Metsä Tissue keeps its focus on steady, sustainable growth

Petri Helsky took up the post of CEO at Metsä Tissue in May 2015. Previous to joining the company he had worked for many years in the chemicals business with companies such as Kemira, Solvay, Finnish Peroxides and Dow Corning in positions of increasing responsibility. He was therefore very familiar with the paper industry due to extensive experience in the pulp and paper chemicals sector with those companies.

Hugh O’Brian

What are the main markets that Metsä Tissue is working in?

Petri Helsky: We are one of the leading suppliers of tissue paper products to households and professional users in Europe, as well as being the market leader in Northern Europe and Central Eastern Europe. We are also the world’s leading supplier of baking and cooking paper products. So you can say that in the tissue business, we have our main focus in Europe, North of the Alps, while in baking and cooking we are global. We have four strong brands in the European markets in the consumer tissue product category: Lambi, Serla, Mola and Tento. Lambi and Serla are traditionally powerful brands in the Nordic countries, whereas Mola and Tento are serving markets in Central Eastern Europe. We also have the strong SAGA brand in the baking and cooking paper products category. In addition to this, our Katrin away-from-home tissue brand offers products and solutions that bring well-being and functionality to public washrooms, industrial workplaces, hotels, schools, restaurants and healthcare environments.

So are you more focused on branded tissue or private label?

Petri Helsky: In our business, both branded product and private label products play a significant role. Traditionally, private labels have had a strong foothold in Germany, and that still applies. In the Nordic countries, private label products are not playing such an important role. Note that this is applicable not only for the tissue category, but for many other grocery categories as well.

Have you made any substantial changes in the organization since you became CEO, and if so, what are they and why did you make them?

Petri Helsky: The company was already in a good shape when I joined it last year, so no dramatic changes were needed. However, we did fine-tune our organization a bit at the beginning of this year, and it is now based on four Business Units: Consumer Nordics, Consumer Continental, Away from Home, and Baking & Cooking. This new set up enables us to put more focus on our key customer segments and boosts our product and offering development. We have also strengthened our customer service through a dedicated supply chain team. We want to be the best partner for growth to our customers. To do this, we will keep the strong local focus that we already have but will also develop our product offering both in Tissue and Baking & Cooking in close collaboration with our customers.

What are the biggest challenges facing you and Metsä Tissue today?

Petri Helsky: In the tissue and baking & cooking business, as in all industries, we need to constantly drive for efficiency. So we are ensuring that all our operations are run cost-efficiently and in a sustainable manner. I would not call this a specific challenge, but surely something we need to keep our eyes on.

What is the ownership structure of Metsä Tissue?

Petri Helsky: Metsä Tissue is part of Metsä Group, which is owned by 116,000 Finnish private forest owners. Metsäliitto Cooperative is Metsä Tissue’s biggest shareholder with 91% of the shares, and the rest is owned by Jozef Antosik who has 9% of the shares.

What synergies do you get from being part of the Metsä Group?

Petri Helsky: It’s a great asset for us to be part of the Metsä Group because it means we can manage the entire value chain sustainably. The wood that is used for the pulp comes from our owners’ sustainably managed forests, and the pulp is produced in our own mills. This way we thoroughly know the origin of the raw materials and the operation of the entire production chain. Our operations and finance are built on a solid foundation, so we have the necessary financial resources to continuously develop our products, operations and production units. Our deliveries are dependable throughout the production chain. And we have a long history and a sound ownership base. All of this makes us a reliable business partner with in-depth knowledge and extensive experience of the tissue business and baking & cooking paper business.

How large a role does sustainability play at Metsä Tissue?

Petri Helsky: Sustainability and environmental issues are extremely important for us, both in Metsä Tissue and in the Metsä Group. We have worked hard to integrate environmental management into our entire range of business activities. Our main raw material is renewable wood from sustainably managed Northern forests. We always use the best available technology in our production processes, both to reduce environmental impact and also to ensure the safety of our employees. So we are committed to conducting our business in a responsible manner and taking into account the social, environmental and economic impacts of our actions, with the objective to contribute to people’s well-being through our products and practices. We strive to minimize the environmental impacts of our operations and products throughout their life cycle. This goes from sourcing of raw materials to production and consumption, right through to disposal. In the production process we work to use our energy, fiber and water resources in the most efficient way possible. For energy, we are reducing the total amount consumed, and also increasing the use of non-fossil fuels coming from environmentally sound sources such as biomass and production waste. Furthermore, we act to minimize effluents by reducing the amount of water consumed and by improving biological effluent treatment processes.

Do you have some examples of progress in this area?

Petri Helsky: One concrete example of our ongoing sustainability work is our participation in improving the community water purification in Raubach, Germany. We are investing in modernizing the community water purification plant, with the aim to upgrade and strengthen the waste water treatment capacity. The plant treats the waste water both from the Puderbach municipalities and Metsä Tissue Raubach mill. The upgraded plant will be able to serve the growing water purification needs more efficiently and sustainably by utilizing the latest technology. This will increase capacity, improve the environmental aspects of the operations and also significantly reduce the operating costs. Metsä owns approximately one-third of the water purification plant and we are investing over four million euros in the project. The work is currently ongoing and will be completed in 2018. Logistics is another clear example of our everyday sustainability work. Efficient supply chain management is one of the cornerstones of our business strategy. Our tissue mills are located close to our raw materials, consumers and partners, thus minimizing the need for transportation. We favor railways and waterways and work only with transport companies that are either ISO certified or at an advanced stage in the certification process.

Are you using both fresh fibers as well as recycled fibers in your products?

Petri Helsky: Yes, we use both fresh and recycled fibers in tissue production. In some products we can use either grade, while in other products we can use a mix of both grades – depending on the desired product features and costs. In baking & cooking products, we use only fresh fibers.

Have you made any capital investments in production capacity such as paper machines or converting lines in recent years? 

Petri Helsky: We have strengthened our capacity in Mariestad, Sweden, with a new converting line. And we’re updating the Paper Machine 1 in Raubach, Germany. We have also increased our converting capacity in Germany and Poland by transferring some converting lines from Russia. Currently we’re also increasing our baking & cooking capacity in Mänttä, Finland.

How do you see business conditions going forward?

Petri Helsky: All in all the outlook is positive, as the demand for tissue and baking & cooking papers is expected to continue to grow steadily in all market areas. We believe consumption of tissue products will increase especially in the Central Eastern Europe area and we also see rising demand for baking & cooking papers in Asia. The demand for tissue products is increasing hand in hand with the improving standards of living and increasing requirements for better hygiene. We can clearly see that as overall standards of living rise, the consumption of tissue products also goes up – people buy more tissue products and want better quality, for example thicker and softer toilet paper. However, at the moment some of the different actors are investing heavily in new tissue production capacity. This means the European tissue market may be facing an overcapacity situation, which is never healthy for any industry. *

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