the promotion of forest management
and FSC forest certification. Recently WWF
has focused on the protection of forest and
water resources.
Zhong Dexin, Cooperation and Development
Director for WWF, has praised
UPM’s environmental protection efforts and
achievements. Regarding sustainable forests
and forest products, both parties agreed
to carry out deeper and broader cooperation
and jointly promote the development of
FSC certified paper in the Chinese market.
“UPM Changshu mill has been FSC certified
since 2006. The long-term publicity and
promotion of the FSC concept has achieved
remarkable results, with more and more users
beginning to pay attention to FSC certified
paper,” says Ali Malassu. “We are
delighted that FSC-certified UPM Jetset is
used at all WWF offices in China.”
18 / 2 . 2012 / UPM FLASH

CORPORATE RESPONSIBILITY
Positive action will bring change
After the visit to WWF, the UPM team
traveled to Greenpeace Headquarters
in Beijing. There they met with Li Yifang,
the Senior Project Director, and
Forest Protection Project Manager Liu
Bing to discuss the marketing prospects
of environmental and sustainable
forest products. Greenpeace is another
advocate of FSC certification.
In early 2009, Greenpeace launched
the “Book Lovers for Forests” campaign
and engaged in promoting forest
friendly book publishing together with
publishing houses, paper suppliers,
authors and the public. Greenpeace
called on well-known authors and
publishing houses to use environmentally
friendly paper, including recycled
paper and FSC-certified paper.
One of the recent Greenpeace projects
addressing harmful chemicals and the
safety of foods and agricultural products
is chemical product management.
In line with this, UPM has guaranteed
that no harmful chemicals have been
added to paper production, so consumers
can rest assured when using UPM
products.
“We not only carried out very detailed
multi-level discussions, but also considered
many projects that have potential
for cooperation. We expect
to further cooperate with world renowned
environmental organizations
such as WWF and Greenpeace to protect
our environment and improve the
public’s environmental awareness,”
says Ali Malassu.
WWF (World Wide Fund for
Nature) is one of the world’s largest
independent organizations dedicated
to the conservation of nature. Since the
first office was founded in Switzerland
in 1961, WWF has grown into a
global network active in more than 100
countries.
WWF has been active in China
since 1980, when it was invited
by the Chinese government as the
first international NGO to work on
nature conservation. The Beijing office
opened in 1996, and there are now
8 additional field offices spread across
China. WWF has more than 120
employees working in China on a
broad range of conservation programs
including species, freshwater, forest,
marine, climate change and energy, the
green economy and footprint.
From left to right: Jiang Yun, Zhong Dexin, Päivi Rissanen, Jim Gradoville (Chief Executive,
WWF), Ali Malassu and Mary Ma.
Greenpeace is an independent global
campaigning organization that acts
to change attitudes and behaviour, to
protect and conserve the environment
and to promote peace. It consists of
Greenpeace International (Stichting
Greenpeace Council) in Amsterdam,
and 28 national and regional offices
around the world, providing a presence
in over 40 countries.
UPM FLASH / 2 . 2012 / 19

TECHNOLOGY FRONTLINE
Text: Xu Yuan Photos: UPM
An introduction to dot
of printing
The halftone dot has served as the
standard in the printing industry since
its introduction in the 19th century.
Modern printing professionals know
that mastering a whole range of halftone dot
techniques is important for their industry. To
the uninitiated, though, a whole new world
can appear to them when they are given the
opportunity to observe presswork through
a microscope. In this article we review the
basics of the halftone dot in order to better
understand this small but essential element
of the printing world.
What’s halftone dot
The halftone dot is a basic unit of printing
that when combined with unprinted area creates
a continuous tone image. There are two
key types of halftone screening technique:
one is called Amplitude Modulation - where
gradations of image are expressed through the
varying size of dots but where the distance
between the dots is fixed. The other method
of creating screens - Frequency Modulation
- where the gradation within the image is
expressed through the density of dots and
not through their size.
The halftone dot is the foundation of printing
and reproduction processes, the “DNA” of
nearly all printed image. It is the basic unit
through which printed materials can embody
different gradations on a page layout and enable
a natural division of tone shades. It determines
color, gradation and image outlines.
Therefore, when making printing plates, only
a precisely sized halftone dot can reproduce
the original color faithfully and guarantee a
favorable output.
Size of halftone dot
The shade of a printed page is made possible
by varying the sizes of the halftone dot. In
China, technicians use character “Cheng”
to measure different dot size. This so-called
“Cheng” represents the percentage of halftone
dots within a given unit area. For example,
one cheng is 10%, and two cheng is
20 / 2 . 2012 / UPM FLASH

