Valmet's future CEO Pasi Laine believes in the future demand for pulp and bioenergy. "This will continue to be a very good industry."
CEO Pasi Laine believes that resource allocation will bring growth when Metso's pulp, paper and power generation business starts operating in a new listed company, Valmet, at the turn of the year.
The picture painted by Valmet's autumn press release about the company's near-term prospects does not give cause for celebration: demand for pulp mills and their renovations remains satisfactory, demand for power plants based on renewable energy sources remains weak, and demand for papermaking lines remains weak.
The same gloom has also been reinforced by the company's news of extensive cost cutting, which has meant significant staff reductions. In such a situation, Metso is separating into its own company, Valmet, which will focus on serving pulp, paper and energy industry customers.
Pasi Laine examines the situation calmly.
"The current situation is a continuation of what has been going on for some time. Now we are adapting to the market change, and after that we will start developing the company further," says Laine.
"More pulp will be needed in the future, packaging needs and demand for tissue paper will increase. I believe that as the economic situation in Europe becomes clearer, demand for bioenergy will also increase. This will continue to be a very good industry," Laine assures.
Market change affects resourcing
Splitting up listed companies is traditionally thought to increase shareholder value, but will the new Valmet also benefit others? Laine reminds us of cause and effect relationships.
“Shareholder value can only be created by first creating customer value. We start from the premise that Valmet is the strongest player in its industry. We are one of the few companies that focuses on pulp, paper and energy. We believe that by focusing, we can improve technologies and services so that our customer industries can perform better.”
How can this innovation of new solutions be done when Valmet has had to resort to layoffs?
“Even though we are reducing product development, we still have a large investment in product development. We are the operator that has the opportunity to operate our own pilot plant, for example,” Laine replies. He points out that it is also a matter of targeting.
"We need to direct resources to growth areas. We will reduce the resources used to develop printing papers and put more resources into product development for packaging boards and tissue papers, as well as new biotechnology solutions."
Increase revenue through innovation
Leadership in technologies and innovations has been defined as a vital condition for Valmet, as has excellent customer expertise.
"We want to bring customers new solutions for using biomass. For example, the lignin plant we have developed, which brings a new revenue stream to the pulp mill. Another example is the pyrolysis plant being built in Joensuu together with Fortum, where forest residue is used to make pyrolysis oil that replaces heavy fuel oil. With technology solutions like this, our customers get more value from the biomass they process."
Another way to improve the operating conditions of customer companies is to introduce solutions that can make products already in production more cost-effectively. Laine highlights the OptiConcept M board machine model. Thanks to the innovation, a less space-consuming, easy-to-use and quickly start-up energy-efficient board machine can be made with significantly lower total investments than currently available.
“We want to offer our customers new tools to improve the profitability of their business, even for bread.”
Valmet also plans to grow its own business by expanding its offering to include medium-width and medium-speed paper machines.
Text: Sami Laakso
Photo: Metso
