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Valmet on a roll as Metso demerger pays off

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Valmet on a roll as Metso demerger pays off

December 15, 2014 - 05:32

BRUSSELS, Dec. 1, 2014 (PPI Magazine) - It seems there has been some sort of transformation at Valmet since it unbolted itself and became a separate entity from the Metso Corporation. The new Valmet seems to have - in the space of just nine months or so - transformed itself from a slow moving corporate caterpillar into a rather energetic, colourful and autonomous butterfly. And the new clean, green livery, seems to reflect perfectly the new energy and colourful array of sectors and products the company is continuing to immerse itself in. 

The vibrant city of Berlin was perhaps the perfect choice for the first of Valmet Customer Days being as it is a city of glamor as well as having an underlying bedrock of a hard work ethic. The organizers made sure that attendees had a bit of both, with days full of activity, and nights at full of networking opportunities at interesting locations around Berlin.

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Lots of opportunities - but let's be sober 

The program itself concisely reflected that the company is intent in maintaining a leading position in pulp, paper, board, energy and anything else that might be derived from a tree, including biofuels and chemicals. 

The first day kicked off with a keynote from industry expert Peter Berg, who carries the important title of director of knowledge for Paper & Forest Products at consultants McKinsey & Company. Berg took a high-up satellite view of the whole industry with his presentation entitled: Developing the New Bio-economy - the Role of Pulp, Paper and Energy. I always find these types of presentations enthralling and inspirational when you see just how many opportunities there are for this industry, and in fact Berg enthusiastically describes the industry as "a wonderful world of possibilities". However, he soon sobered the audience up by presenting some facts and figures that brought us all back to earth on the subject of bio-energy. "The fact of the matter is," says Berg, "there is a lot of opportunity in green energy, but to really compete, for instance with fossil fuels, cost has to be driven right down, and the industry is nowhere near being the low cost provider that gas and oil currently are - yet. 

Other opportunities are there says Berg, in the shape of bio fuels, but again, reaching the volumes is just not going to happen if we want to follow the roadmap to reducing CO2 emissions. "Much better that CO2 is locked up in wood for construction than using the whole tree to extract bio fuels, it just does not make sense." 

Lignin and the car manufacturers 

There seems to have been a lot of excitement generated by UPM's Biofore Concept Car in the industry recently, despite the fact that there are no plans to go into mass production of the vehicle. But seemingly as a salute to the concept, as well as highlighting existing opportunities in the area, Valmet brought in a R&D expert from the mass production car maker Volkswagen to get its take on where fiber fits into its production plans. It turns out that is a division specifically for fiber, and there is huge enthusiasm from VW to use lignin to make carbon fiber body shells, as well as a myriad of other suitable components - and not because it is from a renewable source. Hendrik Mainka, from the company's Group Research, Materials and Manufacturing Processes, New Fiber Systems explains: "We have a very steeply targeted plan in Germany to reduce CO2 emissions from cars down to to 20 g/km per car in 2050. At the moment average emissions are around 120 g/km. We have a lot of work to do as manufacturers." 

One of the ways car makers are going to help reach this target is by lightweighting cars, and it so happens that lignin derived from trees is actually a price competitive alternative to that derived from fossil fuels. Mainka continues: "As a producer such as VW, cost is very important, and we have discovered that carbon fiber made from lignin is the perfect solution to cost-competitive lightweighting. We are carrying out extensive research on using lignin based carbon fiber, as well as using lignin powder as a filler for thermoplastic, automotive lightweight components." 

Interestingly, Mainka in his presentation didn't mention the fact that forest based lignin is also from renewable sources - what a fantastic marketing story that will make when the prototype VW finally gets into full production - which looks like 2018. 

Back to basics - maintenance 

The opening program then went back into the making of paper, which of course could never be ignored at a Valmet conference. This time the very enthusiastic and energetic, Federico Asensio, R&D&I director at the Saica Group, took to the stage to talk about maintenance - not usually the most exciting of topics at these events. 

But actually, the concept that Saica and Valmet have come up with at its UK Partington site is extremely intriguing. They call it the "Global Service Maintenance" agreement, which essentially means that Valmet takes full responsibility for all maintenance on everything within the mill fence, from power generation to winder. And with that responsibility comes full accountability as well, i.e. if the paper machine doesn't run, Valmet doesn't get paid. 

In fact the whole emphasis at the mill is production based on saleable tonnes of paper, and if production is high - hits target and beyond - Valmet shares in the successes, and then the reverse is true as well, if there are stoppages, or other problems, there are penalties. But does the agreement work, and is it showing a difference to the bottom line? Asensio says: "We are delighted, it works well, and production at the mill is fantastic! We are in a market that sells commodities - we don't just compete on price, we compete on service and quality, and one of our major costs in maintenance. 

"With this agreement, we can all work on reducing the cost per tonne, we can look at all aspects of the mill, and make sure that we are maximizing efficiencies across the board." 

Moving forward 

Pasi Laine, CEO of Valmet also took to the stage in the opening program in Berlin, and was in relaxed mood, even smiling and laughing with the audience, looking for all the world that he was actually enjoying being head of one of the largest suppliers to an industry that has undoubted challenges. And the fact is, now that Valmet has unshackled itself from corporate bonds, it is able to be more flexible and to concentrate its resources on the areas where its customers need it most. Laine gave the usual corporate presentation you would expect, but was keen to emphasise that it has been a fantastic start for the young company, which has a full order book, and rafts of innovation going on in all areas. 

To the pulp and paper people Laine said, "Pulp and paper is such an obviously sustainable product and industry to be involved in, we have worked for many years through Valmet, then Metso and now Valmet again to make sure you get the best technology for producing paper and board, for printability, and sustainability, and that will of course continue." 

Valmet is of course also responding to changing economies, particularly in the US where things look to be brightening up when it comes to investment. Could part of this be that the graphic paper industry has finally hit the bottom there and we can all look forward to the same trend coming over the Europe? "It is a little too narrow to say that graphic paper is coming back in the US, however what is happening is a change of mood when it comes to investment. Energy prices have gone down, and the management at various companies have decided that the time has come to invest". 

And what about the bio-economy in Europe, does Laine believe there are opportunities? "This is an exciting area, and some of our customers are doing huge amounts of work in bio-power, bio-energy and bio-fuels and it must be remembered that it is you, our customers who have a lot more experience of handling wood and forest products than any oil or chemical companies might have. So take on the opportunities and challenges being presented, we have the technology to make it work," Laine told the Berlin audience. 

As well as presentations from Valmet's experts, the customer days also saw presentations from the CEO of Sappi Fine Paper Europe, Berry Wiersum, and CEO of Progroup AG, Jürgen Heindl in the Paper and Board sessions. In the Energy section, Rafal Kuleza vice president of Stora Enso Narew and Jussi Laitinen, managing director of Tampereen Sähkölaitos (City of Tampere, Electrical Power) gave presentations. In the Pulp session, Adriano Canela, projects and innovation director, Suzano Pulp and Paper and Humphrey Landman, technical services manager at Sappi Ngodwana also spoke. 

On day two, reference visits were arranged by Valmet to Propapier's PM 2 and Zellstoff Stendal and Szczecin power plants. 

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