TECHNOLOGY FRONTLINE
20%. One hundred percent results in a true
solid color. The higher the percentage number,
the bigger the dot and more ink coverage.
The percentage difference determines
the color gradations on the page layout. Usually,
the gradations on the image are divided
into three areas. Highlight area is created using
dot size of 10% to 30%, composing the
lighter shades of an image. Midtone area is
produced with dot size of 40% to 60%, resulting
in the medium shades between bright
and dark extremes. Shadow area is composed
of 70% to 90% of dots, forming dark shades
and shadows. The lightest part on the page
with less than 10% dots, but they still contain
dots. Only by precisely identifying the percentage
of halftone dots, can printers apply
the rules of dot change, bring the plates into
conformity with an original manuscript, and
produce printed products with precise colors
and satisfactory quality. These are the goals
of quality assurance.
Halftone dot printing
2% 50%
Chart 1
Y90°
M45°
Chart 2
K75°
C15°
98%
There are two key halftone dot printing techniques:
amplitude modulation and frequency
modulation.
1) Amplitude Modulated Halftone
Dot Screening grades images by varying the
sizes of halftone dots. One of the shortcomings
of this technique is that a moiré effect
caused by intersecting linear patterns can
result. Key to this approach is screen angle,
the angle formed by the line between centers
of two adjacent dots and datum line. Den-
Only by precisely identifying
the percentage of halftone dots,
can printers apply the rules of
dot change, bring the plates
into conformity with an original
manuscript, and produce
printed products with precise
colors and satisfactory quality.
sity and screen angle of screen line need to
be controlled, and the angle formed by two
color plates must be 30 degrees or above so
that “screen collision” producing undesirable
patterns can be avoided. Usually, the screen
angle of C plate is 15 degrees, M plate 45
degrees, K plate 75 degrees, and the Y plate
90 degrees. Although, the angle formed by
the Y plate and other plates will be only 15
degrees, as it is lighter than other three colors,
the screen collision will not be apparent.
2) Frequency Modulated Halftone
Dot Screening grades images by randomly
placing dots, that is varying densities of
dots identical in size within a given unit
area. Using this approach solves most moiré
problems. The diameters of the small dots
are between 8-30 microns, and the sizes of
the dots are identical. The color shade expression
is different from that of Amplitude
Modulated Halftone Dot. The shade of image
is expressed through density: the higher
the density of dots, the darker the color. The
disadvantages of this technique include light
position gradation and the flat screen can easily
generate coarse particles. The density of
middle tone dots is also extremely high, and
dot gain is difficult to control.
3) Hybrid Halftone Dot Screening
The Hybrid Halftone method combines both
Amplitude Modulation and Frequency Modulation.
Frequency Modulation is used to create
identical small dots expressing gradation
through density in the light areas with 1-10
percent dots and dark areas with 90-99 percent
dots. In the middle tone area between 10
and 90 percent, Amplitude Modulated Halftone
Dot Screening is used altering the sizes
of the dots. As the positions of all dots are random,
the screen angle need not be considered.
Mixed dots carry both the advantages of the
Frequency Modulated Halftone Dot and Amplitude
Modulated Halftone Dot techniques.
Combined with the set-up of a highly calibrated
external drum CTP plate setter and fast
hardening thermosensitive plates, the Mixed
Halftone method can really bring out the best
in CTP printing.
UPM FLASH / 2 . 2012 / 21

