It might be an understatement to say that the year has been turbulent in businesses all over. The year started with uncertainty after the lingering coronavirus pandemic only to turn into unexpected turbulence as Russia’s unjustified war on Ukraine lead to several rapid changes in the already volatile markets.
As for all energy and raw material intensive businesses, also for the tissue business, the operating environment is highly volatile and faces challenges in supply chains, especially in terms of energy prices and availability, as well as in raw material availability and quality. Costs and inflation are high and the situation is expected to worsen during the winter time. The high inflation will also not help consumers’ trust in the economic development.
But despite the uncertainty and turbulent market conditions, we at Metsä Tissue are looking to the future with confidence. We produce tissue products from sustainable, renewable raw material for the everyday needs of tens of millions of people. We are proud to stand out on the market with our unique sustainable value chain from sustainably managed forests to the responsible production and distribution of renewable products. We operate close to our main raw material and markets, minimising the need for excessive transports.
During the past year we have invested in a more sustainable future. We renewed our tissue paper machine in our Mänttä mill in Finland, resulting in 15 % increased production capacity as well as improved product quality, and especially improvements in energy and production efficiency. The paper machine’s renewal will provide consumers with increasingly soft and strong paper while significantly reducing the amount of energy used to produce it.
In November this year we took an important step forward in our drive towards world class environmental performance in tissue production as we were granted an environmental permit to modernize and expand our tissue paper mill in Mariestad, Sweden. The planned investment would enhance our position as the forerunner in investing into the tissue industry in Sweden and Scandinavia, and help to safeguard the security of supply in essential hygiene tissue products in the region. The next step in this process is the preparation of the final investment decision, the readiness for which is during the first half of 2023.
We have also announced our plans on another significant tissue market development by starting investigations into possible locations for a new mill in the United Kingdom. Similar to the planned Mariestad mill extension, the production of the planned UK mill would be based on using sustainable fresh fibres to make high quality tissues locally to the UK and Ireland markets.
The energy crisis is currently dominating the economic outlook for Europe and maintaining uncertainty, making it difficult to predict the market developments. It is likely that the global economic growth will decline and inflationary pressures will remain. To mitigate the uncertainty, it is very important to keep on optimizing offerings and to increase efficiency. In the tissue business the market changes are also driving strongly towards fresh fibre based portfolios as fresh fibre production enables lower energy and water usage in paper making and mitigates the challenges in the availability and quality of recycled raw material supply. We believe that the latest developments will only enhance the move towards sustainable fresh fibres as the future raw material for tissues.
Today, more than ever, common will and joint efforts to overcome any new challenges are needed. We are committing ourselves every day to being the preferred partner in developing sustainable business - together with our customers, in all our markets. I would like to take this opportunity to thank you, our valued customers and partners, for your collaboration and partnership during this year and bringing our joint agenda forward despite the surrounding conditions.
Best regards to the holiday season and thank you for this year
Esa Kaikkonen
CEO of Metsä Tissue