2015 capital markets day presentation by rajah jayendran

1. Rajah Jayendran,
SVP, MD Stora Enso Integrated Project & Operations
London, 28 May 2015
Stora Enso Guangxi
Project
The renewable materials company

2. It should be noted that certain statements herein which are not
historical facts, including, without limitation those regarding
expectations for market growth and developments; expectations
for growth and profitability; and statements preceded by
“believes”, “expects”, “anticipates”, “foresees”, or similar
expressions, are forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act of
1995. Since these statements are based on current plans.
estimates and projections, they involve risks and uncertainties
which may cause actual results to materially differ from those
expressed in such forward-looking statements. Such factors
include, but are not limited to: (1) operating factors such as
continued success of manufacturing activities and the
achievement of efficiencies therein, continued success of product
development, acceptance of new products or services by the
Group’s targeted customers, success of the existing and future
collaboration arrangements, changes in business strategy or
development plans or targets, changes in the degree of protection
created by the Group’s patents and other intellectual property
rights, the availability of capital on acceptable terms; (2) industry
conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the
Group’s products and the pricing pressures thereto. price
fluctuations in raw materials, financial condition of the customers
and the competitors of the Group, the potential introduction of
competing products and technologies by competitors; and (3)
general economic conditions, such as rates of economic growth in
the Group’s principal geographic markets or fluctuations in
exchange and interest rates.
The renewable materials company
Disclaimer

3. The renewable materials company
Stora Enso Guangxi Milestones
The renewable materials company
2002 2012 2013 2014 2015 Mid-2016
Office relocation to Tie Shan
Gang was completed
Start of
board
production
Establishing plantations in
Guangxi
Three Joint
Ventures set up.
Received the approval
from MOFCOM and NDRC
State land use and
construction permits
Kicked off mill
construction
Announced decision to
build a world-class
consumer board and
pulp mill
Decision to split the
project to phases 1
and 2
IFC becomes owner
of the project with 5% Pending approval
for the phase 2,
pulp mill by the
Stora Enso board

4. The renewable materials company
Rajah Jayendran
The renewable materials company
• SVP, Managing Director Stora Enso Guangxi
Integrated Project and Operations
• Based in Asia since 2000
• Background
– SVP, Head of Commercialization Asia Pacific, Linde Group,
Singapore
Leading all investments and business expansions in APAC
– SVP, Head of Strategic Projects
Lonza AG, Basel/Shanghai
Corporate restructuring and Asia expansion
– EVP, Chief Strategy and Planning Officer
ChemChina/Bluestar Beijing
Corporate restructuring and multi billion dollar expansion
and international M&A
– VP, Bayer MaterialScience AG, Shanghai
3.1 bln USD greenfield integrated site in Shanghai
establishing materials and chemicals business in China

5. The renewable materials company
China
Myanmar
Vietnam
Laos
Guangxi overview
• Area: 236,700 km2
• Population: 46.8 mil
• Capital: Nanning
Woodyard
Effluent Plant
Main Office
Power Plant
Pulp line
Water
treatment
Board Mill
Guangxi Project: Phase I & II

6. Guangxi project- two phases
The renewable materials company
Chemicals
Bleached Hardwood
Kraft Pulp (BHKP)
Pulp raw
material
(UBSKP/BSKP/
BHKP)
Pulp BoardForestry
Liquid Packaging
Board(LPB)
Folding Box Board
(FBB)
External purchase
of wood
External
sales of BHKP
Internal use
of BHKP
Harvested volume
Plantation area
Market
Internal use
(production for pulp)
Bleached Chemi-
Thermo Mechanical Pulp (BCTMP)
Phase I Phase II

7. The renewable materials company
Guangxi project first phase investment
Historical and planned Capital Expenditures, 2014-16
The renewable materials company
Total investments
including plantations
for the first phase
• EUR 800 million
Capex approved to
date
390
180
230
MEUR
0
50
100
150
200
250
300
350
400
450
2014 2015 2016
390
180
230
2014 2015 2016
0
50
100
150
200
250
300
350
400
450

8. The renewable materials company
Mill construction underway with operations
ramp-up in mid-2016
The renewable materials company
Achieving
operational
milestones
Developing
local talent
Leveraging
SE-global
capabilities
• Currently 135 employees, ramp up to 210 by end of 2015
• Recruiting from a variety of local vocational schools
• Mill training to vocational school students ongoing
• Construction began November 2014
• Board Mill to be fully operational in mid-2016 and to
gradually ramp up to full capacity (450k t/a) in 18 months
• Extensive mentorship and knowledge sharing initiatives
• Exchange programs to European mills
• On-ground training provided for operations and technical
customer services

9. The renewable materials company
Overall Progress
The renewable materials company
• Overall progress at 30% completion as of May 22
• Construction progress on track at 25% completion
• Procurement progress 95% completion
• On track to meet mid-2016 operational start-up timeline
• 4.0 million working-hours free of incidents on site

10. The renewable materials company
Mill construction progress
The renewable materials company
Board Machine Plant Roof structure
Power generation boilerEffluent treatment plant

11. Forestry operations covering four territories
In Guangxi province – 1/3 social land, 2/3 state land
The renewable materials company
China
Myanmar
Vietnam
Laos
Plantation
areas
Yulin Region
Euca area: 17,000 ha
Standing volume:
2,218,000 m3
Beihai Region
Euca area: 22,000 ha
Standing volume:
2,971,000 m3
Qinlian Region
Euca area: 15,000 ha
Standing volume:
1,749,000 m3
Nanning Region
Euca area: 18,000 ha
Standing volume:
2,950,000 m3
Guangxi Mill
14.4 0.6Forest land
1.96 4.6Fast
growing
Eucalyptus
23.7 0.4Land base
Leased
by SE
% total
Total
Guangxi
m ha

12. Mitigating actions
– contract correction and conflicted land
The renewable materials company
Social land
contracting
Conflicted land
management
Potential risks Mitigating actions
• Conduct contract negotiations to:
– Update legacy agreements
– Reconcile conflicting document,
– Adjust rental & payment to buyout
middlemen
– Compensate local stakeholders
• Land use contracts
require correction
• Complex property
disputes and conflicting
economic interests with
villagers, local
governments
• Proactively engage with local gov’t to
align project objectives with local gov’t
intent
• Co-operate with local gov’t and police to
assess conflicts containment actions & to
address illegal wood processing mills
• Train staff in conflict avoidance and mgmt
• Land contested by locals,
causing disruption to
forestry ops (e.g., violence
against contractors, wood
theft, bribes)
61% of contracts1 have been corrected as of March 31, 2015
1 Calculated as contracts with "Major Defects" which have been corrected and no longer classified as major defects

13. The Guangxi Consumer Board Mill
will be operational mid-2016
The renewable materials company

14. World of packaging