Marketing Information
Source: The 12th Five-Year Plan for China pulp and paper industry, RISI
Key Points of The 12 th Five-Year Plan
for China Pulp and Paper Industry
China’s 12 th Five-Year (2011-2015) Plan for the pulp and paper industry (FYP) was released on December, 30, 2011. The latest FYP directing
the pulp and paper industry through 2015 targets balanced growth of total paper and board consumption and production. Put an emphasis
on demand and supply rebalancing.
FYP requires working on 7 focused areas:
1. Improve raw material structure.
2. Increase indigenous innovation, improve technological structure.
3. Optimize regional development, allocate resources properly.
4. Conduct clean production, protect environment.
5. Optimize enterprise structure, promote mergers & acquisitions.
Efforts to improve industrial consolidation.
6. Improve product structure, improve product quality. Develop new
and environment-friendly products, speed up the upgrading of lowend
products.
7. Establish saving mechanism, promote appropriate consumption.
Implement 3 key projects
Project on forest–pulp-paper, clean production and recycling, and
product upgrade and equipment independence.
9 policies and support
1. Strengthen policy support, promote forest-pulp-paper integration.
2. Support independent R&D, develop equipment manufactured in
China.
3. Improve incentive policy, promote energy saving and emission
reduction.
4. Increase waste paper recycling, promote green consumerism.
5. Improve foreign investment utilization policy, improve foreign
investment utilization environment.
6. Increase support, promote overseas investment.
7. Increase investment, expand financing channels.
8. Establish & improve mechanism in response to trade conflict.
9. Increase influence of China Paper Society, improve industry selfdiscipline.
Driven by national policy on eliminating outdated capacity (more than 10 million tons, accounting for 10%-15% of total capacity), the consolidation
paper-making industry is expected to speed up and the pollutant emission is also expected to reduce gradually during 2011-2015.
Main chart
Chart 1 Main targets of the 12th Five-Year Plan for paper-making industry development
Category Target 2010 年 2015 年 ( 预 计 ) CAGR% 属 性
P&B
P&B capacity (million t/a) 9270 11600 4.6
Expecte
P&B demand (million t/a) 9173 11470 4.6
1. Pulp (%) 22.0 24.3 /
Domestic (%) 8.4 10.3 /
Imports (%) 13.6 14.0 /
Fiber
Consumption
2. RCF (%) 62.7 64.0 / Expecte
Domestic (%) 38.0 41.0 /
Imports (%) 24.7 23.0 /
3. Non-wood pulp (%) 15.3 11.7 /
Resource
Coal consumption /ton of P&B -22%
Coal consumption /ton of pulp -18%
0.68
0.45
0.53
0.37
-4.9
-3.8 Restricte
Consumption
Water consumption /ton of pulp/P&B -18% 85 70 -3.8
Environment
COD discharge Reduce 10-12% from 2010 to 2015
Restricte
Protection
Ammonia & Nitrogen discharge Reduce 10% from 2010 to 2015
Old Capacity Capacity closure Above 10 million tons Restricte
Chart 2 Regional Development in China
North West
Not suitable for
paper industry
Xinjiang
Tibet
South West
Develop bamboo pulp
North East
Foreign fiber resources
Fast growing plantation
Reed base
Heilongjiang
Beijing
Liaoning
Gansu Inner Mongolia
Yellow river & Huai river
Hebei Tianjin
Shanxi
Develop chemical mechanical pulp
Strength market wood pulp
Qinghai
Ningxia
Shandong and waste paper recycling
Adjust the straw pulp structure
Shaanxi
Henan Jiangsu
Anhui Yangtze river
Shanghai Forecast-paper integration
Sichuan
Hubei
Encourage wood pulp imports
Zhejiang
Jiangxi
Strength waste paper recycling
Hunan
Yunnan
Guizhou
Fujian
South China
Guangxi Guangdong Develop plantation
Taiwan
Encourage woodchip imports
Hong Kong
Hainan
Pearl River Delta: control
of development
Guangxi: bagasse resources
Correction:In Flash magazine Issue 1/2012, the article of “The future of the Asia Pacific printing
market”, which data sources comes from Pira.
Jilin
22 / 2 . 2012 / UPM FLASH

Product & Service
UPM FLASH / 2 . 2012 / 23