Södra: In tissue for the long term

Sales to the tissue market now account for almost half of Södra’s Cell’s total pulp deliveries. In a bid to consolidate its position as a global supplier to the tissue sector for the future, Södra has an ambitious strategy to expand capacity, optimize quality and improve energy and environmental efficiency even further.

Marcus Hellberg

In 2004, tissue represented just 21% of Södra Cell’s pulp sales. Today that number is 43% and one in four toilet rolls in Europe is said to contain pulp from Södra. In the face of declining demand for graphic papers and an influx of hardwood fibers from the Southern Hemisphere onto the market, Södra has chosen to concentrate on premium softwood pulp grades with a clear focus on helping customers achieve their maximum potential in their own markets. Under the guidance of CEO Lars Idermark, the company is currently implementing a strategic vision based around ‘the next-generation forest company’ – a long-term approach for a sustainable future which looks beyond existing parameters to add value for both itself and the company’s customers. Idermark has emphasized the need for a strategy that will create conditions for long-term and profitable growth. Not least is the aim to consolidate its position as a leading supplier of market pulp for tissue producers. Underpinning this is the extensive investment program for all three of the company’s pulp mills to increase competitiveness, both in terms of capacity and quality. At the same time, however, several other initiatives will complement the expansion, with continued investment in innovation and product development, a tighter corporate identity, new branding and important work on environmental reporting and targets. It is all designed to offer the customer more value from the forest than ever before.

ONE SUSTAINABLE SÖDRA. To summarize, according to Marcus Hellberg, head of Sales and Marketing, it’s about how a group of forest owners use their assets to make a premium pulp for tissue in the most sustainable way possible. Södra is a cooperative of around 50,000 forest owners who together make up the largest private landowner in Southern Sweden. The average Södra member (Hellberg himself being one of them) owns around 66 hectares of forest. Many have held the farm in their family for several generations and will pass it on to their children who in turn will pass it on to theirs. Hellberg, for example, is the sixth generation of his family to own his 28-hectare farm. Södra provides the services and support to manage the farms to the highest environmental standards, balancing sustainability with economics. Since 80% of members’ wood goes straight to one of Södra’s saw mills or pulp mills in Southern Sweden, the company’s supply of raw material is secure, and managed and planned meticulously from source. This means that it can guarantee predictable and consistent fibre quality, as well as a wide portfolio of end products. For tissue customers, it means that the company has an exceptionally tight control over its raw material sources. This gives Södra the chance to hone different fibers to different applications, to develop increasingly specialized pulp grades and to offer peace of mind on sustainability issues. Processing facilities have remained close to the fiber source, in Southern Sweden, and to date the majority of the company’s customers remain in Europe. But Södra recognizes that to be able to grow with its customers, it needs to be able to consolidate its position globally. A new sales structure is already in place with an administrative hub in Munich to serve the growing customer base which will result from the expanded mills. Hellberg: “Although the pulp mills already produce some of the highest quality pulps on the market today, with their properties carefully crafted to suit a variety of applications, all three are being upgraded at a cost of around USD 600 million. Capacity will be expanded to 1.8 million tpy, but importantly, the emphasis is on quality and consistency as much as quantity. Södra’s aim is to ensure it can deliver a premium pulp quality for tissue that is second to none.”

QUALITY, NOT QUANTITY. The largest share of the investment is at Värö where a new line will start up in the third quarter of 2016. The expansion will increase the mill’s annual pulp production capacity from 425,000 tpy to 700,000 tons. The chip plant is being upgraded and a new digester installed which will enable both ECF and TCF bleaching. Energy efficiency and supplies of green energy will also increase. Mörrum, meanwhile, is the subject of a two-stage upgrade which includes a new chip plant, with separate units for the processing of softwood and hardwood raw materials. The pulp lines will gain an upgraded pulp washing system and optimized fiber process. Stage two will include a new evaporator and increased production of textile pulp. The overall ambition is to increase the mill’s annual paper pulp capacity from 250,000 ton to 300,000 ton, and textile pulp capacity from 130,000 to 200,000 tons, while leading to overall improvements in pulp quality and consistency. Mönsterås is the Group’s largest pulp mill with a capacity of 750,000 tpy. The upgrade is focusing on more efficient energy use and increased productivity at the mill. It includes a new wash press, a new reactor for pulp bleaching and an expanded evaporator. Plans for a new feeder and water management system in the wood house are also underway, as well as a new biofuel feeding system for the lime kilns. The investments will contribute to more cost-efficient production and an improvement in pulp quality.

TOWARDS THE CIRCULAR ECONOMY. “There has been a lot of talk about pulp mills transforming themselves into bio refineries lately, but this really is old news for us,” says Hellberg. “We installed our first turbine to produce green electricity in 1958. The bio refinery concept has long been an integrated part of Södra’s strategy. In fact, Södra is now the largest producer of green energy in Sweden and we are constantly looking at ways to get more from the forest in addition to the many by-products we have today, such as tall oil, pellets and district heating. Of course, none of these by-products could exist without the pulp process and pulp is and will remain our core business. But the expansion project will consolidate our energy position yet further. It’s about offering the whole package.”

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