January 9th, 2008

UPM and Chempolis start technology cooperation on the production of papermaking fibre and biochemicals with a novel technology

- UPM and Chempolis Oy, a Finnish technology company, have signed a licence agreement on the use of a novel biorefining technology for the production of papermaking fibre and biochemicals. Agro residues and other non-wood feedstocks, such as straw and reed can be used as raw materials for pulp and biochemicals.

UPM investigates a possibility to build an industrial biorefinery utilizing agro residues in China. The biorefinery would be the first industrial facility using this technology in the world. The UPM Asia R&D Center plays a key role in the research for agro residues as the base for pulp production.

Non-wood materials include a number of cultivated and naturally growing plants such as agricultural residues, and they are available in abundance, for example, in highly populated countries that have a shortage of papermaking fibres.

The biorefining technologies, patented by Chempolis, do not employ sulfur nor chlorine chemicals. Low water consumption, low greenhouse gas emissions and minimization of other environmental impacts of industrial production are the main environmental benefits of the new method.

For further information please contact:
Mr Markku S. Korpela, Director, Project Management, UPM, tel. +358 400 150469
Mr Tapani Kultaranta, Senior Vice President, Pulp and Biofuel Business Lines, Chempolis Oy, tel. +358 40 5034490

UPM in brief
UPM is one of the world's leading forest products groups. The Group's sales in 2006 were EUR 10 billion, and it has about 28,000 employees. UPM's main products include printing papers, self-adhesive label materials and wood products. The company has production plants in 14 countries and its main market areas are Europe and North America. UPM's shares are listed on the OMX Nordic Exchange Helsinki. The company's shares are also traded under an ADR programme on the OTC market in the United States. www.upm-kymmene.com

Chempolis in brief
Chempolis is a private technology company, whose main products include formicofib™, formicobio™, and formicochem™ biorefining processes. Since its establishment in 1995, Chempolis has been strongly focused on the development and delivery of environmentally sustainable and energy-efficient biorefining technologies and production solutions for industrial utilisation of non-wood feedstocks. Chempolis has currently locations in Finland and China. www.chempolis.com

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