Pulp and paper equipment producer Andritz has been growing in the tissue sector and broadening its product line. It recently entered the TAD sector and is also adding a new compact tissue making unit to its lineup. We spoke with two top executives at the company to find out more.
Perini Journal
Andritz has a rich and varied history dating back to 1852 when a man by the name of Josef Körösi established a foundry and machines works in the village of Andritz which is today a suburb of the charming city of Graz in southeast Austria.
A major part of the company’s business over the years was based on water wheels and turbines which turned water flowing from the nearby Alpine rivers and streams into mechanical power for industry. In fact, located in front of the headquarters building today is a steel water turbine symbolizing the company’s roots in that business. Over time pulp and papermaking equipment was added to the list of products made at the Andritz factory.
In 1990 Andritz initiated a change in strategic direction especially in pulp and paper, when it moved from being a licensee for other machine manufacturers to its current position as full-line supplier of its own technology and processes. Thus began a major growth spurt, based on complementary acquisitions and R&D, in which Andritz has grown to be one of the largest suppliers to the pulp and paper industry with sales in 2004 of approximately Euro 1.5 billion and almost 6,000 employees around the world.
Since 2001, Andritz has been listed on the Vienna Stock Exchange. A 26% share of the company is owned by CEO Wolfgang Leitner, with other Managing Board Members owning approximately 2% of the shares and the remaining 72% held by institutional and private shareholders.
As it has grown in the past 15 years, Andritz has added some of the most famous brand names to its portfolio of fiber processing equipment. Figures 1 and 2 show the growth of the company in recent years and the brand names that have been acquired.
BUILDING THE WOOD-TO-PAPER CHAIN. The growth has been impressive. Since 1992 the company has shown 12% compound annual growth, both through organic development as well as acquisitions. The company has had a strategy of building an entire fiber processing line from wood to paper. It has also strictly avoided buying any competitors, only purchasing companies which add complimentary processes in the wood-to-paper chain. Pulp and paper now accounts for about 60% of the company’s sales, with the other major business areas focused on Steel Rolling and Strip Processing; Environmental and Process Equipment; and Feed Technology for the animal breeding business. A supporting business is designated as Hydraulic Machines, mainly meaning stock pumps and turbines.
The Pulp and Paper business area is led by Bernhard Rebernik, a member of the group executive board since 1992, and Markku Hänninen, who came to the company through the acquisition of the Ahlstrom machinery. The tissue machine business is, of course, part of the pulp and paper group. Directly heading up the tissue machine division is Rudolf Greimel, senior vice president of the group.
NOT NEW TO TISSUE MACHINES. Although Andritz has been making paper machines for over 50 years, the company has been somewhat in the shadows as its tissue activities have often been part of joint ventures. Andritz worked very closely with Escher Wyss of Ravensburg, Germany, for many years in the tissue machine sector. Then, in 1995 when Voith and Sulzer Escher Wyss merged, Andritz started to focus on tissue within this group. First of all the focus was on Europe and Asia, but then in 2000, by forming a joint venture with Voith, on the North American market as well.
“Some people mistakenly thought that we were new to the tissue machine business,” says Rebernik. “The fact is that we have been making tissue machines for a long time. Back in 1973 we delivered a 200-inch wide twin-wire tissue machine designed to run on 100% recycled fiber that is still running in Europe. In recent years we have also produced many of the world’s fastest and most advanced tissue machines. So we are certainly experienced in the tissue sector.”
Indeed Andritz is the producer of many of the world’s fastest tissue machines with two machines at APP China (Suzhou) and one at APP in Indonesia (Jambi) widely seen as being the fastest crescent formers in the world, with speeds approaching 2,200 m/min.
The joint venture with Voith ended recently with the partners agreeing in late 2004 to split up. As to why the JV ended, Rebernik says there was no big problem. “Actually, it is difficult to point to any specific reason. It was, and still is, a very good and fruitful relationship. But I think both companies simply felt it would be clearer and easier to manage our businesses if we ended the JV and untangled the businesses. We are still working together on several different on-going projects through 2006.
And we can of course still work together as needed, but we do not need firm contracts and the structure of a JV. We will work together wherever it makes sense.”
