Metsäliitto Cooperative has its roots in the cooperative movement that started to establish itself Finland at around the beginning of the 20th century. Forest owners realised they could increase their bargaining power by joining forces to sell their timber. With better prices for their timber, forest owners could improve their forest management methods and thus raise the quality of privately-owned forest resources. Cooperation between forest owners also promoted the development of the Finnish forest industry, as this ensured the supply of sufficient and high-quality raw material for the needs of the industry.
The shared timber sales model that started in south-western Finland at the beginning of the 1930s led to the establishment of Metsäliitto Oy in 1934 to coordinate the export of timber. This was the first step on the road towards the present Metsä Group. During its early years, Metsäliitto’s main products were fibre wood and pit props, which were exported in an unprocessed state to Central Europe.
The company’s first managing director was Ilmari Kalkkinen, a forest owner and enthusiastic advocate of cooperation between forest owners.
Metsäliitto Cooperative is founded
Metsäliitto Oy paved the way for forest owners to work together in a formal and organised way. The company gathered together valuable experience in selling timber and built business relationships with customers in both domestic and export markets. Metsäliitto Cooperative was founded in 1947 to continue the work of Metsäliitto Oy. The intention was to invite a large number of forest owners to become members of the cooperative and sell their timber through it.
At the end of its first year, the cooperative already had 33,000 members, whose combined forest holdings totalled about 1.7 million hectares. This number meant that one quarter of all private forest owners with more than 10 hectares of forest land had already joined the organisation.
Towards higher added value
It was clear from the outset that exporting timber in its unprocessed state could not provide a long-term basis for profitable business. In response, Metsä Group decided to enter the mechanical forest industry. Metsä Group's first sawmills started operations towards the end of the 1940s. This helped to create a steady demand for logs, which other forest products companies in Finland preferred to buy from producers who were not cooperative members.
The next major step in the Group's evolution came in 1953 with its move into the chemical forest industry through the founding of Metsäliiton Selluloosa Oy. In order to launch its operations, shares were issued and a campaign was organised to encourage forest owners to invest capital in the new company. This resulted in the entire share issue being taken up within one month. The first production units to be acquired by Metsäliiton Selluloosa Oy were the Äänekoski mills, which were purchased from Wärtsilä-Selluloosa Oy. Today, these mills are owned by Metsä Board, and are still part of Metsä Group.
The period from the 1960s to the 1980s was one of growth and internationalisation for the Finnish forest industry, with Metsä Group playing a key role, expanding its operations both in the mechanical and chemical branches of the industry.
Another significant turning point came in 1987 when G. A. Serlachius Oy and Metsäliiton Teollisuus merged to form Metsä-Serla. Metsä Group, founded in 1992, includes Metsäliitto Cooperative, Metsä Board (formerly Metsä-Serla) Metsä Fibre and Metsä Wood.
International growth
Metsä Group took its first major step towards internationalisation in 1996 when Metsä-Serla formed an alliance with another Finnish company, Myllykoski Paper, to acquire three paper mills in Germany. Metsä-Serla continued working with Myllykoski until 2002.
The turn of the new millennium was a time of vigorous growth and also significant restructuring within the Group.
In 2000, Metsä Wood absorbed Metsä-Timber Ltd and Metsäliitto SW Ltd, and Metsä-Serla acquired the Swedish-based Modo Paper Ab from Holmen AB and SCA. In 2001, Metsä-Serla changed its name to M-real, and in 2012 to Metsä Board.
Currently, Metsä Group has production in a number of European countries and many of the mills acquired by the Group have very long traditions. For example, the mill located in Bergisch Gladbach in Germany started making paper in 1829, and many of Metsä Group’s other mills also started operations in the 19th century, including the Kyro, Tako, Kemi and Äänekoski mills in Finland and Hallein in Austria.
Wood procurement activities expand
The Group’s substantial growth outside Finland started to pose new challenges for the wood procurement organisation.
In 2001, Metsäliitto Cooperative acquired Thomesto Ltd, specialising in the procurement of wood from Russia and the Baltic countries. At the end of 2005, Metsäliitto Cooperative’s wood supply operations in Finland and Thomesto Ltd’s international wood supply operations were merged.
The new wood supply organisation, Metsä Forest, is divided into four geographical areas:
Finland, Russia, Baltic countries and Western Europe. Close to 80 per cent of the wood procured by Metsä Wood is purchased in Finland, mainly from members of Metsäliitto Cooperative.
