Metsä Tissue, a producer of tissue papers, paper hand towels and greaseproof papers for baking and cooking, has seen mixed results amid the pandemic and the ensuing business restrictions. Nevertheless, CEO Esa Kaikkonen believes that once the coronavirus crisis subsides, the company will do better than ever.
The spring brought long-awaited cheerful news images of the restrictions on being lifted around the world. Esa Kaikkonen, CEO of Metsä Tissue, was also delighted to see these images.
“I must admit that seeing pubs in Britain welcomed quests back in April was one of the highlights this spring. Around one third of our products are consumed when people use services away from home,” he explains.
New growth opportunities
Luckily, the pandemic did not cause irreparable damage to Metsä Tissue, known for its brands such as Katrin, Lambi, Serla and Saga. In fact, the coronavirus offered the company many new growth opportunities – especially in hand hygiene.
“People increasingly dry their hands with paper outside the home, and it’s something that the health authorities also recommend. The video of Ursula von der Leyen, President of the European Commission, washing her hands, was also good publicity,” says Kaikkonen.
Since spring last year, public facilities and toilets all around Europe have been enthusiastically fitted with Katrin paper towel dispensers in place of hot-air hand dryers that disperse viruses and bacteria. The use of tissue paper has increased in health care as well.
“The pandemic also changed the market in greaseproof papers. Demand plunged in professional use because of restaurant lockdowns, but the increase in home cooking and baking boosted the demand for greaseproof papers. Now we hope that the home cooking and baking boom will continue,” says Kaikkonen.
“In the case of papers used outside the home, we just have to wait for the situation to continue to improve and for societies around Europe to open up. We expect sales to start to return closer to normal from this summer onwards,” he adds.
Less attention to recycled fibre, digital leap in distribution
At Metsä Tissue the pandemic’s impact on consumer behaviour has already been investigated as part of its strategy work. This has also included modelling possible scenarios of the world post-coronavirus.
In addition to improved hand hygiene, the operating environment is influenced by digitalisation, which according to Kaikkonen, will affect the company through its raw material and distribution chains. As a consequence of remote working, the use of office paper has reduced considerably and the supply of high-quality recycled paper has declined in the main markets.
“In line with our strategy laid out before the pandemic, we are increasingly focusing on fresh fibre - sustainably and locally produced fibre instead of recycled fibre. The shares of the fresh and recycled are currently around 50/50, but in the future, the share of recycled fibre will drop markedly,” Kaikkonen explains.
Large investments, such as the ones made in Mänttä in Finland and in Mariestad in Sweden are important steps on Metsä Tissue’s chosen path. In Mänttä, the production capacity for tissue paper made of fresh fibre will be increased by 6,000 tonnes, and the mill’s energy and environmental efficiency will see a notable improvement.
“The investment will energise and boost activities in Mänttä. Mariestad is another investment that will increase the use of pure pulp and improve the sales of branded products. We aim to double the mill’s production,” says Kaikkonen.
Digitalisation also mobilises the company to enhance its distribution chains. E-commerce has grown steeply in consumer markets, and professional distribution customers are also turning to online channels.
“We must therefore enhance our integration with digital tools in our commerce and distribution chains. This will also offer us data to help us more closely monitor consumer behaviour and plan changes in our future activities,” Kaikkonen explains.
A unique story resonates with customers
According to Kaikkonen, reducing the use of recycled fibre poses certain threats, but also offers great opportunities. Metsä Tissue is still the only player in the field capable of opening and verifying the entire production chain from the forest to the end product.
“In many instances we compete against products made of recycled fibre or ones coming from far away. However, we can honestly say where the fibre for our product comes from, how it has been produced and how it has been grown. This is more and more important for consumers, and none of our competitors can yet match us in this respect. Metsä has a powerful and interesting story to tell,” Kaikkonen points out.
Another advantage is the extensive certification of Finnish forests and in Finnish forest assets being transferred from one generation to another, ensuring that they remain in safe hands.
“Our owners control more than five million hectares of forest, which promises continued good growth in the future. The fact that we have taken part in fighting the pandemic and can also help prevent the spread of future pandemics is also positive. Here too, Finnish pulpwood has been put to great use in the form of tissue paper.”