TAD MACHINES TO THE USA. TAD or thru-air-dried tissue machines were recently added to the Andritz lineup. “We are now installing our second TAD machine,” explains Rebernik, “with the first one going to a confidential customer in the USA in 2004 and the second planned for Procter & Gamble in Green Bay, Wisconsin. We are committed to TAD and believe that TAD is clearly the best quality. There is simply no substitute. But of course there are energy issues these days that cause concern. We are working on ideas to lower the energy input while still producing superior quality but we are still in the early stages of that research.” With TAD in its lineup, Andritz feels it has taken a very important step. Says Greimel: “We can now offer the full product range. There are really only two suppliers that can do that today. So now we have standard crescent formers such as those running up to 2,200 mpm. Then for papers with very smooth surface and handfeel with higher bulk, we have the shoe press technology now running up to 1,850-1,900 mpm. And for the high end we have of course the TAD technology.”
NEW COMPACT TISSUE LINE. As far as the next addition to the product line, Rebernik points to the new PrimeLine Compact concept that is just being introduced. “We realized that there was one small gap in our tissue offering, at the low end. So we are launching our compact system, which is not just a machine but a standardized, small tissue-producing system. It is a whole line including stock preparation. Most of it, except the Yankee of course, can be shipped in containers.”
Set to run at either 1,600 mpm, 1,800 mpm or 2,000 mpm, the target customers are entrepreneurs or companies who want to fill demand for smaller market segments. Flexibility and simplicity are key features of the line. Comments Greimel, “This will be a very simple but advanced and cost-efficient concept. You just push the button to start up. We want to make it easy: easy to decide, to build, to install, to operate and, of course, to pay back.”
Asked if there are too many tissue machine suppliers, Rebernik is clear: “Yes, realistically there are too many machine suppliers.
So it would not be surprising if there is some consolidation and perhaps not all of the smaller ones will survive. Today the small guys are trying to enter the high end market, and of course we are entering the low end. We have to fight for all market segments and we are doing that. If you see the complete scope, there are really only two that can provide the entire range.
That is a big advantage.” Somewhat linked to this argument, Greimel points to the fact that Andritz has an important strength because it “can offer package solutions to tissue makers, not just the tissue machine. All across our product line, we can deliver a full tissue making system including stock prep, ventilation, drying, automation and power systems if needed. This capability is a big advantage for us compared to many of the tissue machine makers.”
DRY END IN FOCUS. Greimel also states that the company has recently made progress at the dry end of the machine, “between the Yankee and the reel, where the money in tissue making is made or lost. We have extensively examined possible solutions to raise efficiency from the doctor to the reel, through items such as sheet handling, transfers and dust removal systems. I think this is proven by the high efficiency and the high speeds achieved.” One of the recent developments was the introduction of the patented PrimePickup. This unique tool, which supports the exact separation of felt and wire after the forming process, made it possible to speed up the machines at Suzhou from 1,900 mpm to over 2,100 mpm. The PrimePickup provides a perfect, pinhole free sheet especially on wide machines and at very low basis weights down to 12g/m2 on reel.
Another big step was the introduction of the PrimeTakeOff. This tool, especially developed for the very soft grades on conventional and TAD machines, improves the stability of the sheet after it has been taken off the Yankee by providing support below the sheet immediately after the creping doctor blade.
SHOE PRESS MAKES PROGRESS. “We talk a lot about the good stories, of course,” jokes Rebernik, “but we also have to say that not all tissue systems were running well from the very beginning. The shoe press application, the TissueFlex, had some difficulties in the beginning and we have learned lessons from this. The fact is that the first shoe press did not really fit to the Yankee crown. In hindsight, we should have demanded fresh grinding of the Yankee but we thought we could fit the shoe press to the wrong crown. We learned from this, the hard way, but I can honestly say that we have never left a customer alone. Now the shoe press technology is mature and will soon achieve new record speeds of over 2,000 mpm.” The split with Voith has led to questions in the industry about the access to technology such as the TissueFlex shoe press which was developed during our cooperation. The technology is based on the shoe press from Voith which was originally developed for other paper grades and adapted for tissue machines.
“Let’s be very clear,” says Rebernik. “We have, and will continue to have, access to the technology which was jointly developed concerning the TissueFlex shoe press. So absolutely nothing changes in that respect. We have royalty-free access forever for the application.”
As far as the future, Andritz continues to build its assortment of pulp and paper unit operations which gives it more complete supply possibilities. Today, says Rebernik, Andritz has filled in essentially all the gaps except for the paper machines themselves, meaning non-tissue grades such as printing and writing and packaging grades. The company recently agreed to buy 60% of a joint venture of Küsters of Germany, which will allow it to undertake smaller PM rebuilds. “Frankly speaking”, says Rebernik, “the big guys go for a complete line, for example saying ‘You only get the paper machine if you buy my deinking plant as well.’
We are not going to get into the big paper machine business but we might consider entering the paper machine rebuild business. The recent joint venture with Küsters gives us a good means to do this if we decide it makes sense.”