The 2020’s have thrown supply chains into the spotlight like never before. From the global pandemic in 2020, when tissue paper made the news and became a scarce commodity, to today’s geopolitical volatility which disrupts trade routes and ports, supply security and stability is no longer something taken for granted: it has moved from being a procurement and logistics issue to a strategic, board-level concern.
Given the nature of tissue products (everyday essentials with constant demand) European tissue producers rely on their pulp supply to help them maintain continuous operations and fulfill customer orders. Robust, trusted relationships between tissue producers and their suppliers are a critical part of planning visibility and inventory reliability.
Seven pillars of supply security
With supply security and stability so important, European producers want supply partners with resilient operations and proven logistics expertise, but also ones that understand their unique business needs and goals. With its global expertise and experience, UPM Pulp secures and stabilizes pulp supply for its customers in seven key ways:
Multi-mill operating model: UPM’s operations ensure supply resilience by not relying on a single mill: as we have more than one mill in both Finland and Uruguay, in the event of temporary disruption to one mill we can serve capacity from the other. For customers, our model helps reduce exposure to localized disruption without compromising tissue performance, as our mills within each region produce fibres of the same grade.
Multi-route capability and capacity: Supply security is, at its core, about ensuring customers receive their goods in the right quantity and quality, on time, in the right place. To complement UPM Pulp’s multi-mill platform we have developed a flexible multi-route logistics network. We can route or reroute cargos with agility, flexibility and confidence across seas and trade routes, avoiding delays and maximizing efficiencies. Smart digital planning enables us to store some pulp supplies in strategic locations to ensure continuity of supply. As well as enabling us to deal with contingencies and disruption, this capability means we can seamlessly adjust to spikes in demand.
Continuous operational reliability: UPM Pulp prides itself on running safe, reliable and productive mills. To maximize production, our mills typically run continuously – upholding consistent technical quality to reduce potential product variation across complex multifibre operations. In order to prevent unexpected downtime, the mills undergo planned maintenance shutdowns to maintain or improve production efficiency, safety performance and environmental impact.
Dedicated logistics and operations: UPM is continually strengthening its infrastructure through sustained investments in road networks and operational improvements, supporting more efficient supply to and from our mills. One example of this is in Uruguay, where we operate a specialized 24/7 deep-sea terminal in the Port of Montevideo which operates continuously with around 100 people working in three shifts. For the railway linking the Montevideo Port to UPM’s inland Paso de los Toros mill (opened in 2023), dedicated pulp wagons designed exclusively for this operation ensure the railway delivers energy consumption four times lower than road transportation. UPM Pulp continues to seek efficiencies and CO2 reductions across our logistics network, including the introduction of seven new Liquified Natural Gas (LNG) vessels over the last three years on European routes, reducing emissions by 25%.
Proactive risk management: A supply chain, like any chain, is only as strong as its weakest link. UPM has built a strong logistics partner network with long-term, trusted relationships with suppliers. We encourage and support them to drive continuous improvement. With this in mind, all of our external suppliers are audited and monitored against the UPM Supplier Assessment Criteria. This outlines our requirements and expectations for current and potential suppliers, establishes the desired level of supplier performance and steers both UPM’s supplier management efforts and our suppliers' development work. Some of the category-specific requirements cover aspects such as environmental performance, social responsibility, safety, and reporting, while regular supplier audits verify suppliers’ compliance with the UPM Supplier Assessment Criteria. Sustainability is an important part of this.
Certified sustainable raw materials: All UPM Pulp fibres are completely traceable, giving our pulp customers confidence and peace-of-mind. Our transparent sourcing and clear management principles ensure EU Deforestation Regulation (EUDR) compliance and that we meet global certification standards. We provide verified proof of our sustainability credentials through a suite of certifications, statements and transparent data sets. All sourced wood and pulp are FSCTM or PEFC certified or compliant with controlled wood standards, protecting supply continuity from regulatory risks. We’re also resolutely committed to helping our partners and our customers with their own sustainability initiatives and reporting. UPM’s ‘-30 by 30’ program aims to reduce emissions from purchased materials and logistics by 30% by 2030.
New technology innovation: UPM’s commitment to innovation extends to its supply security strategies; we are constantly investigating new technologies and solutions to strengthen supply chain resilience. Our aim to improve our customers’ digital journey is accelerating our own digitalization, in both internal and external processes. We are actively building integrated forecasting processes with logistics suppliers to better align capacity with demand, ensuring reliable supply and improved security for customers. UPM’s operations generate huge amounts of data, which is processed by advanced analytics in order to drive smarter logistics planning, which in turn helps reduce disruption risk, while supporting sustainable supply chain practices. With supply security front-of-mind, IT resilience is central to our business continuity and supply chain risk management frameworks.
Underpinning all of these is UPM Pulp’s long-term forward-planning and forecasting – always at the heart of our thinking and operations. Our commitment to proactivity in logistics planning and supplier management ensures we can avoid bottlenecks and be flexible when contingencies arise. We’re continually improving transparency – for example by expanding the functionality of our customer portal which allows customers to see the status of their delivery in real-time – and actively looking for opportunities to increase digital collaboration throughout the logistics network.
UPM Pulp is very focused on predicting and solving regionalized challenges. In Europe, for example, carefully selected, long-term logistics partners help ensure reliable road transportation even in the face of tightening trucking capacity. UPM Pulp applies thorough due diligence in selecting our partners, building a secure supplier base that can withstand potential capacity constraints and support continuity in European deliveries.
Reducing risk across critical decisions
Supply security inevitably goes hand-in-hand with product quality. Tissue producers often optimize their machines and products around particular pulp grades and fibres. Inconsistent supply may mean producers have to substitute with alternative grades, affecting the attributes of the end product or the performance of machines. All of this means that European tissue producers place great value on suppliers who combine consistent, reliable pulp products with proven strength and flexibility in operations and logistics.
UPM protects pulp supply security by operating proprietary nurseries and plantations and utilizing specialized – and often proprietary – logistics infrastructure (such as the deep-sea terminal in Montevideo, Uruguay). We invest in regular mill maintenance and robust supply chain traceability, enforcing strict requirements on our suppliers. We are committed to sustainability, maintaining a balanced global footprint. Above all, our multi-mill model protects continuity in the event of any disruption, giving customers confidence in our supply capability and capacity.
The strength and resilience of our relationships, coupled with our strategic control of all aspects of the fibre journey, mean we are ideally placed to help our European customers lower risk, protect reputation – and have confidence in their future planning.
FSC C014719, PEFC/02-31-80
