Summit Notebook

Exclusive look inside Sweden’s greenest paper mill

For most of us, printing e-mails or making copies is just part of the daily routine in the office. But, the paper we use does come from somewhere. Last week, we had the opportunity to visit Stora Enso’s Nymolla Mill in southern Sweden to get an exclusive look at how MultiCopy paper is made. Nymolla is an integrated mill (it produces pulp and paper on the same site) and most of the wood used is sourced locally. Also interesting, the mill is the only one I could find in the world that emits zero carbon dioxide from fossil fuels during the paper making process. Check out my look inside the Nymolla Mill.

Inside Sweden's greenest paper mill from Reuters TV on Vimeo.

Paper executive would rather not shake on it

When it comes to hygiene, Hannu Kottonen is one executive who practices what he preaches. As the man who heads Metsa Tissue, a company that produces products ranging from tissues to toilet paper, he knows a thing or two about how germs spread. So when he visited the Thomson Reuters office in Helsinki to take part in the annual Reuters Paper and Packaging Summit, perhaps we should not have been surprised when he declined to shake the hands ot the various journalists assembled there.

We didn’t take it personally and Kottonen explained that hygiene was an issue that had not been given due attention. But some of that seems to be changing. Metsa Tissue is seeing more demand for some hygiene-related products as a result of the H1N1 flu outbreak and all the attention on hygiene it had generated. And it’s not the only such company. Another Finnish specialty paper producer, Ahlstrom Corp, reported a similar trend, with more demand for the material that goes into face masks and for sanitary wipes.

Kottonen said in a Reuters news story, ”Too many consumers, even officials, have taken hygiene for granted… This sort of pandemic exposure risk is highlighting the importance of good hand hygiene.”

Whitelines looks to change the “function” of paper

A group of Swedish entrepreneurs says its Whitelines product is the biggest innovation in paper since the Medieval Ages. Whitelines designer Olof Hansson says that not only is it easier to read what’s written on the pages but it is also producing paper that is socially responsible. Check out the story:

Welcome to the 2009 Reuters Paper and Packaging Summit

The global paper industry has struggled for more than six years to claw its way out of a slump, as soft demand and overcapacity have kept prices down, leading to poor earnings, production curtailments and layoffs.

The current global downturn has further eroded demand for basic materials, including paper, as print advertising has dropped steeply in the crisis. Companies have been forced to run just to stand still, temporarily or permanently shutting mills and axing staff.

The sector is now at a crossroads. Will businesses after the recession look roughly the same, only smaller? Will demand ever return when electronic books and newspapers are surging? With many forestry companies big producers of biomass, what role will green energy play in the future?

Paper makers bet on sector despite clouds ahead

Despite the dark cloud hanging over the forestry sector, most industry leaders said they still see the paper business as a good investment.

Overcapacity has kept a lid on paper prices for years, while increasing costs of wood and energy have eaten into the paper makers’ already low margins.

But when asked where they would invest 50,000 euros ($74,330) in stocks other than their own, the participants at the Reuters Paper Summit said the forestries is where they would put their money.

“The good companies will come out of the storm stronger than they were ever before,” said Jouko Karvinen, chief executive of the world’s top paper and board maker Stora Enso.

Karvinen said there has been a silver lining to the “perfect storm” of bad news.

“There may be a good thing with this storm; maybe we will finally get our act together and make decisions that need to be made and start making some real money one day,” he said.

The rapidly growing demand for paper products in China and Latin America’s wealth of fibre were a key argument, the executives said.

Huhtamaki CEO tells how to lose one’s shirt

Combining paper and packaging production may seem like the obvious union, but head of Finnish packaging maker Huhtamaki said it proved time and again to be a money loser and his company will not go that route.

Huhtamaki manufactures a wide array of food and beverage packaging and other packages for industry. It buys raw materials from forestry companies and converts them into packages.

“Over time, paper and packaging companies have been together in many instances, and in most cases they lost their shirt in this combination,” Huhtamaki Chief Executive Jukka Moisio told Reuters Paper Summit in Helsinki.

Moisio said Huhtamaki would remain a converter and not get into the basic materials business of the pulp and paper companies. “One has to be pragmatic.”

While paper making is a global business, producing packages is local because it makes no sense to transport packaging around the globe, he said.

“From the logical point of view and how you operate, the paper industry is global, so you make paper reels … and that can travel to Asia or back. (When) you make packaging, you have to actually respect that the packagings cannot travel very long. So you actually have almost an opposite way of looking at the world.”

Moisio said that Huhtamaki’s strategy is to focus on the areas where it has knowhow and competitive advantages and to follow its customers around the world to places where it can supply them locally. “Packaging is a multi-local business,” he said.

No mangoes, no cappuccinos without packaging

If you think that packaging produces loads of unnecessary waste, think again, says head of ice-cream and fast-food packaging maker Huhtamaki.

Chief Executive Jukka Moisio told a Reuters Paper Industry Summit in Helsinki that packaging a product actually reduces the amount of waste used rather than creating it.

“If you think about the food chain all the way from where you grow the food to the ultimate consumer, if you don’t have a packaging, the waste rate all the way from the field to you or me will be huge. If you look at the end situation of any cup of coffee, you see that the carbon footprint used by the packaging of any cup of coffee is insignificant compared to what the cow does,” Moisio said, explaining that adding milk is more damaging to environment than the rest of the product.

In most cases, packaging is actually beneficial to the environment, he said. “If you do it the other way round, you take the packaging away, you take the carbon footprint of the packaging away, but you create a significant waste along the way before the product meets you.”

For the green-minded among us Moisio had the least polluting solution: “Our alternative in that case is that, if we don’t want to use packaging, then we need to dismantle the big cities and go back to the fields. And we don’t have waste if we pick up the potatoes and eat them in the village we live in.”

But there is a risk the products might never reach you at all.

“If you grow mangoes in India, if you don’t have any protection or packaging for mangoes, you won’t get them out of India. And you will not even get them from the fields in India to the people in Mumbai. That would be the biggest waste.”

No gain without pain for European paper makers

The current slew of bad news was necessary to get European forestry companies to act, the head of the world’s top paper and board maker Stora Enso said on Wednesday.

For years the European paper industry has suffered from overcapacity, which has kept a lid on prices, while increasing costs of wood and energy have eaten into already low margins.

But Stora’s Chief Executive Jouko Karvinen, speaking at the Reuters Paper Industry Summit in Helsinki, said there has been a silver lining to the “perfect storm” of bad news.

“The good companies will come out of the storm stronger than they were ever before,” he said.

“And as bad as the past eight years have been, and as much as we complain about every possible problem right now, I have one thought: there may be a good thing with this storm. Maybe we will finally get our act together and make decisions that need to be made and start making some real money one day. It will take a little time, but that’s the goal,” he said.