Exclusive interview with the new CEO of Voith Paper, Bertram Staudenmaier regarding the future of one of the biggest names in pulp, paper and tissue
Renowned graphic paper machine supplier Voith Paper has been through its fair share of pain over the recent times. Job losses and cuts seem to have been the norm at the German company in recent times - the latest round announced at the beginning of the year has seen 1000 employees laid off, 800 of them in Germany and Austria. PPI spoke to the incoming CEO, Bertram Staudenmaier about the future strategy of the company and its approach to the drastic turndown in graphic paper machine orders.
PPI: 1,000 jobs does sound a lot on top of what has already been shed at Voith Paper. Can you give us your view on the current situation?
Bertram Staudenmaier: We have faced challenges caused by the rapidly changing market environment for several years, and we have already taken some action to adapt Voith Paper to these new conditions. However, the market volume for the projects business has further decreased to a lower level.
We have to deal with this market reality and thus, bundle and reduce our capacities especially in Europe which are related to the business with new machines and major rebuilds. This is a very painful, but unfortunately necessary step. Anything else would be irresponsible, not only from an economical point of view but particularly towards our employees.
The dramatic decline in demand for graphic papers has been with us for some time now, with producers noticing 6-7% drop in demand year on year. These paper producers have also been through the pain of capacity cuts, for some years now. Do you think that Voith has left this latest painful decision a bit too long? Should deeper cuts have been made say two years ago when the writing was clearly to be seen on the wall of the demand for graphic papers?
Let me emphasize one point: Voith is a family-owned, value-driven company. Laying people off is definitely the last option when we do not see any alternative. We worked in the past years very hard and did our homework: we intensified our market presence, improved our processes in operations and worked on smart manufacturing concepts. Unfortunately, we have to say today that this is not enough and that we cannot hold on to all our Voith Paper locations in Europe with the market volume given.
Can you tell us why Europe appears to have taken the brunt of the cuts? Can you talk about the other regions as well, what will happen there?
As the market volume reduction was worst in Europe, we see the biggest need for action at our locations in Germany and Austria. However, we will also do some smaller changes outside of Europe. We plan to adapt our capacities everywhere where they do not fit to the market conditions.
Can you outline the strategy a bit further for the future now? What are going to be the company’s main points of focus?
In the last months, we’ve sharpened our strategy for Voith Paper, which is based on four corner stones: a clear focus on the core operations of our customers – papermaking – and true customer orientation in everything that we do. Moreover, we will secure the further development of our technological leadership and we will continuously refine our processes to keep them on a flawless, excellent level. This is our clearly defined way for the next years.
Pulp and paper investment among producers in the US is beginning to show signs of picking up, what is your view in general of that market? What about the other markets, can you comment on Voith Paper’s position in Asia (including India and China) Latin America, and Europe (can you enlarge upon service as well?)
North America is an important market for us, especially for our products, services and consumables business. We have just won a big order for a machine rebuild there. Not only in North America, but also in all other regions we are strongly positioned and have powerful regional organizations. These are close to our customers and support them with a comprehensive approach, offering intelligently coordinated solutions from one source, for all paper grades and over the complete lifecycle.
Fiber-based packaging is beginning to be recognised by the general public (and big brands) as the way forward, and plastic is being seen as not environmentally friendly. How does Voith see the opportunities in the sector, and what work are you doing to ensure you get a stake in the future market for either new machines or rebuilds?
I believe that fiber-based packaging has a unique advantage compared to other packaging materials: It is renewable, recyclable and reusable and does not swirl in big circles in our oceans for hundreds of years. Therefore, board and packaging papers are a perfect material for a more sustainable way forward.
Our customers worldwide rely on our competence in the production of board and packaging papers. We have been very successful in this market segment in the last years and offer different production lines to meet our customers’ needs. We provide leading systems, products and solutions and we are continuously working on new ways to make the manufacturing process even more sustainable.
How is the Voith tissue business? Can you tell us about the strategy for Atmos, and other machines in the Voith range? Are you optimistic about this sector?
Tissue business is on a very good path. Its main driver is the urbanization in developing countries which is one of the worldwide mega trends. Even though we were not present in the tissue market for several years, we were able to gain a strong market position shortly after we have re-entered this segment.
Today, we support our customers with solutions for the production of conventional, premium and ultra-premium tissue grades. Besides our unique ATMOS technology, we have a range of innovative and reliable products and components like the NipcoFlex T shoe press which convinces customers worldwide with reduced resource consumption and a high quality of the finished product.
What positive message would you like to give out to your customers worldwide about the latest reorganisation and your strategy going forward? What does it mean for them?
The most important message is that we are truly and fully committed to the paper industry! Despite all challenges, this industry serves a globally relevant market with sales of almost 300 billion Euro.
For over 140 years, we have been a partner to this industry and played a leading role in the industrialization of this sector. We will continue to actively shape and promote the further development of paper technology. With Papermaking 4.0 – this is how I call the “Internet of Things” for the paper industry – we are already on the way. We focus on connected, smart solutions and processes that provide a clear added value to our customers and thus make our contribution to a competitive and sustainable industry.