On 27 September 2005, the boards of directors of Metsäliitto Cooperative and Finnforest Corporation, a subsidiary of the Group, signed a merger plan which saw Finnforest merged with Metsäliitto Cooperative on 31 March 2006. In connection with the merger, Finnforest became Metsäliitto Cooperative’s Wood Products Industry – today Metsä Wood. This merger of operations simplified Metsä Group's structure and reinforced the position of Metsä Wood as Metsä Group’s core business.
Major structural changes
In 2005, Metsä Group started determined structural change work aimed at a more unified group structure focusing on selected core businesses. As a basis for the work, a situation analysis and a plan for cutting costs were prepared. In 2006, a strategic review of Metsä Board and the first extensive restructuring programme were launched. A number of unprofitable production units not included in Group’s core business were divested. Metsä Group sold its holdings in the Norwegian Moelven Industries ASA and its forest holdings in Estonia and Latvia.
In 2007, Metsäliitto Cooperative sold its Lithuanian wood procurement company, and Metsä Board continued the dismantling of overcapacity in accordance with its restructuring programme by shutting down, among other things, the paper mills in Sittingbourne and Wifsta, the Tako folding boxboard line 2 in Tampere and two paper machines in Gohrsmühle, Germany.
Metsä Board also sold its folding carton plants in Finland, Hungary and Belgium as well as the Map Merchant paper wholesale business.
In 2008, Metsä Board closed down the BCTMP mill in Lielahti and paper machine line 2 producing uncoated magazine paper at the Kangas mill. In addition, the company sold its New Thames office paper mill in the United Kingdom and its Graphic Papers business to Sappi Limited. The sale comprised the Kirkniemi and Kangas mills in Finland, the Stockstadt mill in Germany and the Biberist mill in Switzerland.
At the same time, sawn timber production was adjusted to match the weakened demand, and Metsä Wood's Soinlahti sawmill was closed down. Pulp production was also curtailed.
New functions and ownership arrangements
In addition to divestments and cutting back it activities, the Group also engaged in crediting new business. In 2006, Metsä Fibre’s Svir Timber sawmill started operations in Russia and Metsä Tissue acquired the Slovakian Tento a.s., the leading tissue paper manufacturer in Central Eastern Europe. In 2008, Metsä Wood acquired the European iLevel business of Weyerhaeuser, producing engineered wood products, and launched a new plywood upgrading mill in Suolahti. Metsä Tissue started tissue paper upgrading production in Russia.
2007 saw the completion of one major project, Metsä Fibre’s pulp mill in Uruguay. With an annual production capacity of one million tonnes, the mill is one of the world’s largest pulp mills, and at the time of its completion, it was also one of the most modern. UPM-Kymmene, which owned 47 per cent of Metsä Fibre, was also involved in the project.
In 2009, a new ownership structure was agreed for Metsä Fibre, in which Metsäliitto Cooperative owns 53 per cent of the company, Metsä Board 30 per cent and UPM 17 per cent. In this connection, the Uruguay mill was sold in its entirety to UPM and Metsä Fibre became Metsäliitto Cooperative’s subsidiary. In the same year, the Kaskinen pulp mill and the Teuva sawmill were closed down. Metsäliitto Cooperative also sold its entire shareholding (49.9 per cent) in Vapo Oy.
Growth around a compact core
In 2010, the Group’s determined structural change work has reached its final stages. The result is a focused group, whose core business areas currently comprise wood products, pulp, tissue papers and consumer packaging boards. Strong growth is sought for these business operations, while the strategic review continues with regard to the paper business.
The Group is also strengthening its own wood energy operations, with a separate business line launched as part Metsä Forest at the beginning of 2010.
In February 2012, Metsäliitto Group changed its name and corporate image to Metsä Group. The names of the Metsä Group’s business areas changed as well. The new names and the new corporate image represent the final stage in a profound reorganisation based on the Group’s strategy. The purpose of the process has been to create a unified and competitive forest industry group.
The name Metsä clearly integrates all business areas into a unified Metsä Group. The Group will focus on five business areas: wood products, pulp, board, tissue and cooking papers, and wood supply and forest services. Metsäliitto Cooperative’s Wood Products Industry, also known as Finnforest internationally became Metsä Wood, and Metsä-Botnia became Metsä Fibre. On 28 March 2012, the Annual General Meeting of M-real Corporation will make a decision on a proposition to change the company’s business name into Metsä Board. The name of Metsä Tissue will remain unchanged. Metsä Group’s wood supply operations are known as Metsäliitto Puunhankinta in Finland and as Metsä Forest in other countries.
The new corporate identity did not affect the structure of the Group or the legal status of its companies. The name of Metsä Group’s parent company, Metsäliitto Cooperative, did not change. Moreover, the parent company continued to be a cooperative